Divorce is becoming more common and it may seem contrary to common expectation but the fact is that it is also getting more complicated too. This can be predicted quite easily because divorce has become so common that about half of first marriages and sixty percent of second marriages end in divorce. This is because the things related to divorce, its law, process, and outcome have become predictable and standardized.
Among all the issues that are predicted to arise and one must take into account are the financial aspects. It has been seen that finances become the most complicated issue faced by a couple quite quickly and in today’s world finances have become extremely complex. Unlike today, the people didn’t own stock options, mutual funds, blended families, mortgage debt and credit cards. Life was somewhat simpler. Divorce was often very simple and divorce rates were also lower.
Due to such complexities, most spouses and their lawyers seek to ask help from financial professionals. These professionals play a very important and active role in helping the spouses to sort out their financial details. However, these professionals are trained to understand investments and taxes but they are still not professionally trained to specifically know and handle the financial issues of a divorce. Due to this fact, when a client asks a professional for help, they are sometimes unable to provide some very critical information and insightful advice. This sometimes may very adverse results and the long-term impact of such financial decisions could be very devastating for the client’s family and future.
To resolve this issue, Certified Divorce Financial Analyst is needed and due to the increasing rates of divorce, Financial Professionals are now getting trained particularly for financial matters of divorce. These CDFAs can assist the clients in sorting out their expenses, assets, and liabilities. They help to create a household budget, proposals for the division of liabilities and assets and assessing the future or post-divorce needs for the client.
Some of the most common mistakes made when sorting the finances include consideration of social security benefits, negotiating on keeping the marital home when it’s not affordable for you, deciding spousal or child support payments and ownership of life insurance contract, understanding the QDRO complications to divide retirement assets, understanding the implications of non-modifiable and modifiable separation agreements and the tax allegations.
To avoid the mistakes mentioned above, the spouses seeking for getting a divorce must work closely with their attorneys and CDFAs to sort out each and every financial aspect and make detailed plans and write everything down. They must decide everything with the mutual consent of their spouse and look at all the possibilities to come to an agreement with them. Once everything has been sorted out, the spouses should sign an official agreement to make the decisions taken official and so that in future they don’t have to face any kind of problems related to finances. If the spouses don’t take help from professionals to sort these out, there are higher chances of them and their family facing quite serious consequences in the future.
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- Bill Hunt discusses divorce over the age of 50 on Fox 8 November 1, 2016 mmadmin
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