Everyone worries about how their future will look after their divorce.  Your worst fear might be that you will be living in a cardboard box, and this article will tell you how and why that won’t happen.

One way to be sure that all financial information is disclosed and understood is to be in a process where there is a neutral Certified Divorce Financial Analyst such as mediation or the Collaborative Process. 

This may sound counter intuitive, but to get a comprehensive understanding of your family’s financial situation, a neutral financial professional (NFP) rather than attorneys may be the one to provide the most clarity.  The NFP gathers, reviews, and presents all the financial and tax information in a way understandable to both of you.  The documents gathered include tax returns; bank account, brokerage account, retirement account, credit card, mortgage, auto loan, and school loan statements; credit reports; pension documents; life insurance policies; and business documents and related tax returns.  The reports and Schedules of Assets and Debts and Income and Expense Declarations provided by the NFP are so complete and detailed that negotiations are easier as all the information needed to make agreements is available.  This allows the less financially knowledgeable spouse to feel ready and comfortable making agreements.

The NFP educates both spouses so that they are on a level playing field when it is time to make agreements about dividing assets and debts and sharing income.  They provide the reality of the finances in a way that both spouses can understand.

If you and your spouse cannot agree on a Certified Divorce Financial Analyst (CDFA), go to one yourself.  The CDFA will ask you to bring as much financial information/documents as you can locate to the meeting and then walk you through each topic to give you a broad base of understanding including related tax consequences.  Educating yourself can allay the mistrust, fear, and anxiety that can accompany decision making.  Then you can make solid agreements and not have misgivings.

Judith F. Sterling, CDFA, CPA is a financial professional with appointments available in Marin County, San Francisco, and Santa Rosa or by video conferencing. More information in her bio on the “Find A Professional” page.