By Dan Reiter, CFP®, CPA, CDFA

How to Prepare for a Divorce: Hiring the Right Team

When high-net-worth couples decide to divorce, the first thing they think is, “I need a good attorney.” In our work with divorcees, we have found that many people don’t realize that other key advisors are essential in making sure their divorce protects what’s most important to them.  

A hand-picked divorce team can make the process easier and less stressful at a time when you need it most. Here is a summary of the key roles and the value each advisor can bring to the table.

Divorce Financial Planner

A divorce financial planner can help you assess your financial situation and develop a plan for your future. Divorce financial planners can help you with:

  • Gathering all necessary information for your divorce, including your expected future income and expenses, and organize the details about your assets and debts.
  • Clarifying the financial implications of various settlement options and can share how they may impact your future financial security.
  • Analyzing the tax implications of your divorce, both today and years into the future.
  • Creating an investment strategy to both protect and grow your retirement assets.
  • Planing for your future post-divorce, including how to best achieve your retirement and education goals.

If you want the help of a divorce financial planner, hire one who is well versed in the divorce process and has the necessary experience and education, such as a Certified Divorce Financial Analyst. According to the Institute for Divorce Financial Analysts, “A CDFA is someone who comes from a financial planning, accounting or legal background and goes through an intensive training program to become skilled in analyzing and providing expertise related to the financial issues of divorce”.

In addition to the Certified Divorce Financial Analyst credential, here are some other important characteristics to consider:

  • Educational and Empathetic Approach: During a time of emotional and financial upheaval, having an advisor who takes the time to educate you is invaluable. Seek an advisor who can explain complex financial concepts in a clear and understandable way. Additionally, look for someone who demonstrates empathy and understanding of the emotional complexities that often accompany divorce.
  • Certified Financial Planner™ (CFP®): A CFP® designation signifies a rigorous professional qualification. CFP® professionals undergo extensive training and have years of experience in financial planning. This designation assures a strong foundation of knowledge and expertise to guide you through your financial journey.
  • Fiduciary: When choosing an advisor, prioritize those who are legally obligated to act in your best interests. A fiduciary advisor is required to put your financial needs before their own, ensuring you receive unbiased and ethical guidance.
  • Fee Only: Opt for an advisor who has a compensation relationship with you, not a product company. This structure avoids any conflicts of interest associated with commission-based advisors who may be incentivized to sell you products that aren't necessarily aligned with your goals.

Schedule your free 30 minute discovery call with one of our

Certified Divorce Financial Analyst™ (CDFA®) today. 

 

Divorce and Family Law Attorney

A family law attorney is your primary legal advocate. They will guide you through the legal aspects of your divorce, including:

  • Understanding Your Rights: They will explain your rights and obligations under family law in your state.

  • Negotiation and Mediation: They can negotiate with your spouse's attorney or mediate to reach a mutually agreeable settlement.

  • Litigation: If necessary, they can represent you in court.

  • Child Custody and Support: They can help you determine child custody arrangements and child support payments.

  • Property Division: They will assist in dividing your marital assets and debts fairly.

  • Spousal Support: They can help you understand and negotiate spousal support.

For how to find a divorce attorney, consider starting with recommendations from family or friends. You may also search online for divorce lawyers in your area or search local bar associations for attorneys that specialize in family law. One example would be the Kansas City Metropolitan Bar Association’s KC Lawyer Finder.

When selecting the right attorney, you should consider factors such as experience in divorce, reputation, reviews, fees, and how comfortable you feel about their ability to understand your situation and unique values.

Tax Professional

A tax professional, such as a Certified Public Accountant (CPA) or Enrolled Agent (EA) can help you with:

  • Advising you on the tax consequences of dividing property.
  • Helping you understand how child support and alimony payments affect your taxes.
  • Identifying tax deductions and credits you may be eligible for.
  • Filing your taxes while ensuring you comply with all tax laws and regulations.

Tax professionals and divorce financial planners, while similar, play different roles on a divorce team. Accountants and tax professionals often focus more heavily on the tax implications of today, whereas a divorce financial planner will often take a more long-term view of tax implications.

Finding a good tax professional is a lot like finding a good attorney. Start with recommendations from family or friends, or with an online search for Certified Public Accountants (CPAs) or Enrolled Agents (EAs) in your area. You may also use a specific online search tool such as the IRS Directory of Federal Tax Return Preparers to sort professionals by credentials and proximity to you.

Divorce Mortgage Professional

A mortgage professional can help you refinance your home or obtain a new mortgage if necessary. They can:

  • Evaluate your income and credit score to help you properly assess your financial situation and credit worthiness.
  • Help you select a mortgage that meets your needs and budget.
  • Guide you through the mortgage process and assist you with the paperwork and closing process.

Many individuals navigating divorce face significant changes in income and assets. As such, handling loans can be tricky. It often pays to work with a mortgage professional with specific knowledge and experience in working divorce cases, such as lending professionals wtih the Certified Divorce Lending Professional (CDLP®) certification. To find a CDLP® in your area, you can use their online search tool.

Mental Health Professional

A mental health professional can provide emotional support and coping strategies during your divorce. They can:

  • Help you cope with stress and anxiety by teaching you relaxation techniques and other coping mechanisms.
  • Address grief and loss to help you process your emotions and move forward.
  • Teach you effective communication strategies to navigate difficult conversations.

According to the American Psychological Association, there are three key questions to consider when selecting a good professional:

  • Are they licensed?
  • Will your health insurance cover the therapy from this provider?
  • Are there limits to the number of sessions covered under your insurance?

Selecting the right mental health professional is a personal process. Referrals are often the preferred method of finding one. If needed, you can use resources such as the National Register of Health Service Psychologist’s find a psychologist or the Find A Therapist online search tool.

Specialty Appraisers

If you have valuable assets that are hard to value, such as art, antiques, collectibles, closely held business, or private investments you may need to hire a specialty appraiser to determine their fair market value. An appraiser can:

  • Provide an accurate valuation of your hard-to-value assets.
  • Prepare documentation to support the valuation.

Finding the right professional depends highly on the asset being valued.

For artwork, consider contacting your local art museum for referrals to professionals they have worked with. For example, the Nelson-Atkins Art Museum in Kansas City has a list of appraisal referrals on their website.

For small businesses or private investments, you will want to find a certified valuation professional with specific divorce experience in your state. One online directory is the National Association of Certified Valuators and Analysts®.

Where Do You Start when building the right team?

Given the complex landscape of divorce, it can be overwhelming to begin building a team. Start with a good divorce attorney or divorce financial planning professional. They serve as the “hub” of your team and can also provide valuable insight into finding the right professionals in other professional areas.

By assembling a skilled team of professionals, you can increase your chances of a successful and less stressful divorce. Remember to choose professionals who are experienced, knowledgeable, and compassionate.

An Important Note:

Are you overwhelmed yet? It is normal to be uncertain where to start. It is worth emphasizing the fact that a good family law attorney or divorce financial planner is one that has a lot of experience in working with a broad network of divorce professionals. Because of this, such professionals may serve as some of the best referral resources to not only when you may need another professional, but who would be a good fit for your needs.

 

Investment advice, financial planning, and retirement plan services are provided by Prosperity Planning, Inc., an SEC registered investment advisor. The information contained herein, including but not limited to research, market valuations, calculations, estimates and other material obtained from these sources are believed to be reliable. However, Prosperity Planning, Inc. does not warrant its accuracy or completeness. The information contained herein has been prepared solely for informational purposes and is not an offer to buy or sell or a solicitation of an offer to buy or sell any security or to participate in any trading strategy. If an offer of securities is made, it will be under a definitive investment management agreement prepared on behalf of Prosperity which contains material information not contained herein and which supersedes this information in its entirety. Any investment involves significant risk, including a complete loss of capital and conflicts of interest. The applicable definitive investment management agreement and Form ADV Part 2A will contain a more thorough discussion of risk and conflict, which should be carefully reviewed before making any investment decision.

 

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Schedule a call with one of our Certified Financial Planner™ (CFP®) professionals today!

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