A CDFA® professional can help minimize the financial impact of divorce.

By Robert Harty, CDFA®
Senior Vice President
Wealth Management Financial Professional
HilltopSecurities

Divorce can be painful in a number of ways. Not only is divorce an emotional and complicated transition, untangling the intricacies of combined finances can complicate the separation process and potentially inflict lasting damage to your finances.

Even if you’ve kept your finances separate from the start of your marriage, certain laws and divorce negotiations can still have unfavorable effects on your finances. A Certified Divorce Financial Analyst® professional, or CDFA® professional, can help you arrive at a fair settlement agreement—one that supports the short- and long-term financial needs of you, your spouse, and your family.

As you decide how to handle your divorce, the following are five ways a CDFA® professional can help keep your financial life on track during and well after the settlement process:

1. Save Time
   Despite popular notions about how long the divorce process lasts, the average time a divorce takes in the U.S. is one year and can require quite a bit of your attention during the settlement period. Because understanding the financial elements of a divorce settlement process can take many hours of experience, a CDFA® professional can expedite the process and answer your financial questions as you navigate the waters of divorce—including the questions you may not know to ask.During the divorce, your CDFA® professional will work alongside your divorce attorney. This allows your attorney to manage the pertinent legal matters and your CDFA® professional to focus on optimizing your financial outcome, leaving you to focus on what matters.
2. Save Money
   Heavily opposed settlements often require a great deal of back-and-forth between attorneys, which can become confusing, prolong the divorce process, and result in higher attorney fees. In 2019, legal self-help provider,Nolo, reported that the average divorce with contested issues costed $10,600 when settled and $20,400 when the case went to trial. A CDFA® professional can guide you through the complicated financial decisions at each step so you can effectively and efficiently part ways with your spouse without overleveraging yourself.
3. Avoid Future Financial Impacts
   While legal fees during your divorce will reduce your wealth in the short run, the decisions you make during the settlement process will impact your own cash flow for years to come. A CDFA® professional will conduct a financial analysis that considers your current wealth and projected lifetime expenses, tax liabilities, and benefits to help ensure your proposal reflects your long-range income needs.Ideally, a couple’s wealth is split evenly during a divorce. However, dividing and trading certain shared assets based on their current value may not always result in an equitable settlement. For example, without the guidance of a CDFA® professional, someone might find years later that the house they claimed during their divorce was not as valuable as they’d believed because of the housing market.
4. Budget Wisely
   Your budget and financial plan may look very different after divorce. Separating households can increase your daily living expenses, causing your short- and long-term budget to shift, including your retirement plans. Additionally, the majority of women become the primary caregivers and principal financial contributors for their children after a divorce, which can impact their ability to earn an income and save. To help minimize financial post-divorce issues, your CDFA® professional can help you develop a detailed budget and help ensure your everyday expenses and insurance needs are covered.
5. Minimize Future Regret
   The divorce process is difficult and often filled with financial challenges that can come as a shock. This is especially true as many people don’t realize the financial impact their divorce will have on their lifestyle. And considering that financial matters are reported as the top cause of stress across all generations, having a CDFA® professional on your side to guide you through the financial complications of divorce can help you avoid regret and help protect your financial future.

A Partnership for Your Financial Life
A CDFA® professional can give you the guidance you need during a divorce, so you can lead a fruitful and stable financial life afterward. To learn more, find a financial professional near you or call 214.953.4000.

Schedule a call with Rob Harty, CDFA®.

This information should not be utilized as a substitute for legal, accounting, or professional advice. If legal advice or other expert assistance is required, the services of a qualified professional must be sought. Even though Certified Divorce Financial Analyst® professionals are aware of the law, they do not practice law and do not give legal advice. The information may not apply to your unique situation. This information does not take the place of a lawyer, accountant, financial planner, therapist, etc.; for professional advice, you must seek counsel from the appropriate professional.

Rob Harty, CDFA®, is a Financial Advisor with Hilltop Securities Inc. (HTS) and may act as a Financial Advisor outside of his CDFA® obligations. HTS makes no claim that the use of this communication will assure a successful outcome.

HTS is a registered broker-dealer, registered investment adviser and municipal advisor firm that does not provide tax or legal advice. This document is not an offer or a solicitation of an offer to buy or sell any investment or other specific product or service.HTS is a wholly owned subsidiary of Hilltop Holdings, Inc. (NYSE: HTH) located at 1201 Elm Street, Suite 3500, Dallas, Texas 75270. Member: NYSE/FINRA/SIPC.