If you’ve been thinking about divorce, quarantining 24/7 with your spouse probably has been stressful, and may have illuminated issues and concerns that you were previously able to avoid. Perhaps you are thinking that now is the time to consider your future plans.
The good news is that being stuck in the house is actually a blessing because you have time to prepare for your next steps. As with everything else, the courts have been closed for two months and are now only open to prioritizing electronic filings of emergency cases; the courts will be backed up for a very long time.
Divorce is a document-driven process similar to a complicated business transaction. The process requires a lot of documents to convey an accurate picture of your lifestyle. Financial statements are used as the basis for negotiations and the better prepared you are at the beginning, the easier the process will be. You must become thoroughly knowledgeable about your financial situation. Even if you were involved in your family’s finances, you might not know everything about all of your assets. Wealth is a complicated business, lots of details matter when it comes to an equitable division of assets.
Create Your Team
The same way that you build teams to help you with other projects, you need to put together a team for your divorce. A typical team includes a therapist, a parenting coordinator (if there are minor children), an attorney/ mediator, and financial professionals including a CPA, wealth manager, and a CDFA (Certified Divorce Financial Analyst). The financial professionals help create an accurate summary of your assets/liabilities and analyze various financial scenarios based on your Statement of Net Worth.
Statement of Net Worth
A CDFA will help you complete the Statement of Net Worth (SNW), the court required document used to negotiate the division of assets/liabilities. The SNW also includes your monthly spending budget. Although the SNW is one document, it actually contains two separate sections: monthly income/expenses and assets/liabilities.
The monthly expense section reflects your cash flow – monthly income and monthly expenses which create a picture of your lifestyle and the asset and liability section summarizes your assets including savings, real estate holdings, businesses, investments, insurance policies, retirement accounts and liabilities including mortgages, loans, and credit card debt.
The SNW is the key document that the attorneys use to negotiate your divorce. It needs to be accurate and complete.
Most people find the preparation process overwhelming. The silver lining as you face divorce during the pandemic is that you will have the time to become educated and manage all of the vital prep work to help you make the best decisions.
Ilene Amiel, CDFA is the owner of Divorce Financial Consultant. She has been managing finances for individuals and businesses for over 25 years. Ilene started her company after going through her own divorce after a long marriage. www.DivorceFinancialConsultant.com
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