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divorce financial planning

The Value of Financial Planning During Divorce

Divorce.

It’s a word that can strike fear, uncertainty, and a whirlwind of emotions. And amidst the turmoil, it’s easy to overlook one of the most critical aspects: your financial future.

At Purposeful Wealth Advisors, we understand the complexities that come with untangling your financial life during a divorce. It’s not just about splitting assets; it’s about navigating a labyrinth of joint accounts, investments, businesses, and more.

But here’s the thing…you don’t have to go through this alone. Engaging with a Certified Divorce Financial Analyst® early in the divorce process can make all the difference.

They can provide the guidance, support, and expertise you need to make informed decisions and protect your financial well-being. How? Let’s have a look.

Understanding Financial Entanglements

The first step in financial planning during divorce is understanding your financial entanglements. This means identifying all your joint assets and liabilities, from bank accounts and investments to real estate and business interests.

But it’s not just about making a list. It’s about understanding the value of these assets and how they can be divided. This is where a Certified Divorce Financial Analyst® can be invaluable. They can help you navigate the complexities of valuing and dividing assets, helping you receive a fair and equitable share.

Budgeting and Cash Flow Management

Divorce can bring significant changes to your income and expenses. You may be going from a dual-income household to a single-income one, or you may be facing new expenses like alimony or child support.

This is where budgeting and cash flow management come in. Your financial advisor can help you assess your post-divorce income and expenses, developing a budget that works for your new reality.

Asset Division Strategies

Asset division is one of the most complex and contentious aspects of divorce. There are legal considerations, like the difference between community property and equitable distribution states. There are tax implications, like the impact of dividing retirement accounts or selling a home. And there are emotional considerations, like the sentimental value of certain assets. So, as you can see – a lot is going on here.

Your Certified Divorce Financial Analyst® can help you navigate all these factors. They can help you develop an asset division strategy that is fair, tax-efficient, and aligned with your goals. You’ll also be able to understand your options for dividing retirement accounts, pensions, and other complex assets. And they can provide objective guidance when emotions are running high.

Alimony and Child Support Considerations

If your divorce involves alimony or child support, there are important financial considerations to keep in mind. These payments can have a significant impact on your cash flow and tax situation, and they can also be subject to change over time.

Your Certified Divorce Financial Analyst® can help you understand the financial impact of alimony and child support, both in the short-term and the long-term. They can help you plan for contingencies, like changes in income or the need for modifications. And they can ensure that your alimony and child support obligations are factored into your overall financial plan.

Insurance and Health Care Planning

Divorce can also bring changes to your insurance and healthcare needs. You may need to update your life, disability, and health insurance policies, and you may need to find
new coverage if you were previously on your spouse’s plan.

Your Certified Divorce Financial Analyst® can help you review and update your insurance policies, ensuring that you and your children are properly protected.

Estate Planning Revisions

Divorce is also a time to review and update your estate plan. This includes you:
Will
Trusts
Power of attorneys

And beneficiary designations on retirement accounts and life insurance policies

Your Certified Divorce Financial Analyst® can ensure that your plan reflects your new circumstances and protects your assets for your children and future heirs.

Credit and Debt Management

Separating your credit and debts is another important aspect of financial planning during divorce. You’ll probably need to:
Close joint accounts
Establish individual credit
And develop a plan for managing and paying off any marital debt

Your Certified Divorce Financial Analyst® can guide you through this process, helping you protect your credit score and develop a debt repayment strategy that works for your new financial situation.

Emotional and Psychological Considerations

Finally, it’s important to acknowledge the emotional and psychological toll of divorce. Financial decisions can be heavily influenced by emotions, and it’s easy to lose objectivity during this stressful time.

Your Certified Divorce Financial Analyst® can provide a stable, objective presence, helping you stay focused on your long-term goals and make decisions based on facts, not feelings. They understand the emotional challenges of divorce and can provide the support and guidance you need.

Want To Talk to Us?

While the immediate financial concerns of divorce can be overwhelming, it’s important not to lose sight of your long-term financial goals.

Your Certified Divorce Financial Analyst® can help you revise your retirement plans, investment strategies, and other goals to reflect your new circumstances.

At Purposeful Wealth Advisors, we’re here to be your partner, your advocate, and your guide through the financial aspects of divorce. We understand that this is a challenging and overwhelming time, and we’re committed to providing the expertise, support, and guidance you need every step of the way. With the right financial planning, you can emerge from divorce financially empowered and ready to embrace your new beginning. Let us help you plan for a purposeful financial future – one that’s all yours with the help of your 30-minute complimentary call.

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Raymond James and its advisors do not offer legal advice. You should discuss any legal matters with the appropriate professional. Opinions expressed in the attached article are those of the author/speaker and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice.