7 Excuses to Not Hire a Divorce Financial Consultant
If you are going through a divorce, and reading all you can to learn what you need to do, you have no doubt read much about the need for a divorce financial planner on your divorce team. Heed that advice. Your divorce is most likely the largest personal financial decision you will ever make. Think about it. This is something you may have never done before. The emotions of the situation will make you not your best, most clear-thinking self. And, exactly how well versed are you in the subtleties and tax issues of your investments, retirement accounts, and debts?
So, maybe you're beginning to believe that you need financial help. Find your best excuse not to and get rid of it. Then work your way throught the rest of them, whatever applies to you. Then decide to get yourself the help you need.
Excuse #1: We don't really have that much money
All the more reason to be particularly careful with what you do have. If you had a lot of money, would it matter all that much if you got $9 million or $10 million in your settlement? Probably not. If you only have a few hundred thousand, and most of that is tied up in the house, every dollar you may, or may not, get is critical. Or, what if some of your savings have concealed tax bills in them, and others do not. Do you know which is which? A retirement account, with taxes possibly due on those funds, may not be worth what you think it is, after taxes are paid, by you.
Excuse #2: It will cost too much
It could cost you more to NOT have a financial professional on your case. The original reason why I do divorce financial work is because of what I would see, as a financial advisor, after the fact, when a divorce settlement was the source of people's future financial ruin. There are many reasons why this may be the case. However, it is not unusual. When persons in finance related professions, like banking, insurance, or mortgage lending, learn what I do, they all want to tell me about the devastating things they see in their clients' situations post-divorce. The fallout they see usually manifests itself years later and is not so obvious to the novice or financial generalist at the time of the divorce.
Excuse #3: I don't have all that financial information
Lack of information, documentation, and access to your accounts, means you have even bigger problems. A divorce financial consultant will provide education for you during the process so you understand much more than prior to the divorce.
If you cannot provide the required documentation, I will work with your attorney to obtain what is needed from your spouse through his/her attorney. This is part of the "discovery" phase of your divorce. It is routine for me to advise attorneys on the details of what financial documents to request, help draft those requests, then examine and explain financial documents after they are obtained.
Excuse #4: I don't have the time to deal with another professional
Just a poor excuse. You won't get much sympathy from me. This divorce will require your ultimate effort. It is about the rest of your life and your future financial well-being. If you have a work situation, where time away for appointments is an issue, talk to me about an after-hours appointment or how effectively we can work by phone and email. I provide services to clients around the country, whom I have never met, by phone and electronic communication.
Excuse #5: My attorney said I don't need one
This is a red flag. I believe your attorney should accommodate your wishes regarding how your case will be managed and with what kinds of expertise. They are your authority on the law. You are the decision maker regarding your case. Ask your attorney some hard questions regarding their financial expertise. Review their services agreement that you signed, for the degree of responsibility they are willing to accept for the financial issues in your case, and you may be surprised.
If they tell you they "have been doing this for 20 or 30 years and can handle everything," go back to what I said regarding the kinds of outcomes I, and others, have seen over those years. Also, we have never had such complex family finances and divorce tax issues as we now have. The days of working 40 years for a gold watch and pension are gone. Families have been forced into having financial tools and products that neither they, nor most attorneys, thoroughly understand. Slicing and dicing these assets is even more complex than managing them intact.
Excuse #6: I already have a financial advisor or CPA
Your current financial advisor or CPA is most likely a generalist and not a specialist in the financial issues of divorce. The divorce situation triggers the application of many exceptions to customary tax rules, as well as special rules that apply only to divorce. We have also had specific training in the principles of family law with regard to divorce. In fact, your financial advisor or CPA should graciously refer you to a divorce financial consultant and cooperate with them if necessary. If you had a brain tumor, you would want your primary care physician to refer you to a specialist. Divorce finance is the "neurosurgery of financial services."
Further, if your current financial professional has been serving both you and your spouse, such as managing an IRA for each of you, or a joint investment account, or preparing joint tax returns, they cannot feasibly, or ethically, advise each of you on your respective best interests, without automatically disadvantaging the other. You need someone else to help you with this divorce, then return to them for non-divorce services if you wish.
Excuse #7: I'm not sure how to pick one
I understand. There are good and not-so-good in every profession. Be critical and selective. I suggest you chose someone who is, first and foremost, a licensed and registered Financial Advisor or Financial Planner who has additional specialized credentials in the finances of divorce. Further, you will want to know that they have significant experience in divorce finance case work and may have testified in deposition and/or court a number of times. Question them regarding evidence of their standing among their peers, as well as recognitions or awards they may have received. Finally, be sure this is a person you can feel comfortable with and confident about. They will be an important member of your team. See more about choosing your divorce financial planner here.
Hopefully, we have dismissed all the excuses why you may not yet have a divorce financial planner on your professional divorce team. Remember, this is about the rest of your life. Someone once told me, "I was taught to never try to save money on parachute packers, neurosurgeons, and divorce financial planners." Good advice.
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