Divorces are complicated. There is no one solution that fits all. In fact, family law is one of the most difficult areas of the law due to all the moving parts. Think about it: the emotional impact of severing the family must be addressed while the financial concerns of both parties and the children must be considered. In fact, fear of making a financial mistake with long-lasting ramifications blocks many couples from reaching a quick and amicable resolution.
In most cases, it’s beneficial to have a team of professionals that includes not only the family law attorney but a divorce financial advisor as well.
The attorney’s role is that of coach and quarterback. As coach, the attorney has knowledge of the myriad rules of the game as well as how to negotiate with the other team. Surviving the divorce as financially and emotionally intact as possible is every client’s goal.
In this regard, the attorney acts as quarterback, inching the ball down the field to achieve the client’s goal. Along the way, one of the attorney’s most important tasks is identifying and valuing of all the marital property and income sources. Beyond that step, the critical question: what is the best way to divide the property as well as the income in the case of child support and/or spousal support?
Here the divorce financial planner becomes an important part of the equation. He or she helps the client define the settlement they want, strategizes with the attorney and provides supporting documentation for the attorney to use in negotiations. Spreadsheets and graphs help the client understand what they can afford and help them prioritize their financial goals.
The financial advisor should offer tax advice, pension and retirement account expertise as well as cash flow planning to help the team devise the best strategy. It is important not only to make sure that all assets and liabilities are accounted for but also to maximize whatever cash flow there is in a creative way to assist the party who has not been the primary wage earner to move forward sensibly.
There is an old saying that knowledge is power. It’s far easier to achieve a divorce settlement when the client understands their own financial situation inside and out and is provided with expert guidance from the attorney. The result is that fear of the unknown is removed, leaving the path open for a win/win on both sides. That is the true advantage of the team approach to divorce.
These are some of our thoughts…what are yours?
Written by: Henry S. Gornbein, Esq. and Jacqueline B. Roessler, CDFA