Divorce will affect more aspects of your financial life than any other course of action that you undertake in your lifetime. In these circumstances, expert guidance and prudent decision making are critical to a fair and equitable settlement. A spouse or partner who has never handled the family’s finances or a family with special needs children may find such decision making particularly overwhelming.
Collaborative Practice offers you the guidance of a neutral Collaborative Financial Professional. Your Collaborative Financial Professional will provide you with organizational tools, information and guidance in resolving your financial issues. He/she can help you and your spouse or partner devise short and long term strategies for your financial security. The assistance of a Collaborative Financial Professional will provide you with peace of mind as you navigate through a potential minefield of financial issues.
Overview of financial implications in divorce
The neutral Collaborative Financial Professional can help you to:
- understand complex financial documents and products;
- compile and prepare documentation required for your financial analysis;
- value critical assets, such as, businesses, pensions, stock options, trusts;
- assess the income/cash flow that is available to meet your needs as a separated family;
- assess the adequacy of your resources;
- negotiate child support and/or spousal support arrangements;
- budget and develop a financial plan;
- achieve an equitable distribution of your assets and debts;
- assess the benefits/detriments of the sale or transfer of critical assets;
- evaluate the income tax consequence of your financial choices; and
- plan for critical future events, such as, retirement, the development of new families and the like.
Tips on how to make good financial decisions during divorce:
Dividing family assets, including the family home:
The decision as to whether to sell the family home can have significant and long terms effects on the wellbeing of your children, as well as your financial wellbeing. It can also be a very emotional decision. Your Collaborative Financial Professional can provide you and your spouse, or partner, with invaluable information as to:
- the affordability of maintaining the home;
- the costs and benefits of selling thehome; and
- the costs and benefits of transferring thehomebetween spouses or partners.
There may be other assets which will be sold, transferred or divided in the context of your divorce settlement. These assets include real properties, pensions, stock options and registered investments. Your Collaborative Financial Professional can assist you in assessing your options for the handling of such assets. He or she will inform you of the tax consequences of any proposed transfer, division or sale of assets.
Dividing the debt in your marriage:
Debt which has accumulated in a relationship must be reasonably and equitably allocated between you and your spouse or partner. The Collaborative Financial Professional can provide you and your spouse, or partner, with an unbiased overview of your debts and obligations. He or she can assist you in determining the most reasoned and cost-efficient method of sharing and managing your debt.
Planning for the children’s financial needs:
Your Collaborative Financial Specialist will assist you in addressing your children’s current and future financial needs, including the management of educational savings, post-secondary educational expenses and the cost of care of special needs children. The formulation of a plan in relation to your children financial needs will help to minimize the potential for future conflict.
Planning for future financial/retirement needs:
Pensions and other retirement savings accumulated during a relationship are often the most valuable assets, aside from the family home. Your Collaborative Financial Professional can help you to project future retirement needs. He/she will then assist you and your spouse, or partner, in determining how to allocate and manage existing resources to best meet those future needs.
Planning for insurance for the parties and children after divorce:
It is important to plan for the financial needs of the family, in life, and in the event of the passing of you or your spouse/partner. Where there is an arrangement to support the children, a spouse or partner, or where there are special needs requirements, insurance may be used to secure this arrangement. Your Collaborative Financial Professional will help you to assess your insurance requirements and options.
