By Patrick Kilbane, Director of the Divorce Advisory Group
The first quarter of each new year is easily the equivalent of tax season for divorce attorneys.
In my experience, the busiest time for filing new divorce cases is right after the holidays. Generally, unhappy spouses will try to salvage one more holiday season before they begin the new year by filing for divorce.
Why? There could be any number of reasons, but two stand out. The first reason is they want to enjoy one more relatively peaceful holiday season with their kids and extended family and friends. The second reason is a couple married on December 31 may file their federal income tax return as married filing jointly.
Planning a New Your’s Divorce?
If you find yourself in this position, here are some important things to do to prepare for the eventual filing of your divorce case.
Find the right attorney
Having a consultation with an attorney does not mean you must file for divorce. A lawyer can give you an honest assessment of your case, what you should expect, and how you can prepare.
How do you find the right attorney? Talk to people in your area who have significant experience in the local legal community. An attorney with experience, a great reputation, and someone who concentrates their law practice in your community is an ideal choice. As a financial advisor who litigated family law cases as a divorce attorney for nearly a decade, I work to help my clients identify the best attorney for their cases.
Determine monthly expenses
What’s the best way to determine how much money you spend every month? Look at all your spending sources for at least 12 months, including cash withdrawals; credit card statements; checks which were written; Venmo, PayPal, or Zelle; Apple or Google Pay; auto-debits from checking accounts; and any other spending sources.
Once you analyze all your spending sources for 12 months, you’ll have a good idea of your monthly expenses. This analysis will help you determine what expenses you’ll still have following your divorce and help your lawyer determine whether you have an alimony case.
Know your net worth
To further assist the attorney you consult with, try to determine your approximate net worth. Make a list of any asset with any significant value that you and/or your spouse own. Do the same thing with any significant debt.
If you know, it is important to indicate how the assets and liabilities are titled. If you think you may have any assets or liabilities but are not sure, list those as well. Further, if you know the value of the asset and the balance of each liability, list those as well. If you are not sure of the value of an asset like a business interest, it is fine to list the value of those assets as “unknown.” Your lawyer will discuss the process of determining the value of those items with you.
Consider working with a Certified Divorce Financial Analyst
A Certified Divorce Financial Analyst (CDFA®) is a financial professional who has experience in financial planning, accounting, and/or law. They have completed an intensive training program with annual continuing education requirements to become skilled in analyzing and providing expertise related to the financial issues involved in a divorce case. A CDFA® translates the divorce outcome into real-world consequences for the client and may assist the client and lawyer in the following ways:
- Appears as an expert witness if the case should go to court, or in mediation or arbitration proceedings.
- Familiarity with tax issues that apply to divorce.
- Has background knowledge of the legal issues in divorce.
- Help clients identify their future financial goals.
- Develop a budget.
- Set retirement objectives.
- Determine how much risk they are willing/need to take with their investments.
- Determine the costs of their children’s education.
Beginning a divorce case can be extremely daunting and anxiety-inducing. However, I always tell my clients the only way to eat an elephant is one bite at a time. By following the steps outlined above, you will be well on your way to preparing for the beginning of your case.
Should you need help, please consider reaching out to us. We have helped guide hundreds of people through their divorce cases. We would be glad to discuss your options with you.
Patrick Kilbane, J.D., CDFA, is a partner and director of the Divorce Advisory Group, as well as general counsel and wealth advisor, for Ullmann Wealth Partners in Jacksonville Beach, Florida. Before joining Ullmann, he had a successful matrimonial and family law practice. He can be reached at [email protected].