By: Jason Crowley, CFA, CFP, CDFA
Divorce is never easy. In fact, it can be downright overwhelming. It’s a time of unprecedented change that can take a financial and emotional toll. That’s why you need a team of specialists to help you navigate this difficult process.
Here’s an overview of the key professionals you should consider when assembling your divorce dream team:
Family Law Attorney
At its core, divorce is a legal process. You need a competent attorney to help you navigate the procedural requirements, negotiate on your behalf, advise on legal issues, and, if push comes to shove, represent you in court. It goes without saying that choosing the right attorney is a critical decision.
Look for an attorney who practices family law exclusively and find out how long they’ve been practicing. The biggest red flag in a potential attorney is someone who practices in all areas of law. Remember the saying, “jack of all trades, master of none?” Well, that certainly holds true. An easy way to identify a family law specialist is to look for an attorney that’s a member of the American Academy of Matrimonial Attorneys (AAML) or certified specialist by the State bar.
Some attorneys are litigators, while others focus primarily on alternative dispute resolution (mediation, collaborative practice). You need to decide what divorce process (litigation, mediation, collaborative) is right for you. Then, be sure to select an attorney that has experience with that process. You don’t want a hardcore litigator to represent you in an amicable mediation (trust me, I’ve seen a “shark” blow up negotiations before they even get off the ground time and time again). Ask what percentage of their cases are litigation, mediation, and collaborative.
It’s also a good idea to retain an attorney who practices in your county and knows the judges. Most attorneys charge for travel time, so it keeps costs down if your attorney’s office is in close proximity to the court.
Lastly, look for a good personality fit. You don’t need to be best friends with your attorney, but you want to work with a straight shooter that you like and trust.
Divorce Financial Advisor
Many people mistakenly believe that their attorney can handle all aspects of their case, including financial and tax implications. And for simple, low asset divorces, this may be true. However, if you have a degree of complexity to your finances, you will highly benefit from working with a divorce financial advisor. Your divorce financial advisor can offer creative ideas, evaluate settlement proposals, and help you understand the long-term impact of your decisions.
At a minimum, look for a Certified Divorce Financial Analyst (CDFA). Bonus points if the financial professional is also a Certified Financial Planner (CFP). A CDFA has specialized training in the financial and tax aspects of divorce, while a CFP has broad expertise across all facets of financial planning.
Of course, these credentials are just a starting point. Ask what percentage of their practice is dedicated to divorce (I recommend a minimum of 25%) and how many cases they had in the last year. It’s critical that your divorce financial advisor is well versed in your state’s divorce laws, and there’s no substitute for experience. This is one of many reasons why I don’t recommend working with your regular financial advisor. You run the risk of receiving misguided advice that can undermine your settlement negotiations and jeopardize your financial future.
Therapist
It’s been said that divorce is the second most stressful life event (behind only the death of a spouse or child). Now more than ever, you need a strong emotional support system. This can include family, close friends, and a therapist. A good therapist can help you manage emotions, cope with stress, and develop strategies for communicating with your spouse. Some Marriage and Family Therapists (MFTs) even work with couples to develop a parenting plan that’s in the best interest of the children. Working with a therapist can ease the emotional turmoil of divorce, foster a continuing co-parenting relationship with your spouse, and help you move forward on a solid footing.
Divorce Mortgage Advisor
If you own a house or are considering buying a new house, then you need a divorce mortgage advisor. Your divorce financial advisor should be able to put you in touch with a Certified Divorce Lending Professional (CDLP). Unlike most mortgage professionals, an experienced divorce mortgage advisor will have an in-depth understanding of the divorce process as well as divorce-specific underwriting guidelines. By performing a detailed underwriting analysis, a divorce mortgage advisor can offer guidance on how the mortgage fits into your settlement strategy. For instance, if you want to keep the house, it’s important to determine whether you qualify to refinance (taking spousal and child support obligations into consideration). To assess whether your mortgage professional specializes in divorce, I suggest asking the following questions:
- How many divorce mortgages have you handled in your career? In the last year?
- Do you have relationships with “divorce-friendly” lenders? (Hint: Divorce-friendly lenders may have more lenient guidelines related to support history or including additional “bonus” support.)
Forensic Accountant
By combing through financial records, a forensic accountant can determine a spouse’s true income, uncover hidden assets, and trace separate property to determine the characterization of various assets. Some forensic accountants are also business valuation experts and can assess the valuation of any privately held business interests.
Since forensic accountants often provide expert witness testimony, it’s important that your attorney and forensic accountant have a close working relationship. Their analysis will play a vital role in informing your attorney’s litigation/settlement strategy.
No matter how indestructible you think you are, divorce can infiltrate every aspect of your life and propel you head first into what feels like an alternate reality moving at warp speed. And while it can seem excessive to enlist a team of professionals, the simple fact is there’s too much at stake to go it alone. Keep in mind that having a solid team can pay off immeasurably by helping you secure a favorable settlement and emerge from the divorce process unscathed.
Jason Crowley, CFA, CFP, CDFA is the managing partner of Divorce Capital Planning, co-founder of Divorce Mortgage Advisors, and a leading authority on divorce finance.
This article is for informational purposes only, and does not constitute legal, tax, or financial advice. Be sure to consult with your advisors before taking any action.