They say numbers do not lie and when it comes to the structural integrity of marriages in general, the numbers are not promising at all. Almost 50% of all marriages in the U.S today end in divorce or separation. That is almost one in every two marriages!
While the fact that two people who were once so in love that they decided to tie the knot now can’t stand each other so much so that they decide to get a divorce is sad, the even sadder fact is just how negatively it can impact your financials.
Yes, we have things like prenups which help people protect their individual wealth should the marriage end but to be honest, not very many people go into a marriage preparing for it to end. For that reason, prenups used to be very much a preserve of the super-rich. That is no longer the case.
There has been a marked increase in the uptake of prenuptial agreements even by those who do not count among the top 1%. The reason for that is fairly obvious; the institution of marriage isn’t as binding as it used to be. Sadly!
Protecting Your Finances During a Divorce
The divorce process is often lengthy, grueling, cruel and very challenging. So much so that most people often end up signing a horrible deal so that they do not have to deal with their exes anymore. No more mediation talks, nasty texts or lawyers snarling at you. At some point, you will want it all to be over.
It is at that point when you begin to lose a lot. From money to property and even visitation rights if you have kids.
The problem with wanting to give in and settle the divorce as quickly as possible is that you may not feel the impact of your decisions immediately. While getting it all done and dusted will give you instant relief; you can now go out and move on with your life, the financial implications will hit you months, even years down the line. That is why you need someone outside of the situation to help you make the right choices even when the world seems dark and lonely.
Getting a divorce financial planner is often an excellent idea. This is someone who has your best financial interest at heart and can help you make those tough choices when you are really not feeling up to it.
Here are 5 ways a divorce financial planner will make your life much easier.
How a Divorce Financial Planner Can Help You
A divorce financial planner typically referred to as a CDFA (Certified Divorce Financial Analyst) is a professional who helps you and your divorce lawyer understand the financial implications of any decisions you make during the divorce process. They also help you collect all the necessary financial information and identify those that are important.
Most importantly, however, they help shed light on any choices you make during your divorce from a financial aspect of things. Here are some reasons why a Los Angeles financial planning expert is perhaps the most vital professional to have on your team:
1. A CDFA can help you save time by conducting a thorough financial analysis early in the divorce process
As we mentioned earlier on, sometimes you just want it all over and done with as quickly as possible. One of the main reasons divorce takes so long is because both parties are always trying to do their own research and understand the financial aspects of the terms being drawn up.
With a CDFA in your corner, this analysis will be conducted quickly and in a manner that you can understand early on in the process thus shortening the amount of time your divorce would otherwise take.
2. Your divorce financial planner can alleviate fear, ignorance, and anger with accurate data
One of the main reasons people get so angry during their divorce is because they feel as though they are being robbed; robbed of:
- Their home
- Their family
- Their love
- Their property
By hiring a divorce financial planner, you will at least get a chance to see a clearer picture of all the financial implications of your decisions. Your financial planner will educate you using accurate data on just how much you are going to lose or gain during the process. This alleviates your fear, anger, and ignorance. All that will be left will be a concise image of your impending financial future and security.
3. Your CDFA uses scenarios to give you peace of mind
One of the most common concerns among divorcing couples is whether or not they are going to be financially okay. Your divorce financial planner uses different models to forecast your impending financial future to give you a definitive answer as to whether or not you are going to be okay. They will use:
- The expected net worth of both parties
- The expected cash flow
- Investments
- Savings
- Taxations
- Child support
They will even look at how selling the house will impact both parties and give you a clear picture of your future financials. Using these scenarios, they can tell you whether or not you are going to be financially stable and can offer suggestions on what to do to secure that future.
4. Your CDFA will help you develop a detailed budget to help you transition into single living
Marriage is essentially a partnership and as such budgeting takes into account several sources of income. Divorce breaks that partnership and makes both parties sole-proprietors of their own lives. This calls for a whole new budget with different parameters. Your divorce lawyer can help you see all the things you need to cut out of your life and what you need to do to make a smooth transition into single living.
5. Your divorce financial planner will help you avoid long-term financial pitfalls
The financial implications of the decisions you make during your divorce process will not be felt immediately; they will come somewhere down the line. A professional financial planner can forecast the long-term effects of those decisions and advise you accordingly.
Your divorce financial planner can do more than just advise you on your finances. They can be the one person that is in your corner throughout the process. The need for that cannot be overstated during such a dark and lonely time as the divorce period.
