What is divorce financial planning?
Divorce financial planning involves assessing and planning for the current and future financial implications of divorce. It encompasses asset division, tax considerations, and post-divorce financial stability.
How can a financial analyst and planner assist in the divorce process?
A financial analyst can offer impartial advice on dividing assets, forecast the financial impact of various settlement options, assist in budgeting for post-divorce life, and ensure you're making informed financial decisions.
What is a Certified Divorce Financial Analyst (CDFA), and how can they help?
A CDFA is a professional skilled in the financial aspects of divorce. They play a crucial role in understanding the long-term effects of proposed divorce settlements, tax implications, and asset division.
Can a financial planner act as a mediator in my divorce?
Yes, financial planner, especially those with mediation certifications, can act as financial neutrals in mediations, helping both parties reach equitable solutions. Strada pairs with Board Certified Family Law attorneys all the time for mediation support.
What should I consider financially before filing for divorce?
Consider your current financial assets/liabilities, understand your post-divorce budget needs, assess your future earning potential, and contemplate the tax implications of asset division.
What are the financial implications of keeping the family home in a divorce?
Retaining the family home can impact liquidity, future income needs, maintenance costs, and property taxes. It's crucial to assess whether keeping the home is financially feasible long-term as well as understanding the true costs of the homeownership from a cash flow perspective.
How are retirement accounts divided in a divorce?
Retirement accounts are often considered marital property and may be divided using a Qualified Domestic Relations Order (QDRO). The division depends on the account type and state laws. These are separate legal documents that are drafted in conjunction with your other divorce documents.
What's the difference between marital and separate property?
Marital property is assets acquired during the marriage, while separate property is assets owned before marriage or received as a gift/inheritance. The distinction affects how assets are divided in a divorce. Strada does characterization work to help you understand the difference between the two.
Can a financial planner help with child support and alimony calculations?
Yes, a financial planner can provide a detailed analysis of financial needs and affordability, helping to inform negotiations on child support and alimony.
What tax considerations should I be aware of in a divorce?
Considerations include the tax implications of the splitting of joint assets, tax filing status, and potential capital gains taxes on the sale of marital property.
How do I financially prepare for life after divorce?
Develop a new budget, adjust your retirement planning, review your estate plan, and update beneficiaries on insurance policies and retirement accounts.
Should I update my estate plan during or after my divorce?
Yes, it’s important to review your estate plan both during and update it after the divorce process to ensure it reflects your current wishes and new legal status.
How can I ensure financial fairness in a collaborative divorce?
Working with a financial neutral and ensuring full financial disclosure from both parties can help achieve a fair and equitable outcome. It will reduce costs and create a transparent platform from which you both can make informed financial decisions.
What happens to joint debts in a divorce?
Joint debts must be addressed in the divorce settlement. It’s common for debts to be divided in a manner similar to assets, but remember that creditors may still hold both parties responsible for joint debts.
Why might I need a post-divorce financial plan?
A post-divorce financial plan helps you adjust to your new financial reality, ensuring you have a strategy in place to meet your goals and maintain financial stability.
How does divorce affect my insurance needs?
You may need to update policies, reconsider beneficiaries, and potentially secure new coverage to account for your changed circumstances and obligations.
What financial records do I need to gather for my divorce?
Collect records of all assets, debts, tax returns, income sources, insurance policies, estate plans, and any other relevant financial documentation.
How can a financial planner help with a prenuptial or postnuptial agreement?
A financial planner can provide clarity on your financial situation, helping to inform the creation of a comprehensive agreement that protects both parties' interests.
Is divorce planning only for those with high net worth?
No, divorce planning is beneficial for anyone undergoing a divorce, regardless of net worth, to ensure financial fairness and stability post-divorce. We believe everyone can benefit from sound financial planning during divorce.