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How you handle your divorce will significantly impact the rest of your life. So, it’s critical that you make thoughtful choices throughout the process. Even though it’s an emotional time, you have to think rationally –especially when it comes to your personal finances. In short, you have to Think Financially, Not Emotionally®.
But, for many women, that’s easier said than done.
Too many women make terrible financial decisions when they are in the throes of a break-up, and then unfortunately, these poor decisions continue to have serious long-term negative effects –for them and their families.
It doesn’t have to be that way, though. No matter where you are in the process, you have to keep your emotions in-check and treat the divorce as a business negotiation –which is exactly what it is. Someone once said that marriage is all about love, and divorce is all about money. They were right, and you must negotiate a divorce settlement agreement that financially protects you now, and well into the future.
What can you do to maintain that kind of focus? Is there a secret to surviving divorce with your finances intact?
Based on my experience, I strongly believe there is one factor that typically makes the difference between a successful divorce settlement and one that is considerably less favorable.
The secret is this:
Build a winning divorce team.
Years ago, divorce was a simpler process that typically involved only the divorcing couple and their lawyers. But, times have changed. These days, you’ll also need the support of other professionals, particularly those who can help ensure your financial protection both now and in the future.
So, when you’re facing a divorce, please take my advice: Get all the help you can. Yes, it will cost you more in professional fees, but it will be more than worth it to protect your long-term financial well-being. Take the time to plot a course strategically, and build a solid divorce team that includes these three essential players:
1. A Matrimonial/Family Law Attorney – I suggest you interview at least three candidates for this critical position. Look for attorneys who exclusively handle divorce cases or devote at least 75% of their practice to divorce. (Ideally, your lawyer will be a Fellow of the American Academy of Matrimonial Lawyers, which requires their members to have at least a 75% specialization in matrimonial law, be admitted to the Bar for at least 10 years, pass both oral and written exams, pursue continuing education and fulfill other stringent requirements. There are both state and national legal organizations that offer Board Certifications in Matrimonial/Family Law, but I do not believe that their requirements are as rigorous as the American Academy of Matrimonial Lawyers.) During the interview, talk openly about the individual complexities of your case –and be sure to talk openly about each lawyer’s qualifications and fees, too. Ask each candidate how many cases he/she has recently handled, how many have been settled and how many have gone to trial. What were the outcomes of these cases? Find out if he/she typically represents the husband or wife. What percentage of each? Will he/she personally handle all aspects of your case, or will your case be passed to a more junior attorney and/or paralegal (and at whose rate will you be charged)? Ultimately, you should hire a qualified divorce lawyer who has sufficient experience in cases like yours (e.g. custody, high-net-worth, etc.). And, here’s one more important piece of advice: Remember to make certain you feel personally at-ease with whomever you choose. By its very nature, divorce is a delicate and emotional experience. You need your attorney to be a trusted, supportive and forward-thinking resource before, during, and even after, the divorce is complete.
2. A Divorce Financial Planner – As the financial expert on your divorce team, the divorce financial planner should work hand-in-hand with your divorce attorney. A divorce financial planner’s job is to take care of the critical financial tasks that are beyond the scope of the divorce attorney’s expertise, and that task can range from preparing the financial affidavits to projecting the financial and tax implications of each divorce settlement option. At a minimum, your divorce financial planner should have the Certified Divorce Financial Analyst (CDFA) designation. Do not use a regular financial advisor, financial planner, CPA or accountant. Instead, you need someone who has a complete understanding of, and specialized training in, divorce. Ideally, your divorce financial planner also will have additional advanced training in divorce financial planning strategies and asset protection. My company’s CDFAs with advanced training are called Divorce Financial Strategists™. Think of the divorce financial planner like the quarterback of your financial team, the person who is responsible for creating the comprehensive financial analyses and the projections that you and your divorce attorney will need to fully understand the short- and long-term financial and tax implications of each proposed divorce settlement offer. Then, your attorney will use those analyses and projections to substantiate and justify his/her positions when negotiating with your husband’s attorney. If needed, your divorce financial planner should also have the necessary contacts to bring in additional specialists, including:
- A forensic accountant. Are you concerned about hidden income/assets/liabilities and/or the possible dissipation of marital assets (vacations taken by your husband with his girlfriend and gifts he might have bought her)? A forensic accountant helps explore these concerns and may also be very useful when one or both spouses own a business or professional practice where, unfortunately, it is rather easy to hide income/assets and/or delay revenues and increase expenses (pad the payroll, fictitious charges, etc.).
- A valuation expert. Once you have “real” numbers from the forensic accountant, a valuation expert can determine the worth of a business or professional practice. A valuation expert can also establish the value of an advanced degree or training, stock options and/or restricted stock, etc.
- A real estate appraiser. The marital home and other real estate are often among the largest assets that need to be divided. A real estate appraiser determines the value of the marital home and can also appraise vacation home(s), commercial real estate, land, etc.
3. A therapist/counselor. Many people describe divorce as an emotional rollercoaster. Your divorce team should also include a qualified therapist who can help you cope with your feelings as you navigate the ups and downs along the way.
There’s no benefit to sugar-coating it, so here’s the truth: Divorce isn’t easy, but you don’t –and shouldn’t –have to go it alone. Build a top-notch divorce team and you’ll have the professional expertise and support you need to keep your finances intact and secure your financial future.
Jeffrey A. Landers, CDFA™ is a Divorce Financial Strategist™ and the founder of Bedrock Divorce Advisors, LLC (http://www.BedrockDivorce.com), a divorce financial strategy firm that exclusively works with women, who are going through, or might be going through, a financially complicated divorce. He also advises women business owners on what steps they can take now to “divorce-proof” their business in the event of a future divorce. He can be reached at Landers@BedrockDivorce.com.
All articles/blog posts are for informational purposes only, and do not constitute legal advice. If you require legal advice, retain a lawyer licensed in your jurisdiction. The opinions expressed are solely those of the author, who is not an attorney.
Follow Jeffrey A. Landers on Twitter: www.twitter.com/Bedrock_Divorce