Divorce sucks. There may be light at the end of the tunnel, but it’s not an easy journey. While you are on that path, it’s important to journey towards financial empowerment both during and after divorce too. As a Certified Divorce Financial Analyst I can tell you from experience that seeking professional financial guidance is valuable.

This blog will talk about the Financial landscape of divorce, crafting your financial strategy, and the importance of collaborating with experienced professionals.

Financial Landscape of Divorce

If you only take away one thing from this blog, knowledge is power when it comes to divorce. Understanding the Financial Landscape of divorce is really important. Whether it be the financial challenges during divorce, how assets can be split, or goals- it is worth your time and mental energy to be in the know.

Important question: What are your financial goals and priorities?

It’s a really good idea to know the answer to that question. You will want to consider factors like what your cash flow currently looks like, and what your needs are once the divorce is final. There are many reasons why this is useful and important information, but the easiest explanation: This will help you get set up for a fresh start and mitigate the chance for over spending, and to protect your credit.

Financial challenges that I see often (outside of the reality of going from one household to two) would be an impact on cash flow- you are going through a turbulent time emotionally and that will affect other areas of life too. Business owners and people with variable income often report that cash flow is affected. Planning ahead is optimal, but the most important thing is to consider your mental health and think about what you can do to prioritize your mental focus.

Asset division, spousal maintenance (alimony), child support, and taxes would be another important area to spend time understanding. If you have any questions about marital assets vs individual assets check out my blog post here (you can also check out the one on asset division here).

When you are considering the division of business assets, it is important get a current and accurate valuation because you don’t want to base asset division on value that doesn’t actually exist.

With regard to spousal maintenance, that is based on state and county guidelines, but fact patterns and extenuating circumstances are also taken into consideration at times. The best thing to be aware of is that pretty much everything in divorce is negotiable. If you have questions, consider consulting an attorney on your specific situation.

Financial Strategy

When thinking about a financial strategy, you want to explore strategies to protect assets during divorce proceedings. To be frank if you don’t already have a pre or post nuptial agreement there are not a lot of things you can do for things that are considered marital assets. That being said you do have the option to still do a Domestic Asset Protection trust, which is often used to put assets into a trust to be used for the benefit of children. The assets aren’t considered marital property at this point.

Be aware you do not have the option of going back to cancel and reclaim the assets. You need to make sure that you will not need any of the assets later on. If you think this might be a good option for you, start by talking to an estate planning attorney.

Collaboration

You want to collaborate with experienced professionals. The value of working with a financial advisor that is specialized in divorce is experience around crafting solutions that seek results to optimal outcomes. Really, that is also the value of working with family law attorneys, Certified Divorce Real Estate Experts (CDREs), Certified Divorce Lending Professionals (CDLPs) would be that these people have specialized knowledge and have experience with several divorces and can share strategies to help maximize possible outcomes and avoid pitfalls.

Often, people are looking for a Certified Divorce Financial Analyst (CDFA) to navigate tax efficient distribution strategies, discuss asset division options and the long term outcomes, as well as providing transparency as to what different settlement options translate to immediately vs over a longer time period (like through retirement or life expectancy). Often legal Counsel, and other professionals can contribute to a comprehensive financial strategy- this is a collaborative effort many times.

When you have put together your team, the most important tip I can give is: Be honest and open with your team. Be transparent about assets, debts, and plans. For example if you are planning on moving, having a career change or getting remarried- that is relevant information that your team can make sure settlement offers include so you don’t go back to court or have surprises later on.

Life post-divorce is worth looking forward to and planning for. Embrace your financial independence. Especially as you are in a position to look to the future, think about how you want that to look and work with a financial planner to make that a reality. Do yourself a favor and keep up financial education and stay empowered. Knowledge is power.

Increase your knowledge on basic financial literacy and empower yourself to make decisions and choices that are right for you.

Big breath - we talked about A LOT.

The big picture: Knowledge is power. Understand your financial picture: cash flow, what asset division might look like, what your needs are (spousal maintenance or child support). Consider your options from a financial strategy perspective, and hire experienced professionals that can help you - divorce is too hard to go it alone.

Brianna Beski is a financial advisor and CDFA at Raymond James, based in Colorado. She and her team focuses on helping people have confidence in their financial futures. For the rest of the story, please visit her website or email her at brianna.beski@raymondjames.com.

While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJA, we do not render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Brianna Beski of Raymond James Branch 3BA and not necessarily those of Raymond James or Raymond James Financial Services.

Raymond James & Associates, Inc., member New York Stock Exchange/SIPC