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Financial Counseling |
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The financial piece of your divorce is extremely important. It is the process of dividing the marital financial unit into two separate financial units. It includes maintenance, care, child-support and education for your children, personal property, real estate, assets, liabilities, businesses, tax issues, health insurance, life insurance, pensions, tax issues, alimony and more. Needless to say, information is your most valuable resource. Without the right information, you won’t be able to make informed decisions. It is not possible to make decisions in a vacuum. It is essential to become financially literate, so you can understand the legal and financial consequences of each financial decision that you make. These consequences can have a great impact on your future.
Therefore, you must educate yourself about finances by reading books, taking seminars, finding a mentor, and talking to accountants and/or financial planners who also specialize in divorce. However, it does not matter how many experts you talk to. Ultimately, this is your financial future not theirs. You need to become your best advocate. It is unrealistic to expect one person to cover all the bases for you. You need to stand up for yourself, or no one else will and trust your instincts to guide you. In other words, if a professional gives you advice that does not feel right to you, trust that. |
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Save Your Money Instead of Hiring a Lawyer |
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Lawyers do not have the time to help you figure out a financial plan that is best suited for you and your family. Also, they are not trained in financial planning or the possible tax ramifications that should be figured into your agreement. We have the time to get you the information you need, ask the right questions, and provide viable alternatives and solutions as well as helping you plan your financial future. We want your financial future to have as positive an outcome as possible.
Since you are deciding on your financial future, it is important to evaluate where you are, figure out where you are going, and have a plan to get there. Your financial plan needs to be well thought out and properly executed and should meet the needs of the entire family. In order to evaluate where you are, you need to do a marital financial statement identifying all assets and liabilities as well as an analysis of your cash flow and net worth. Positive cash flow means that enough money is coming in to pay all of your monthly expenses and you have enough to invest and/or save for the future. Negative cash flow means that not enough money is coming in to pay your monthly expenses and you are sliding into debt instead of investing and/or or saving for the future. Your net worth is the difference between your assets and liabilities. |
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Your Slice of the Financial Pie |
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Determining positive and negative cash flow and net worth is key in determining how your marital pie should be divided up in order for your agreement to be fair and equitable. Once you understand your marital financial statement, you need to figure out what your personal financial statement will look like as a divorced person. This means doing a concise budget and figuring out if you will have a positive monthly cash flow. If your agreement is going to give you a negative net worth and your spouse will have a positive net worth, then the agreement is not equitable. Also, equal is not always fair if the salaries and/or assets are disproportionate. In this case, a fair share would mean more than 50% for one spouse. It is imperative that you have some idea of how your agreement will play out for you in ten years. If your spouse’s net worth will be doubled and your net worth will be far less, you might want to go back to the drawing board. How much will you need from the marital pie to get a jump-start on your new life? It should also be noted that non-monetary contributions such as being a homemaker entitle that spouse to a share in the marital assets.
While you are planning and working through your divorce, it is wise to create a financial plan based on projected goals you want to achieve in two, five, ten and twenty years and stay the course. The goal is to continually increase your net worth. You need to plan beyond retirement not just up to retirement. Very few people are able to get by on what they earn today and most are not prepared for retirement. |
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Finances Forward |
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After you have done your financial homework, be prepared to make mistakes. No one becomes successful without making mistakes or taking some risks. Mistakes give you the wisdom and experience to create success. The only difference between a winner and loser is that the winner got up and tried again. So, keep the faith and believe in yourself.
You should give yourself a minimum of five-ten years to get on your feet, and your agreement should reflect that time frame. The longer you have been married, the longer the window of time should be. Your financial agreement should serve as a bridge to a new life and a prosperous future. |
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Are You Ready to Take Control of Your Financial Divorce? |
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Get started today and take control of your financial divoorce with a FREE Divorce Assessment!
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"A Guide to Divorce Mediation"
by Gary Friedman
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"Crazytime"
by Abigail Trafford
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