Should You Consider A Divorce Financial Analyst for Your Divorce?

July 24th, 2020 by Jim Allen

As the Baby Boomer generation enters or nears retirement, they are faced with the increased likelihood that their retirement years could be a very long period indeed. People in their 50’s and 60’s must now prepare for the possibility of 30+ years in retirement and the prospect of increased health care costs as we live longer lives. Another unexpected consequence of people living longer is the phenomena of later life divorces. While divorce rates in general have been falling, the incidence of “gray” or “silver” divorce (as divorces for people over the age of 50 have been called) has almost doubled over the past 20 years.

Silver divorce situations are generally more complex than younger aged divorces for a variety of reasons. For example, there is typically more wealth to be divided and the focus for the divorcing couple may have shifted from assets to income. In addition, the timeframe to financially recover from divorce is more compressed and can be complicated by reduced employment prospects or poor health due to age.

In addition to the rise of silver divorces, the COVID pandemic has also created a spike in divorces of all ages. This may change the trend of falling divorce rates that has occurred over the last decade. Because of the increase in silver divorce, there has also been a rise in various options to make the divorce process easier and less adversarial. These include the use of mediators instead of lawyers or using the collaborative divorce process. Another option is to use a divorce financial analyst or CDFA to help with the financial aspects of the divorce settlement agreement.

At Anchor Bay Capital, we offer divorce analysis services and have a CDFA on staff.

What is divorce financial analysis at Anchor Bay Capital?

We act as a neutral financial professional for either a couple or individual who may already be in the process of mediation, collaborative divorce or litigation. We assist with creating a fair financial settlement and asset division, clarify income available for spousal and child support, identify all monthly expenses and develop a realistic budget. We also look at the myriad of issues can arise from divorce:

  • What if you agree to accept less support than is really needed?
  • What if you agree to support payments that you cannot really pay?
  • What if one spouse agrees to keep the house instead of a future pension and then cannot afford the ongoing maintenance required on the house?
  • What if one spouse does not have retirement funds put away?
  • What if future taxes are due on an asset that was not considered when divided?
  • What if retirement plans are not divided and transferred properly?
  • Did one spouse have separate property that should have been financially identified?

We can help with these issues and much more.

Can’t a CPA or Regular Financial Planner Do These Things?

Although we do not provide legal advice or legal documents, our expertise in divorce planning can help cut the cost of a long court proceeding by paving the way to a fair settlement for each spouse. We can become part of the professional team (attorney, mediator, therapists etc.) to financially evaluate different settlement options. We are aware of the specific tax laws that apply to divorce and have background knowledge of the legal issues in divorce along with our deep financial planning expertise. When investments are involved, we can evaluate them as to their cost basis and the tax liability if they are sold.  CDFA’s have specific training and experience in divorce, tax, and financial planning issues so they are in a unique position to assist with this type of service.

If you are in the process of getting divorced or contemplating a divorce, consider the benefits of using a CDFA to help evaluate your financial situation and options. Initial consultations are complementary so contact us to schedule your appointment.