Most couples that are splitting up really should think about divorce financial planning. It is a unique specialty that many of the other people involved will not be an expert in.
Divorce financial planning can help you think ahead
Lawyers are going to be focused on quickly resolving your dispute, and they may hire accountants that will help you locate and count up all the assets in your marriage. A divorce financial planner can do far more than that. A financial advisor can help you look into the future to make sure your split is fair.
For example, many mothers tend to ask to keep the house while many husbands move out and take the couple’s liquid assets, like cash and stocks. That might seem fair, but history shows that stocks are more likely to appreciate in value far more than a house of equal value. Plus, the house is going to need regular maintenance and is taxed every year.
Stay-at-home parents might need financial advice the most. They may not have cared for their personal finances before, and they may make simple mistakes. On the other hand, many high earners rely on their spouse to take care of the finances. Those high earners could need financial advice to get through a divorce. A financial planner could think about these types of considerations. For example, it might be better for some people to get ongoing spousal support than to get a large lump-sum payment. Or an advisor can help turn a lump sum into a steady stream of income.
Try to take stock before the divorce
As soon as possible after you decide to divorce, you should start compiling a record of your assets. This means locating tax returns, bank statements, and mortgage balances. You do not want to go through a divorce without this information, and if necessary your lawyer can usually force your spouse to share the information with you.
Do not do anything rash
A divorce is a big change. You may be tempted to spend a lot of money to get a fresh start in life. A new condo, a new car, or a relaxing vacation might be tempting. That is almost always a mistake, though. Spending money that way during a divorce can be seen as fraudulently taking money that should be split with your spouse. You should also avoid moving or changing jobs if you can. Your divorce settlement could be based on your most recent job earnings, and if you quit a successful business career to write novels you could be required to make payments to your spouse as though you were still earning a lot of money.
Financial planners can help you after divorce
After a divorce, you will rarely stay in touch with your lawyer. Your divorce financial planner could remain an important part of your life, though. Depending on what type of work they typically do, they could easily become your regular financial advisor and could help you recover financially from the divorce.