Divorce is a complex process that affects just about every aspect of your life, from financial to emotional, physical to legal. For affluent couples with ultra-high net worth, the complexity is high, and the stakes are even higher. You will be making some of the most difficult and important financial decisions of your life during an emotionally chaotic time, which is why you need a team of professionals to help you balance the legal, tax and financial aspects along with the emotional and family dynamics.
Your team can have a significant impact on the path and outcome of your proceedings, so it’s critical that they have a deep understanding of your financial situation, family structure, and long-term goals.
Here is who you need on your divorce team:
Family Law Attorney
What do they do?
A good family law attorney is the most important member of your divorce team. Your family law attorney will provide legal advice and guidance through this complex process, so it is crucial to hire an attorney who is licensed to practice in your state and whose expertise aligns with your specific situation (i.e. experience dealing with high net worth divorce, splitting business interests, custody, special property, real estate).
Why do you need one?
One of the first things you need to do will be to get a clear picture of the laws in your state regarding the dissolution of your marriage.
The outcome of your divorce proceedings will alter the course of your life, so making an informed decision and choosing a family law attorney who has experience, is a skilled negotiator, and is firm but reasonable will start you down the right path.
Certified Divorce Financial Analyst
What do they do?
A CDFA (Certified Divorce Financial Analyst) is a financial expert, usually a financial planner, who has been specially trained in issues that pertain to separation and divorce. A CDFA will help you determine the short-term and long-term financial impact of any proposed divorce settlement.
CDFAs are professionals who provide important information on financial issues that are related to the divorce, like tax consequences, dividing pension plans, continued health care coverage, stock option elections and much more. A CDFA will also help your attorney with the tools they need to help prove your case.
Why do you need one?
If you have assets in the seven or eight-figure range, the financial ramifications of divorce can be extremely complicated. A CDFA can formulate financial needs and goals, in the form of a formal financial plan, to support the negotiations of your divorce attorney. They will also ease your financial worries during a time of extreme stress and assist you in understanding how the financial decisions you make during your divorce will affect your life in the long term. Preventing financial mistakes during a divorce are one of the CDFA’s main priorities since they can have far-reaching consequences for your new life.
CPA
What do they do?
An accountant’s primary role on your divorce team is to provide solid tax advice. Because of the intricate nature of the Internal Revenue Code, a CPA’s expertise can have a substantial impact on the amount of taxes either saved or owed as a result of your divorce.
Why do you need one?
As an affluent couple, when you divide your marital estate, there can be significant savings opportunities, as well as significant risks, if taxation is not considered. If you are a business owner or have other complex assets like trusts and real estate, a skilled CPA can often identify methods to reduce your tax burden during the divorce process and beyond.
Trust and Estate Attorney
What do they do?
If your family has established trusts, it is a good idea to add a trust and estate attorney to your team. A trust and estate attorney ensures that trusts are treated properly during the asset division process and that you maintain a solid estate plan for the future.
Why do you need one?
Estate plans are developed with you and your family’s goals in mind, and divorce can alter those goals. That’s why it’s imperative that you update your plan to reflect your altered circumstances. In addition, you will likely have other important documents, such as living wills, health care proxies, and HIPAA authorizations that should also be created or updated to make sure your wishes are carried out.
Forensic Accountant
What do they do?
We’ve already discussed the complex financial picture that needs to be navigated in a divorce with significant assets. A forensic accountant can clarify this intricate financial picture by tracking, tracing and analyzing the movement of assets over specific periods of time to give an accurate portrayal of cash flow.
Why do you need one?
If your divorce case requires special financial attention, or you worry your spouse might have hidden assets, a forensic accountant is an important resource for your divorce team. Forensic accountants are experts in not only recognizing what the personal and business records show, but also what maybe withheld, and will testify in court to their findings.
If you are in the midst of a divorce or preparing to divorce, one of the first items you should do is to assemble your top-notch team of advisors who are experts in their respective fields and focused on placing your needs first. Divorce is a difficult, stressful time, but having your team in place can relieve a lot of stress and fear.
