Lifetime Planning

Patricia Barrett CFP CDFA

832-858-0099

  • About Us
    • Getting Started
    • Summary of Divorce Services
    • Frequently Asked Questions About Divorce Financial Planning
    • Testimonials
  • Cooperative Mediation
    • Cooperative Divorce Mediation
    • How Texas Mediation Works
    • Divorce Mediation Articles
  • Divorce Financial Planning
    • Our Approach to Divorce Financial Planning
    • Community Property
    • Separate Property
    • Long Term Planning
    • Financial Planning Articles / Case Studies
  • Collaborative Divorce
    • Collaborative Divorce
    • How Collaborative Divorce Works
    • How We Help
    • Collaborative Divorce Articles
  • Events
  • Blog
  • Contact Us
You are here: Home / Blog / Your divorce may require the assistance of a financial expert

Your divorce may require the assistance of a financial expert

May 17, 2017 By Patricia Barrett

Given the complexities of today’s financial landscape, it may be in your best interest to consider securing specific expertise to help you sort out and evaluate the financial aspects of your divorce. One important thing to remember is that most family law attorneys, even when experienced in divorce, are not trained to address financially complicated divorce issues.

As a key participant in your divorce process, you will want to understand all financial aspects of your marital estate and have an informed voice in decisions made with regard to your settlement agreement. So, securing this expertise either from a Certified Divorce Financial Analyst or a Forensic CPA can be invaluable.

Based on my more than 14 years helping clients with their divorce finances, I recommend starting with a Certified Divorce Financial Analyst (CFDA) because they are specifically trained in divorce finances, and they are generally less expensive than a Forensic CPA. Forensic CPAs may be best suited to perform complex business evaluations and deep financial investigations. When evaluating the credentials of a Forensic CPA, make sure he or she also has experience with the divorce process and laws of divorce in your state. Here are a number of areas where CDFAs and CPAs can help you:

  1. Reviewing and excavating personal tax returns

Lots of financial information can be gleaned from income tax returns. Yet, to the untrained eye, important clues can easily be overlooked or missed in this treasure trove of information. Tax returns can shine light on:

  • Real Estate Holdings — residential, commercial and vacation properties
  • Trust accounts, including the distribution details
  • Over-payment of taxes (that can be withdrawn in the future or applied to future years)
  • Tax refunds due
  • Securities accounts
  • Bank accounts (online or otherwise)
  • Partnerships or business interests
  • Losses that can be claimed in future years
  1. Business Valuation

If a family-owned business is part of the marital estate, an experienced CPA who is a trained business valuator may be critical in determining the company’s value for the purposes of a divorce. Often, a family business is the couple’s most valuable asset. However, such businesses may not be large enough to merit the expense of a CPA’s fees, which can run from $30,000 and up. In addition, if the owner’s specific skills and training represent most of the value of the company, there is little to divide in terms of divorce assets. The value there is called “professional goodwill.”

  1. Financial Investigations

I sometimes help clients distinguish between separate and community property if accounts have been co-mingled over the years. This involves tracing of deposits and withdrawals that are typically found in account records and financial statements. Sometimes when couples are seeking divorce, one of the spouses will claim his or her earnings have decreased, affecting marital cash flow. A Forensic CPA or a trained CDFA  can be called in to review key financial documents, expenditures or other records in order to verify or counter such a claim.

  1. Retirement Plan Reviews

Both individual and company sponsored retirement plans should be carefully reviewed  in order to define an equitable division of these assets to the divorcing spouses. Many times, Forensic CPAs or CDFAs will discover retirement plans that were not previously disclosed. This is often the case for high level corporate executives today who may hold “excess” benefits plans. Over the past five years, the stock market has increased dramatically along with the complexity of associated retirement plans. Close scrutiny of this area and knowing what questions to ask and who to ask has the potential of turning up some surprises.

  1. Tax and financial advice in the settlement process

The vast majority of divorces today end in a negotiated settlement between the spouses. Consequently, courts are rarely involved. So, close scrutiny of tax and financial aspects of these cases by experts is extremely important. Each spouse must understand how the settlement will affect future cash flow, income tax ramifications, retirement fund considerations and related asset transfers, and other financial factors. Securing the expertise and guidance of one of these financial pros will likely impact your finances for the rest of your life and is often well worth the investment.

As a trained and experienced CFDA, I focus on helping individual going through divorce to secure an equitable division of the marital assets. I’ve found my training and experience  in finances and mediation are very helpful, but what is often most important to my clients is seeing how their settlement will work out for them 15-20 years from now. That is often a real eye-opener and a game changer.

Filed Under: Blog, Divorce Planning, Financial Planning Tagged With: certified divorce financial analyst, divorce finances, divorce financial planning, divorce settlement, Texas divorce

Contact Us

Call Patricia for a
Free Consultation
832-858-0099

From Our Blog

Divorce and employer bonuses

Divorce and employer bonuses

An often overlooked asset that should be legally divided in a divorce settlement is the company or employer bonus. Many attorneys forget to address the community nature of such bonuses. Even if they … [Read More...]

Lifetime Planning, LLC

Phone: 832-858-0099

  • Email
  • Facebook
  • LinkedIn

Areas Served:

Cities

The Woodlands
Alvin
Baytown
Clear Lake
Conroe
Cypress
Dayton
Downtown Houston
Fairfax
Fort Bend
Friendswood
Galveston
Hockley
Houston Heights
Humble
Jersey Village
Katy
Kemah
Kingwood
La Marque
League City
Magnolia
Memorial
Midtown
Missouri City
Montrose
Pasadena
Pearland
River Oaks
Shenandoah
Sienna Plantation
South Houston
Spring Valley
Spring
Sugar Land
Texas City
Tomball
Victoria
West University
Also serving all Texas cities working by email, phone, and fax.

Counties:

Harris
Montgomery
Liberty
Chambers
Galveston
Brazoria
Fort Bend
Waller

Disclaimer

Information provided in this website is not meant to be construed as legal advice and does not necessarily predict decisions that will eventually be made by a court of law. It is strongly recommended that you consult competent legal advice if your divorce includes children or property issues.

Copyright © 2023 Patricia Barrett CFP CDFA · All Rights Reserved

· · ·

Log in