Should I Hire A Divorce Financial Planner

Just because most of my clients have not hired a divorce financial planner doesn't mean that you should or should not. Like most financial decisions it depends on many factors.

In some divorce cases the asset distribution is relatively simple and the incomes are modest, so a financial planner will more likely be able to guide a person in terms of their future budget for living expenses vs a case with many different kinds of assets, different ways of structuring child support and spousal support and of course tax planning.

The less that a client understands about asset values, which assets appreciate/depreciate, tax consequences both now and in the future, retirement planning, how to budget for current and future financial needs the more likely that client will benefit from the expertise of a divorce financial planner. A more sophisticated client may feel that they have enough information and knowledge to make these decisions without paying for additional advice.

I can tell you from personal experience that even after 40 years of practicing law and over 30 years dedicated to matrimonial matters, there are financial considerations that can still be learned even with sophisticated experience. Lawyers are not accountants and also do not project years into the future what a client's financial position may become. Most lawyers do not study tax laws and may not fully understand the rules about exemptions, child tax credits, phase outs, details of head of household rules, granting and denial of innocent spouse protection and other similar items.

Some clients will rely upon their divorce attorney's advice which is fine but most divorce lawyers will be focused more on making sure that the client receives their share of marital assets and pays or receives the proper amount of child support and/or spousal support. While there may be some informal tax guidance, most attorneys will suggest that the client at a minimum speak with their tax advisor/accountant before you sign a settlement agreement.

Is a client better off buying out or selling the family home? Perhaps it is more important to obtain or protect future retirement benefits whether you are the working spouse or the spouse without retirement benefits accumulating. There is no one size fits all answer to these questions but there are answers for each person based upon their needs, ages, age and number of children and the earning ability of the person about to be divorced. Finally, sometimes the personality of the soon to be former spouse needs to be factored in. Will that person cooperate now and in the future if the house is not sold now but at a later date?

As a bottom line, I would say that more information is always better than less and perhaps at least one consultation with a divorce financial planner can be helpful to find out what services and benefit they can provide. Then a consideration can be made as to the value and cost of the advice.