Certified Divorce Financial Analysts™ (CDFA) have a unique and effective “tool” to help individuals understand the potential financial impact that a settlement offer can have on their future finances. If used properly, introducing charts and graphics into settlement discussions can focus all parties on the bigger picture, separate fact from fiction, and make it easier for each spouse to understand the goals and concerns of the other.
“Now I understand”
The two graphs above show how each spouse will fare under different settlement scenarios. For this discussion, seeing the individual numbers are not important; the graphs simply tell the story that under the first scenario, the financially-dependent spouse’s net worth will rapidly decline three years after the divorce. That story dramatically changes in the second graph. How can this happen? The Divorce Financial Planner is trained to observe and present the bottom line of settlement offers and develop alternatives that can make the settlement more equitable. These graphs visually answer the following questions:
- Will I be financially ok after the divorce?
- Will I run out of money?
- Will I be able to retire?
- What will happen when alimony stops?
- Will I have to re-enter the workforce?
Illustrations v. Words
In most divorce cases, there are questions regarding what the total marital property consists of. Couples with long-term marriages may have had inheritances, changed jobs and moved retirement funds, started retirement plans prior to the marriage, or earned pensions pre or post-marriage. The illustration below has been used to help each spouse understand the ownership and earned interest in a pension plan.
For visual learners, this graphic will make much more sense than a reading of the legal statute regarding the division of Marital Property.
Tax Filing Issues
Couples going through the divorce process during this time of the year consistently have the question of how they are going to file their tax return. Since they are still married, they can file Jointly, Married Filing Separate, or possibly the Holy Grail of filing status, Head of Household. Faggio Financial has developed a flow chart that helps individuals understand exactly how they can file.
Faggio Financial LLC is Central Maryland’s only exclusive divorce financial planning practice. Every day, all of our work is done exclusively in the divorce arena. We do not “manage money” or offer our services as a stepping stone to an eventual Advisor-Investment relationship.
We help divorcing individuals make well-informed financial decisions and assist divorce professionals through every stage of the divorce process, predominantly providing services in Howard, Baltimore, Anne Arundel, and Montgomery Counties.
John Faggio is a CPA, CFP®, and a Certified Divorce Financial Analyst™. He is a trained mediator, and has had extensive experience as the Financial Neutral in Collaborative Divorce cases. Faggio Financial provides comprehensive divorce financial analysis and planning, pension valuation, and forensic services.
Email or call John today at 410-988-7333 for an initial, flat-fee consultation or a quote to provide the services that can put you on the right path to a positive outcome in your divorce.