Do I need a divorce financial advisor?

Divorce can be one of the most challenging experiences in life, not just emotionally but financially as well. Many people find themselves grappling with not only the loss of a relationship but also significant financial upheaval. According to recent findings, women's incomes fall by an average of 33% following a divorce, compared to an 18% decrease for men.¹This substantial disparity highlights the critical need for specialized financial guidance during and after the divorce process.

Understanding the role of a divorce financial advisor

A divorce financial advisor specializes in the financial aspects of divorce. They are not just typical financial advisors; they have specific training and often a certification, such as a Certified Divorce Financial Analyst (CDFA®), which equips them to deal with the unique challenges of divorce finances. Here are a few reasons why you might consider hiring one:

1. Expert assessment of financial situation: Divorce financial advisors provide a thorough analysis of your finances, including the long-term effects of dividing property, retirement funds, and even debt. Their expertise can help you make informed decisions that will benefit you in the long run.

2. Tax implications: Understanding the tax implications of alimony, child support, and the division of assets can be complex. A divorce financial advisor can provide crucial guidance on minimizing tax burdens post-divorce.

3. Asset division: Splitting assets equitably does not always mean splitting them equally. A divorce financial advisor can help determine the most beneficial way to divide assets, considering factors like liquidity, cost basis, and future value.

4. Future financial planning: Post-divorce life comes with its financial challenges. A divorce financial advisor helps you plan for the future, including setting up a new budget, saving for retirement, and establishing financial goals that align with your new life circumstances.

5. Legal and negotiation support: While they do not replace a divorce lawyer, financial advisors can work alongside your legal team to ensure that financial documents and proposals are accurate and fair. They can also help strategize negotiations based on your financial priorities.

When should you consider a divorce financial advisor?

The simple answer is: as early as possible. If you foresee a divorce in your future or are currently navigating one, a divorce financial advisor can be instrumental in helping you maintain financial stability. The earlier they are involved, the better they can help safeguard your financial interests throughout the divorce proceedings.

Divorce is undeniably tough, but you don’t have to face the financial challenges alone. A divorce financial advisor can provide the expertise and support you need to help you emerge from a divorce with your finances intact and a confident future.

1. https://group.legalandgeneral.com/en/newsroom/press-releases/the-divorce-gap-women-see-incomes-fall-by-33-following-divorce-compared-to-just-18-for-men