We run across many people who are not comfortable dealing with finances, primarily because the other spouse handled things for many years. If you are in this situation, you will at least want to learn the basics so you can make informed decisions during divorce. However, you may have too much going on in your life right now to learn everything you need to know. There is a whole industry of professionals who are willing and able to help you with your finances, and it can be a good idea to get some help. Even those who are used to managing day-to-day finances for the household will want some help in dealing with complex issues such as valuing pension plans or family businesses.
The types of financial professionals that can help people going through divorce include accountants (CPA), business valuation experts, and financial planners. Accountants are used in at least two ways. If one of the assets to be dealt with in your divorce is a business, you may need the help of an accountant to review the business records as part of the valuation process. Such a review may help to identify unusual activity intended to deceive you or the government regarding the state of the business. Accountants also help evaluate the tax consequence of various options that you may be considering as part of your settlement negotiations.
If it looks as though your case is going to trial, and either you or your spouse owns a business, then you will need to hire business valuation experts who will testify. If you are going to settle the case without going to court, then your need for an expert will depend on the type of business being divided. Engage people at varying levels—sometimes a quick and dirty analysis, conducted for a small fee, can be used just for negotiations so that you don’t need to obtain a full-fledged report that an expert would draw up when preparing to give testimony.
Business brokers have day-to-day information on selling businesses. If the business in question is in a highly technical or specialized field, it may be necessary to hire an expert from within that industry. In reality, an expert is anybody who can provide helpful information to the court, so you have to think about where you can find the right people for the case.
Unless you have a relationship with an accountant or business valuation expert, we recommend getting referrals from any attorney or mediator you are working with. Using someone they refer you to helps ensure they can work well together. If you are in an adversarial situation, it is likely that you and your spouse will each have your own experts. If you wind up in court, a judge may even bring in a third, neutral expert. This is the most costly way to do things. If possible, invest time in working to get your spouse to agree to use a single expert at the outset.
Financial planners are primarily helpful when it comes to educating people. If you have never managed your own (or your family’s) finances, then you may want to consider enlisting the services of a financial planner. The one caveat is if your situation is particularly complicated—if you need sophisticated tax advice, for instance—you would be better off consulting a CPA or tax lawyer. When choosing a financial planner, look for one who is independent. There are many financial planners out there, but often they work for a particular company that is tied to certain investments or insurance. In general, you are better off with independent firms or individuals that have access to a variety of funds and insurance companies. When in doubt, ask about the variety of their resources.
The divorce process alters most people’s financial plans significantly. In some cases, people end up with assets that their spouses had previously managed. The spouse acquiring the assets may need assistance in determining how best to manage them. On the other hand, if you are losing assets or part of your income stream, you may need assistance recreating savings plans for retirement or education. This is the domain of financial planners. They can help you determine your net worth, create budgets, manage investments, analyze insurance needs, monitor the results of your plans, and update them as warranted.
Some financial planners now specialize in helping people going through divorce. Rather than simply helping you plan your post-divorce finances, these professionals are involved in the divorce process from the beginning. They can help you with all of the work involved in preparing for negotiations, including preparing the statement of net worth, as well as those realistic budgets. They can help with the creation and evaluation of the financial aspects of settlement proposals. And of course, a financial planner will be happy to help you manage your money after the divorce. An expert focused on these areas may be able to save you money in your divorce by decreasing your legal fees. Just as you do not want to use a lawyer as a therapist, you want to be cautious about relying exclusively on a lawyer for financial advice. Divorce attorneys should have good financial backgrounds, but not all do.
