FAQ

Finances are often one of the biggest concerns for both parties during a divorce. A financial planner can help you understand what you’re legally entitled to, as well as the tax and other implications of valuing your assets or liabilities. You don’t want to compare apples and oranges and think you have a fair deal when you don’t! It’s good to have a trained and experienced expert help decipher the complicated technical aspects of your situation to ensure that your settlement is fair and will leave both parties financially sound.

No, I am not an attorney and I do not give legal advice. As a financial planner and advisor, I can work with you and your attorneys or mediators to help you plan for an optimal financial situation before, during, and after the divorce process, but my services do not equate to legal advice or the other legal functions of an attorney.

Once you schedule a meeting, I’ll send you a confirmation email with a list of documents to begin gathering. While no documents are required for the first meeting, it’s a good idea to start collecting them sooner rather than later as the Court will eventually require them. Most parties choose to bring as many of these documents as possible to the meeting, and this helps us be more efficient and productive. In the meeting, we’ll talk about each party’s concerns before beginning to look at the details of the marital estate and talk about children, if applicable.

Two things.

The first is the effect settlements can have on your taxes, including:

• Maintenance (alimony)
• Child support
• The division of retirement plans
• The transfer of marital property from one party to the other

 You’ll want to ensure you understand if an asset has already been taxed or will be taxed later, such as with many retirement accounts. It’s helpful to note that transferring assets due to divorce typically does not cause any tax implications. However, if you do it “wrong”(per IRS code) there can be giant tax implications. It’s important to understand the rules and how the transfer should happen.

The second major hurdle is financing or refinancing a home. Since 2008, the underwriting process has been much more difficult. The agreement the parties come to (and how it’s written) is critical to each party’s ability to individually secure a mortgage after the divorce is final. 

Quite frequently, the divorce agreement states that, for example, you will refinance your home in a certain period of time, but in reality you might be unable to get a mortgage. Then what do you do? I work with parties to ensure the greatest tax benefits are realized and that both know before signing the agreement if they will qualify for a new mortgage. I have mortgage resources to refer my clients to if they don’t have their own.

Having a financial professional prepare your documents saves you money in two main ways. First, my rate is lower than most attorneys. Second, since I am trained as an expert in finances, I understand these statements and documents in much more detail than most attorneys or paralegals. This saves you time while lowering the risk of costly mistakes as many legal professionals are not well versed in all the nuances of pension plans, various cash value life insurance policies, annuities, etc.

When it comes to spousal support (a.k.a. alimony or maintenance), you need to seek individual advice to determine how the specifics of your case may impact your receipt or payment of it. The court considers some of the following (however, no two cases are alike):

• Can you support yourself with earned income plus investment income?
• Ability to pay. Does the payer of alimony have sufficient funds to pay?
• Length of marriage. A long-term marriage (ten years or more) is typically a stronger case for the lower-earning spouse.
• Health of both parties. Is each party healthy enough to earn an income or pay ongoing medical bills?

Many of the cases initially filed in Colorado are pro se, meaning ‘without legal representation.’ Even though you can go through the whole process yourself, I would strongly recommend seeing an attorney for legal advice at least before signing any final paperwork. This is because much of what is agreed to may become set in stone and unable to be changed post-Decree.

I can provide guidance towards more affordable options for legal representation, such as using an attorney on an “unbundled” or “a la carte” basis. Having proper legal representation can save you headaches in the long run by helping you understand all the implications of your decisions and agreements. Remember: I do not provide legal advice, but I can help you approach the legal side from a financing perspective.

A CDFA is a professional who is specifically trained on divorce from a technical financial point of view. They work through the financial aspects of your divorce including income, expenses, assets, tax issues, pensions, and division of property to help you reach an equitable solution for both parties. They can also help you look at potential offers and project out to get a sense of what your finances may look like five to 10 years in the future.

Yes, financial advisors will work with your attorneys and mediators as part of your team. As the financial expert, I’ll help with the intricacies of tax law and other financial aspects of the divorce process.

A QDRO (Qualified Domestic Relations Order) is the legal document that divides up a qualified pension or retirement account (pension plans, PERA, 403b, 401a, 401k plans) pursuant to a divorce. The Separation Agreement and Decree are not sufficient to divide up a qualified plan, so a QDRO is needed. There are many nuances that need to be addressed for the QDRO.

On a related note, an IRA can be divided using the Separation Agreement, provided the language in the Separation Agreement is sufficient.

An IRA can only be titled in one party’s name; however, that does not mean it automatically goes to you. Pensions and retirement plans are marital assets. So, generally speaking, the portion you earned during your marriage will be subject to division. Depending on the state you live in, the portion that was earned before your marriage could also be considered a marital asset. However, it may be possible to keep your pension intact and have it offset with other assets. Due to the variety of laws and specific circumstances, the answer to this question can vary person-to-person.

This is another question without an answer that fits all cases. This answer is personal because it has to do with how much a house can end up costing you. It can depend on the potential financial burden of the house from costs associated with maintenance, taxes, and other upkeep.