Do You Need a Financial Specialist for Your Divorce?
Divorce is a major event for almost everyone who goes through the process. Whether a couple is just starting out financially, has experienced some tough times, or has extensive holdings, the process of asset division and separation of finances can be challenging and complicated. In many cases, engaging financial professionals alongside your divorce attorney can help you to build a team of experts who can assist you in emerging successfully from the divorce.
The Financial Impact of Divorce
In many cases, a divorce is one of the single largest financial events in any person’s life. It can involve the sale and purchase of real estate, result in the division of retirement funds and even affect the distribution of closely held businesses. The longer the marriage and the greater the financial ties and resources shared between the spouses, the more complex and impactful the divorce becomes. In addition, even long after the emotional and personal aspects of the divorce have faded, the consequences of the financial decisions made during the divorce process and immediately after will linger for years to come.
When you consider divorcing, you will want to turn to a New Jersey family law attorney for advice and guidance throughout the process. Whether your divorce is litigated, negotiated with the assistance of your respective divorce lawyers or mediated through a professional, your family lawyer works with you to protect your interests and help you achieve a fair settlement. Working for a fair property division is important to make sure that your needs are met moving forward and helps to lay the groundwork for future financial success.
Building Your Professional Team
As you work with your divorce attorney through the New Jersey family court process as well as negotiations for a marital settlement agreement, you may also benefit from a broader professional team to advise you about the financial side of divorce. Your family law attorney will work to advocate for you in terms of alimony, child support, parenting time and other key divorce legal matters. They may also be able to recommend financial advisors and other professionals who can help you plan for your post-divorce life as well as experts to address financial issues during the divorce itself.
One of the first things to prepare when meeting with your divorce lawyer is an overall inventory of your finances and your financial documents. These include writing out your assets and liabilities, gathering your tax forms and income documents and assembling information about your retirement funds, investments, cryptocurrency wallets and other relevant accounts. You will be asked about your regular expenses as an individual and as a couple and the amount of money you will need to continue those expenses after a divorce.
Some people may have all of this information on hand, while others may need to do more research or seek advice to get a fuller picture of their current financial status. This information is key to going through the property division process and working to protect your interests.
Financial Specialists in a Divorce
There are multiple financial professionals that you can work with during your divorce, in many cases alongside your family lawyer. The complexity of the financial side of the divorce tends to increase with greater income and assets. When both parties have relatively little money and few assets, they may not own a marital home and may also have few conflicts about how to divide up their property. However, business owners, investors, executives and other professionals may be likely to have complex negotiations regarding the financial distribution that accompanies a divorce settlement.
Some of the experts and advisors you may work with during the divorce include the following:
- Business Valuators – If the divorce includes the ownership of a business, both parties may hire their own business valuator to determine its market value. Both parties may be far apart originally in their estimates. In some cases, each lawyer may work with an expert, or they may agree together to hire one neutral expert and use that person’s value to determine the dollar value assigned to the business. This is important regardless of which spouse plays a greater role in corporate management on a daily basis.
- Certified Public Accountants – There are several reasons to work with a CPA during a divorce. If one party is being accused of hiding assets, using offshore accounts or otherwise attempting to keep funds from being properly divided in the divorce, a forensic accountant may be brought in by the party making these allegations. If a business owner has confusing financial records, a CPA may be brought in simply to make them more understandable to both parties and their lawyers. In addition, many divorce actions have tax consequences, from decisions to sell the marital home to managing the distribution of a retirement account, and a CPA can advise about which routes are more favorable for taxation.
- Certified Financial Planners – Unlike the previous experts, a financial planner is there to help you plan for your life after a divorce. While a financial planner may be able to help advise you about a divorce settlement, they are also there to work with you to plan for the future including retooling your investment and retirement decisions in order to recover most effectively from the divorce and move toward future success.
- Certified Divorce Financial Analysts – These divorce experts may also be financial planners or CPAs, and they work with one or both parties to help spouses and their divorce lawyers reach a mutually acceptable marital settlement agreement. They may advise on managing tax law and obligations for both parties, help to point out the financial consequences of different support arrangements and analyze key financial documents during the divorce.
Essential Financial Questions During a Divorce
There are some major financial questions to consider during a divorce. Whether you are litigating in court or going through negotiations or mediation, you will still need to conduct a complete financial review. Parents, in particular, may need to pay attention to the financial consequences of divorce in order to ensure that they have the funds they need to prepare for their children’s future and minimize the effects of the divorce on their lives. When planning future expenses, it is important for both parents to take the children’s needs into account in order to prevent a future crisis.
It is also important to consider the needs of your specific children, including medical costs, tutoring bills, special school programs, travel sports and other unique expenses for each child. Both parents may also reach a divorce settlement that includes mandatory life insurance paid to the benefit of the child or a trust set up in their interests.
For many people choosing to divorce, the decision of how to handle the marital home can be a major challenge. The best emotional choice may not always be the best financial one. If one spouse chooses to keep the home, they may need to refinance the home into a mortgage in their name alone and buy out the other spouse. A financial advisor can help both parties to decide the best course of action for future financial security. If the couple decides to sell the home and split the proceeds, financial experts can also provide key advice about the real estate market, potential tax consequences and other concerns that could affect the final decision.
Preparing Financially for Your New Jersey Divorce
Your New Jersey divorce attorney can work with other financial professionals to help achieve a fair outcome during the asset distribution process. Contact New Jersey family law attorneys with experience in divorce finances at Lawrence Law by calling 908-645-1000 or by submitting our online form for a consultation at our Red Bank or Watchung office.