As if COVID-19 isn’t enough to worry about, Individuals going through divorce are often overwhelmed by the laws involved, as well as by the financial issues. They don’t know what they don’t know, and they are stressed.
Your attorney will be your primary guide through this process, explaining the laws as they apply to your situation and being sure that your goals and interest are addressed in the initial meeting and all along the way. Thee “goals and interest” will be paramount in helping you to make informed decisions, since you will adjust your settlement and the “possession” of the children to achieve your goals.
At each meeting, you will be able to hear your spouse and his or her attorney discussing the situation, the possession, the division of assets and other issues. Here again, you are gaining important information that will help to make informed decisions.
Since you have chosen the Collaborative divorce, you will probably have additional guidance by a Certified Divorce Financial Planner. Often a member of the Collaborative team, this is a Certified Financial Planner or CPA who is trained in divorce and able to sort through the many documents and tax returns and pay stubs to find the pertinent data.
Especially for the stay at home mom who has allowed her husband to completely manage all financial affairs, she will feel helpless and ignorant. She needs education in the family finances from an expert in personal financial planning. She needs to understand which assets are the most important to her, given her situation and earnings ability.
If there are executive benefits involved, the chasm of knowledge is even greater. Even attorneys can be confused by the various types of “incentive compensation” awarded to the executive. What are “phantom stock options” anyway? How can she keep track of any option profits that will be given to her in the future?
Informed decision-making comes from first understanding all the facts, the specific line items in your own financial statement. A patient CDFA can walk you through the asset classes and explain any tax ramifications or any barriers to receipt of the funds.
After the education in your personal finances and assets, your budget is the next important step in informed decision-making. The mere word “budget” is daunting; but with a questionnaire and a CDFA to walk you through the line items, you will have a realistic picture of your needs going forward. In the Collaborative process, you don’t usually complete the attorney’s “financial information statement” used in litigation, but the CDFA can walk you through the budget and cash flow.
“Cash Flow” is the calculation of available income, adjusted for taxes, less your living expenses. This is the key figure in a successful financial future. If the Cash Flow is a negative figure, you must take funds from savings or run up credit cards. If there is a positive Cash Flow, you can save additional funds toward your future.
If you have a grasp of your family financial assets and of your own budget, you have made important strides in maintaining control of your future. Step by step, you achieve a feeling of control due to the guidance and work performed.
Naturally, your attorney will be reviewing all spreadsheets and offering suggestions to help you make intelligent decisions that will help you control your future.
With the “team” approach of Collaborative law, you gain valuable insight to help you make good decisions.