How a Financial Advisor Can Help Settle Your Divorce and Save You Time and Money

If you are considering divorce or negotiating the terms of your divorce agreement, a financial advisor can be a valuable resource for you.?I have found that clients who work with their financial advisors throughout divorce negotiations are better informed as to their options and tend to obtain more favorable settlement outcomes.

I also recently met to catch up with Nick Penna, Senior Vice President and wealth advisor at IronRidge Wealth Management Group affiliated with Raymond James Financial Services in Basking Ridge, New Jersey.?Nick’s firm offers its clients a number of valuable tips when they are going through a divorce, which I summarize here.

First, it’s important to take stock of all assets, debts, income, and expenses for both you and your spouse.?Likewise, you should assemble important documents including bank statements, tax returns, and documents related to marital debt, assets, and property valuations.?You might also consult your financial advisor to help you sort out the future value of pensions and retirement assets.

In addition to helping you plan your post-divorce financial future, your financial advisor can be instrumental during divorce negotiations.?It is important that you consider the long-term impact of any decisions made in divorce negotiations.

For example, your financial advisor can help you decide whether it would be best to keep the home or to sell it, or how you might structure an alimony buyout by accessing and leveraging specific financial resources and considering appropriate tax consequences.

A financial advisor can help you determine which assets are most valuable to you based on your short- and long-term goals and help you avoid settling for less than you deserve. All of this advice can be invaluable to you and your attorney in structuring a settlement that works for both you and your soon-to-be ex-spouse.

Additional financial tips from Nick and his firm when going through a divorce:

Create cash flow. Liquidity can be essential as you think about hiring a lawyer, moving out, etc. Make sure you’ll have enough cash to cover these and other expenses throughout the process.

Get the bills sorted. Come to an agreement about who will pay the mortgage and other ongoing bills until proceedings are final. Stay current on all bills to keep from damaging your credit.

Develop a budget. It’s important to work out whether you can support yourself and your family when you’re on your own.?List your current income and expenses, then work with your advisor to develop a spending plan until the divorce is final and get an estimate of what your post-divorce income and expenses will look like.

If you have children, think about who will pay for large upcoming expenses – things such as buying your teen a vehicle or college tuition – to avoid going back to court for these decisions.

Be vigilant about your credit. It’s important to keep tabs on your credit score and obtain a current copy of your credit report to identify all debts in your name and for which you are jointly liable with your spouse.

Minimize your tax liabilities.? Working with?your financial advisor and tax professional can help you minimize your tax liabilities, as both spouses could be accountable.?Depending on when the divorce is final, you may need to decide whether to file jointly or not.

Hire a divorce attorney you trust.??Get references from family, friends, and colleagues, then listen to your gut and go with a professional who provides level-headed advice with the goal to achieve a fair settlement.

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