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Divorce and Informed Financial Decisions

The end of a marriage can bring sadness, anger, hurt, and fear of an uncertain future. However, it is during this tumultuous and life altering period that financial decisions with long-ranging consequences are being made. Often as a simple solution and to avoid adversarial litigation, divorcing spouses settle for a 50/50 split without truly understanding what they are dividing or the financial ramifications. It is difficult enough to contend with day-to-day issues, let alone trying to understand and divide a complicated investment portfolio while riding an emotional pre-divorce roller coaster.

As a result of the complexities of short and longtermfinances, Financial Divorce Specialists (FDS) or Certified Divorce Financial Analysts (CDFA) are becoming a much sought-after neutral third-party in the process of separation and divorce. They are trained to provide clients with a clear picture of divorce finances, to help divorcing couples split assets fairly, and establish a sound financial plan for the future.

An FDS or CDFA will address the immediate concerns and anticipate future financial considerations based on different scenarios for dividing assets. All assets and income including salaries, health benefits, retirement plans, stock options, real estate, spousal support, child support, living expenses, and tax implications are factored into various financial projections. The information helps both sides make decisions.

By providing a comprehensive view of the finances, an FDS or CDFA works to a truly equitable settlement by applying inflation, cost of living, taxes, capital gains, investment losses and other aspects for a full financial picture. By addressing each asset and source of income separately, the spouses are not just trading assets back and forth but analyzing financial and tax implications to reach an equitable distribution.

When each spouse receives the same dollar amount of dissimilar assets it rarely works out to a fair settlement. Too often what appears to be equal can eventually leave one of the parties in deep financial distress and to maintain even a modest lifestyle, the lower wage-earning spouse is forced to use savings and other assets.

Other common financial errors can include; keeping the matrimonial home when the spouse can’t afford to live in it; failing to guarantee spousal and child support payments with life insurance on the person who is supposed to pay; and believing that the settlement must conform to what a judge would order if the case went to court.

Financial Divorce Specialists or Certified Divorce Financial Analysts can also help spouses understand and organize their financial information in advance of legal meetings. This allows the lawyers to focus on finalizing a settlement.

Working with a Financial Divorce Specialist or a Certified Divorce Financial Analyst will provide clients and their families with a clear and complete picture of their financial future. It is this knowledge and the peace of mind that financial needs have been fully addressed that will give clients the freedom to move forward and begin their postdivorce life.

It is important to note that an FDS or CDFA works with (and does not replace) the clients’ lawyers and financial advisors to resolve all financial issues. In the role of FDS or CDFA, they are precluded from taking assets under management or selling product.

June Oliver, CGA CFP FDS CDFA EPC
905 257-6528
http:/www.taxmanagementcentre.com

June Oliver is a Certified General Accountant, Certified Financial Planner, Financial Divorce Specialist, Certified Divorce Financial Analyst and Elder Planning Counselor. June is owner of The Tax Management Centre with locations in Oakville and Mississauga, Ontario. She is also a graduate of the McMaster Family Mediation Certificate program. The combination of June’s background in taxation and financial planning has made her a much sought after Financial Divorce Specialist in Ontario.