Many people going through a divorce think they just need an attorney to split up their assets and debts, figure out support and draw up the paperwork.
The problem with this line of thinking is a divorce is most likely the biggest financial transaction of someone’s life and an attorney is not a financial professional.
A divorce has a bigger impact than buying a home does in the long run.
When you buy a house, you have a team of professionals to make sure the deal is done right. If you need to get rid of the house after the purchase, it’s fairly easy to sell it and move on.
When going through a divorce, you need just as many people surrounding you to make sure the deal is done right because when it’s all said and done, you can’t go back and change the deal.
Let’s go through what your home buying team looks like and how that compares to what your divorce team should look like.
How Divorce is like Buying a House
Your Home Buying Team
You will want a realtor to help you find the perfect home to fit your needs and to give you the inside scoop on the community. Your realtor is the backbone of your team. You trust that they are picking out the very best homes based on your needs for you. They are with you from start to finish and possibly many years later when buying a larger or smaller home.
Mortgage Lender / Banker
Most of us aren’t in a position to be buying a house without a little financial help from the bank in the form of a mortgage. Maybe your realtor refers you to a few lenders. That lender is going to figure out and let you know based on your assets, debts and income how much you can afford and the best type of mortgage for you.
An inspector should look at the house before the sale is confirmed to ensure the foundation is sound and living conditions are safe. You certainly wouldn’t want any surprises after you have bought the home. Not knowing whether the house is up to code can result in large unplanned costs.
Finally, you will need an attorney to draw up all the paperwork to ensure money goes to all the right places and the deal is legal.
This is your core home buying team. You will most likely need more professionals depending on your situation, but this just about covers your basis.
Your Divorce Team
An attorney is the most well-known professional for divorce, but they can’t do everything. They are excellent for drawing up documents and advocating for what you are legally entitled to. However, they aren’t licensed or certified to advise you on the long-lasting effects of splitting up property, retirement assets and businesses. Most attorneys will help you put together your Statement of Net Worth, tell you how to divide assets and debts and figure out calculations for spousal and child support.
They can certainly split up your finances, but they cannot educate you on investments, taxes and insurance along the way or what the effect of splitting everything up is going to have in 2, 5, and 10 years. Hourly rates range from $300 – $800/hour.
Certified Divorce Financial Analyst (CDFA)
Most people want to understand what is happening in the divorce process; especially with their money. There are many ways to split up assets and debts in a divorce, knowing what way is going to benefit you the most in the future will save tens of thousands of dollars, if not hundreds of thousands of dollars. This is what a certified divorce financial analyst does day in and day out. Most CDFA’s will complete your statement of net worth for you or with you and educate you along the way.
They will also propose how your assets and debts can be distributed so that nothing is overlooked, taxes are saved, penalties are avoided and what you are left with is in line with what your future needs are. As for child support and spousal support, they do those calculations as well; ensuring items aren’t forgotten like cash from a business that’s not reported. Hourly Rates range from $150-$400/hour.
Some couples use a mediator instead of attorneys to divorce. They are a neutral third-party who helps you come to an agreement on how to split up custody, support, etc. Many states do not have any requirements for someone to be a mediator so be sure to do your homework. Find one that is experienced and concentrates on divorce. Mediators are wonderful when it’s an amicable divorce. Be sure to still get some legal advice from an attorney and have them draw up the final documents for you.
Mental Health Therapist
Divorce is one of the most stressful, uneasy times of your life. It’s a good idea to talk with a professional so you can be the best possible mom, aunt, daughter, co-worker, and friend. Taking steps to be the best you during a divorce means the world when entering the next chapter of your life.
You may have more professionals, but this should be your core divorce team.
If you have a team for your house, have a team for your divorce.
Between splitting properties, bank accounts, retirement funds, debt and finding new living arrangements all while transitioning to just one income, a divorce is going to be the biggest financial change of your life. Make sure to have a team of professionals around you to help you. You deserve to have a financial advocate, an experienced mediator and/or legal counsel and a mental health counselor. Invest in yourself and your new future now so that you don’t have regrets or “surprises” once your divorce is complete.
By building a core divorce team just like you would when buying a house you will have peace of mind when you sign on that dotted line.