- Financial analysis conducted early in the divorce process can save time.
The average length of a U.S. divorce process is one year. In the beginning stages of the process, both parties spend a great deal of time trying to get a clear understanding of the financial aspects and terminology of the separation. A Certified Divorce Financial Analyst (CDFA) professional can explain all financial aspects of the pending decisions and help to empower their client to make educated decisions throughout the proceedings.
2. A CDFA can help their client save money during the divorce process.
By using a CDFA professional, you will have a clearer picture of your financial future. Only then can you approach a legal settlement that fully addresses your financial needs and capabilities. A legal settlement that floats back and forth between attorneys, without the client having a clear understanding of all financial ramifications, can be detrimental, time consuming and expensive. CDFA professionals can educate their clients by providing a thorough knowledge and understanding of the often-complicated financial decisions.
3. A CDFA can help their clients to avoid long-term financial pitfalls related to divorce agreements.
Working with a client and their attorney, a CDFA professional can forecast the long-term effects of the divorce settlement. This includes details of all tax liabilities and benefits. Developing a long-term forecast for their financial situation is far better than a short-term snapshot. Financial decisions must be made that not only take care of immediate family needs, but retirement as well.
4. CDFA professionals can assist their clients with developing detailed household budgets to help avoid post-divorce financial struggles.
A CDFA professional can help clients think through what the divorce will really cost in the long run and develop a realistic monthly budget during the financial analysis process. Expenses such as life insurance, health insurance, and cost of living increases must be considered when agreeing on a final financial settlement.
5. Using a CDFA professional can reduce the amount of apprehension and misunderstanding of the divorce process.
Misinformation and misconceptions about the divorce process can be detrimental. Many have false expectations that they will be able to secure a divorce settlement allowing them to maintain their accustomed style of living. Financial divorce analysis helps to ensure a good, stable economic future and prevent long-term regret with financial decisions made during the divorce process.
Please call Philip Lockwood, CDFA at 515-274-8006 today to learn more about our Divorce Financial Planning Services.
Source: The Institute of Divorce Financial Analysts (IDFA) website www.institutedfa.com
Please note, changes in tax laws or regulations may occur at any time and could substantially impact your situation. While we are familiar with the tax provisions of the issues presented herein, as a Financial Advisor, I am not qualified to render advice on tax or legal matters.
