If you are going through a divorce, there are a million emotional, unsettling challenges that you will be required to deal with.
If the divorce is acrimonious, you can probably multiply that number by 1,000, and even if the divorce is relatively benign, making sense of your new circumstances will be incredibly difficult. One question you will likely ask yourself is, can I navigate this process by myself? For legal questions, about custody, alimony or how your state determines the distribution of marital property, you would likely retain the services of an attorney. And while a divorce attorney is an expert in the law, and may have intimate knowledge of your financial situation, he or she will not be able to provide expert counsel on the financial implications of the divorce. In fact, due to the many financial complexities of divorce, more and more divorce attorneys are hiring their own specialized advisors right from the start. If you have questions about how a divorce will impact your cash flow now and during retirement, and how it will impact the estate you leave to your heirs, you would be well served by working with a financial advisor who is a Certified Divorce Financial Analyst (CDFA).
A CDFA financial advisor specializes in understanding the complex interactions that splitting your assets can have on your financial situation now, and in the future. To start, a CDFA advisor can help you understand the true value of the marital property in question, before you make any legally binding agreements. Consider, for example, marital property which contains a $500,000 house and a $500,000 investment portfolio. The lawyers on both sides may agree that the party who will serve as the primary caregiver for the children should keep the house, and the other party should receive the portfolio. On the surface, this may appear to be equitable; however, this evaluation does not take into account the fact that the portfolio is likely to create additional revenue each year, while the house will require the homeowner to make mortgage payments, pay property taxes and homeowners insurance, and will require upkeep as well. A CDFA advisor will also be able to analyze previously filed tax returns, 1099s and W2s to identify potentially hidden assets, and ensure that all of the qualifying marital property is being assessed. In addition, a CDFA financial advisor will be able to conduct marital property assessments and cash flow projections, without requiring you to take on the additional billable hours of having your attorney research and then hire a financial analyst to provide testimony on your behalf.
At Waldron, the philosophy has always been to build our team of advisors with experts in a wide range of financial disciplines, so that we can assist our clients with any of the challenges and complex circumstances they may face. The wealth counselors, investment analysts and wealth planners at Waldron work as a collaborative unit, so that when any client requires the counsel of an expert to help them navigate the complexities of their unique situation, the appropriate team member can be called in to address their concerns, and integrate a solution into their long term goals.