What is divorce financial planning and how can it help women going through divorce?

Aside from the emotional havoc a divorce creates in women's lives, it begets a myriad of serious financial issues that are pressing, and difficult, to work out:

	What about alimony?
	Will I have sufficient child support?
	What becomes of retirement benefits and IRAs?
	How can investments and pension plans be handled so that my interests are not neglected?
	Will I be able to handle paying the mortgage?
	How are my income taxes to be handled?
	What about Social Security benefits?
	Is there any way to safeguard my childrens and my own medical benefits?

Divorces often seem to be about the past. Who did what to whom? Who did the most work? Who made the most money? Who spent the most money? Who contributed which assets to the marriage?

Divorce financial planning is about the future. A divorce financial analysis looks at the years following the divorce to see how the both the man and the woman can expect to fare. Divorced women often suffer unduly in the course of a divorce settlement, because they are not necessarily working full time and their current income level is lower than that of their husbands.

Will the man enjoy a comfortable lifestyle while the woman barely scrapes by?  A divorce financial planner can help you answer this question: "How can I be sure that I will be financially secure after my divorce?"  If there are major problems involved in the projected plan, he can point them out and suggest alternatives that will work more fairly for both spouses.

Our financial lives are complicated. When we do a divorce financial analysis it includes the most important variables that affect your financial security:

inflation	future income	income taxes
pay increases	child support	alimony
mortgages	Social Security	retirement plans
pension plans	investments	IRAs

We don’t believe that any woman   would knowingly agree to a divorce settlement that leaves  her in difficult financial circumstances. Yet we have all met many divorced women stuck in just that situation. The only sensible conclusion is that these women  did not truly understand what they had agreed to in accepting the divorce settlement. One unfortunate truth of divorce settlements is that, once signed, they are difficult to change. As divorce financial planners, we develop a variety of possible financial settlements in order to help our clients find one that meets their needs.

Why do you need a CERTIFIED DIVORCE PLANNER^TM practitioner if you already have a divorce attorney?

The question answers itself if you reverse it: Why do you need a divorce attorney if you already have a divorce financial planner? Answer: Because financial planners are not expert in the law and lawyers are not expert in financial planning.

We believe that one of our jobs is to provide you and your attorney with the best possible information about your financial needs – now and in the future – so that your attorney can negotiate the best possible settlement for you. If you are unable to reach a settlement amicably, your attorney may want an expert witness to testify in court about financial issues.

Who would benefit from using a CERTIFIED DIVORCE PLANNER^TM practitioner?

Any of these three indicators means you are a prime candidate for divorce financial planning:

1. You have been married for 15 or more years.
2. One spouse earns 75% or more of the family’s income.
3. One or both spouses owns all or part of a business.

Some people believe that financial planning is only for the wealthy. We have found that middle income households often benefit most from financial planning for the very simple reason that they have less room for error. Charles Dickens, the 19^th century English novelist, observed in one of his books that the difference between comfort and misery is often only "half a pound a year."  Inflation has changed the amounts and we use dollars instead of pounds, but the principle remains true.

 

Be sure to look at our discussion of 13 Mistakes Not to Make, to help you recognize some of the pitfalls of a poor divorce settlement, and to teach you what to look out for in your divorce financial planning.

Risk Management Group, Inc.
Jamie S. Lapin, CFP™ practitioner, CDFA

email: info@divorce-and-money.com

Certified Financial PlannerTM practitioner Certified Divorce Financial Analyst

966 Hungerford Drive Suite 20A Rockville, MD 20850

Tel: (301) 838-4111 Fax:(301) 838-4211

 
 

Securities offered through H. Beck, Inc., Member NASD/SIPC
11140 Rockville Pike, 4th Floor, Rockville, MD 20852 301-468-0100
Jamie H. Lapin is a registered representative of H. Beck, Inc., which is unaffiliated with Risk Management, Inc.

The contents of this page are for informational purposes only and are not a solicitation to either buy or sell or transact business in your home state. Jamie S. Lapin, CFP™ practitioner, CDFA,  may only transact business in the states in which it is licensed. Please let us know where your  home state is when asking for additional information.

Information presented at this web site does not constitute legal advice nor is it an indication of what a court of law may decide in a litigated divorce case. Anyone contemplating or actively pursuing a divorce is strongly urged to seek competent legal counsel.

Certified Financial  Planner ^TM, CFP™, and are certification marks owned by the Certified Financial Planning Board of Standards, Inc. These marks are awarded to individuals who successfully complete the CFP Board's initial and ongoing certification requirements.