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Divorce Finances are a specialty niche at Jenco Financial Services. Jennifer Ray Bertheussen is one of only
ten in the state of Minnesota that has the dual certification as Certified Financial Planner® and Certified Divorce Financial
Analyst™.
Top Five Reasons for Hiring a Certified Divorce Financial Analyst™
During the Divorce Process1) Financial analysis
conducted early in the divorce process can save time.The average length of the U.S. divorce
process is one year. In the beginning stages of the process, both parties spend a great deal of time trying to get a clear
understanding of the financial aspects and terminology of the separation. A Certified Divorce Financial Analyst™ (CDFA™)
can explain all financial aspects of the pending decisions and help to empower their client to make educated decisions throughout
the proceedings. 2) A CDFA™ can help their client save money during the divorce process.By
using a CDFA™, you can have a clearer view of your financial future. Only then can you approach a legal settlement that
fully addresses your financial needs and capabilities. A legal settlement that floats back and forth between attorneys, without
the client having a clear understanding of all financial ramifications, can be detrimental, time consuming and expensive.
CDFA™s can educate their clients by providing a thorough knowledge and understanding of the often-complicated financial
decisions. 3) A CDFA™ can help his/her clients to avoid long-term financial pitfalls
related to divorce agreements.Working with a client and their attorney, a CDFA™
can forecast the long-term effects of the divorce settlement. This includes details of all tax liabilities and benefits. Developing
a long-term forecast for their financial situation is far better than a short-term snapshot. Financial decisions must be made
that not only take care of immediate family needs, but retirement needs as well. 4) CDFA™s
can assist their clients with developing detailed household budgets to help avoid post-divorce financial struggles.A
CDFA™ can help clients think through what the divorce will really cost in the long run and develop a realistic monthly
budget during the financial analysis process. Expenses such as life insurance, health insurance and cost of living increases
must be taken into consideration when agreeing on a final financial settlement. 5) Using
a CDFA™ can reduce the amount of apprehension and misunderstanding about the divorce process.Misinformation
and misconceptions about the divorce process can be detrimental. Many have false expectations that they will be able to secure
a divorce settlement allowing them to continue with their accustomed style of living. Financial divorce analysis helps to
ensure a good, stable economic future and prevent long-term regret with financial decisions made during the divorce process.
How a CDFA™ helped one coupleJohn and Jane are 40 years old and have two children. They own a home
worth $165,000 with net equity of $77,500. Their IRAs and 401(k) retirement plan total $165,500 in value. John earns $90,000
a year and has take-home pay of $68,760 a year. Jane has never worked outside the home and has no job skills, but she hopes
to get a part time job for $8 an hour with take-home pay of $8,900 a year. The following settlement has been suggested.
After the divorce, Jane and the children will live in the house, which will be deeded to her. She will also receive $44,000
of the retirement moneys and John $121,500, thus dividing the assets equally. John will pay Jane alimony of $600 per month
for 5 years and child support of $225 per month per child. He will also pay college costs which start in 4 years. John's expenses
include his normal living expenses, child support, alimony and college costs. Jane's expenses include support of the children
and are reduced when each child leaves home. This appears to be a reasonably fair settlement. However, an analysis shows Jane's
assets will be completely depleted within seven years while John's investments will grow dramatically. To improve Jane's financial future, the settlement could provide her with increased alimony of $1,500 per month
for 10 years. This would actually cost John $1,005 per month in after-tax dollars. The correct child support according to
the Child Support Guidelines is $1,125 per month for two children for a couple with their income. Jane also could be awarded
an additional $24,300 from the retirement plans. She also may need to cut her expenses by 10%. These changes in the original
settlement will still allow John to have a surplus which he can add to his investments. If John stays within his budget
and invests all of his extra income, his investments have the capacity to grow to $2.5 million by the time he is age 60. This sample case illustrates the value of financial planning as a means of reaching
more equitable divorce settlements. If the court's intent is to treat both parties in a divorce as equitably as possible,
it is essential to analyze the marriage as if it were a financial contract, with tangible investment into it by both parties.
Money issues are the number one cause for divorce, and also
the main argument during the divorce. You need to be protected against the financial impact after the divorce is
final. We help you determine where you are as a couple and where you need to be as a divorcee. Clients who
are in the midst of the process often wish they contacted a financial divorce specialist as one of their first steps
in their divorce. Don't make that same mistake.
At
Jenco we inventory, catalog, define and value all assets of the couple. It is extremely important this is
done right. Whether it is high net-worth divorces or a couple with debt, it is important to look at all assets and liabilities
with a fine tooth comb. We work closely with your attorney to calculate proposed settlement/alimony options.
We also are an integral part of the Do-It-Yourself divorcees. We define pre-marital property, 401k valuations and division
of retirement assets. Attorneys understand the law, we understand your finances and how they will impact your
future.
In a complicated and emotional divorce sometimes a team effort
is necessary. The following community of professionals I work with may need to be involved: Attorneys, Psychologists,
CPA's, Business Valuation Specialists, or Mediators. One or all can be part of the shared goal- representing you
through your divorce so you can make the most of the rest of your life.
At Jenco you
will be provided with cash flow analysis for the next 20 years- with graphs that are easy for the attorney, judge (and most
importantly) you to understand the financial impact of your divorce.
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