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Divorce Planning

Certified Divorce Financial Analysts™
Can Save Valuable Time and Money During the Divorce Process
 
Here’s a somewhat disheartening and sobering fact: the US Census Bureau estimates that there are currently 50 percent as many divorces as there are marriages. The divorce rate has doubled from that of the early 70s. In the Capital District, the divorce rate is  While the legalities of getting a divorce may have become somewhat easier in the past 30 years, the financial ramifications remain the most intimidating and potentially devastating aspect of ending a significant life partnership.
 
But with proper planning and expert help from professionals specializing in financially equitable divorce settlements, you can increase your chances of arriving at a settlement that fully addresses your long-term financial needs.
 
Developing comprehensive insight of the short-and long-term financial effects of divorce can save valuable time, money and distress, especially if the process is conducted early in the legal proceedings. Many separating couples seek individual legal assistance before assessing their financial situation. While lawyers serve a crucial role as individual legal advocates, they are not necessarily there to explain financial consequences in detail.
Working with a client and their attorney, a Certified Divorce Financial Analyst™ can forecast the long-term effects of the settlement. By using a CDFA, you can have a clearer view of your financial future. Only then can you approach a legal settlement that fully addresses your financial needs and capabilities. CDFAs help attorneys by helping their client make financial sense of proposals. CDFAs also give attorneys the tools they need to help prove their cases.
Misinformation and misconceptions about the divorce process can be detrimental. Many have false expectations that they will be able to secure a divorce settlement allowing them to continue with their accustomed style of living. Financial divorce analysis helps to ensure a good, stable economic future and prevent long-term regret with financial decisions made during the divorce process.
 
It’s important to realize that divorce is the breakup of an economic unit, as well as a family unit. The process should be approached as a dissolution of a financial partnership, with each party attempting to remove the emotions from the process in order to develop a workable plan. There are three common emotions that are prevalent in the beginning stages of a divorce: fear, anger and guilt. It can be a role of the CDFA to recognize these emotions, determine where they are coming from, and help defuse them.

The most beneficial thing about using a Certified Divorce Financial Analyst is help planning for my future, including division of assets, tax ramifications and long-term vision, 

Here are a few key financial elements to be aware of when going through a divorce:
 
1)      Secure copies of your credit report from the three reporting agencies. Note which credit cards and loans are open and joint. There are marital and separate assets. The same holds true for debts. Have a CDFA sort through your various assets and debts to determine what your financial picture looks like.
 
2)      Remember that the decisions you make now will affect the rest of your life. Developing a long-term forecast for your financial situation is far better than a short-term snapshot. Financial decisions must be made that not only take care of immediate family needs, but retirement needs as well.
 
3)      Think through what the divorce will really cost you in the long run and develop a realistic monthly budget during the financial analysis process. Expenses such as life insurance, health insurance and cost of living increases must be taken into consideration when agreeing on a final financial settlement.
 
4)      Be aware of all tax liabilities and benefits. The monthly distribution of the financial settlement will change individual tax burdens based on the amount of maintenance (taxable income to the recipient) vs. child support (tax free income to the recipient). Have a CDFA calculate who would benefit the most from having the dependent deduction and determine how to maximize the child tax credit, earned income credit and childcare credit.
 
Mary Stokes is a Certified Divorce Financial Analyst and a member of the Institute for Divorce Financial Analysts.
 
About the Institute for Divorce Financial Analysts (IDFA)
The IDFA is the premier national organization dedicated to the certification, education and promotion of the use of financial professionals in the divorce arena.
 
The IDFA is dedicated to the long-term financial future of families going through a divorce. The organization was founded in 1993 and currently has 1,500 members across the country.