Financial Awareness and Divorce

By Aviva Pinto On 02/11/2021

I have been approached by many matrimonial attorneys, therapists, and divorce coaches who ask me to help their clients with their finances before, during, and after their divorces. Many people getting divorced, both men and women, may be smart, accomplished, or at the top of their professions, yet were not the ones handling the finances in their marriage. 

Many of these clients don’t know what they spend, how much their mortgage is, what assets they have, how much debt they have, what is in their investment accounts, or what is in their pension and retirement accounts. They weren’t the ones paying the bills, so how should they know? They weren’t the ones doing the investments or meeting with the wealth manager, so how should they know? They only sign the tax return that is placed in front of them and haven’t really paid much attention to it or read it, so how should they know what’s in it? 

I speak to many clients who say they have no idea what they have and what they would get if they got divorced (or whether they can even afford to get divorced). They’re being told by their spouse that they won’t get maintenance (aka spousal support/alimony) or child support if they divorce. 

Not being totally financially literate should not be a source of embarrassment though, and it certainly shouldn’t stop you from getting out of an unhappy marriage. If you do decide to divorce, you need to arm yourself with information. 

What Are the Next Steps? 

First, meet with a matrimonial attorney so you can learn more about the process and understand all your options while going through the divorce. 

Then, meet with a Wealth Manager who is a Certified Divorce Financial Analyst (CDFA) for help figuring out what is yours, what is your spouse’s, what you own jointly, and what can be split. A CDFAwill understand different state rules and can work with your matrimonial attorney to determine the best outcome for your situation. 

If you didn’t initiate the divorce and are being told “I’ll take care of you and the kids”, you need to know specifics. How much will you need? A CDFAcan help look at what you spend now and what you will spend after the divorce. They will work with you on a budget and splitting the assets. They can also help you take into account who will keep the house, whether the house needs to be sold, how the retirement accounts, pensions, and stock options will be split, and equally as important, the tax ramifications of these decisions. 

How Can I Get Started? 

The best way to get started is by gathering all the documents you can - bank statements, credit card statements, social security statements, retirement plan statements, pension plan statements, and tax returns. If you use an accountant, reach out and get copies of the last three years of your tax returns. If you don’t, you can use IRS form 4506 to request a copy. List everything that you own (jewelry, artwork, wine collections, cars, insurance policies). If your spouse owns part of a business, you should also gather partnership agreements, business documents, assets, and appraisals. 

Sometimes clients tell me that they are literally stuck because they are drowning in paperwork. It can be very stressful. Without financial knowledge, it can be overwhelming. If that is the case, have your CDFAwork with you and take it step-by-step. They can help you organize the paperwork so that your matrimonial attorney will have everything they need to start the process and understand what the various outcomes might be.

Once these documents are gathered, your CDFAcan work with you to create a lifestyle analysis, a roadmap of where you are, where you are going, and how to get there. It will help spell out how you are living now as a married couple, what you will need to maintain that standard of living in the future, and if that is possible. Two households rather than one will have to be supported. Sometimes it is not possible to live the way you were living when it was just one household. Maybe you will need to refinance the mortgage. Maybe you can save on insurance policies. Maybe you will have to downsize. Maybe you will have to find ways to cut expenses or earn more money by rejoining the workforce if you are not currently working. A lifestyle analysis lays out the trade-offs of what can and cannot be accomplished. 


By following these steps and consulting a professional, you will not only be better able to stand up for yourself and get what you deserve in your divorce, but you will also come out of it more financially aware and confident in your abilities to move forward. Knowing what to expect and learning how to be financially aware will empower you and ultimately reduce some of the stress you feel about finances throughout this difficult process.

Wealthspire Advisors LLC is a registered investment adviser and subsidiary company of NFP Corp. 

Certified Divorce Financial Analyst (CDFA™) professionals must develop their theoretical and practical understanding and knowledge of the financial aspects of divorce by completing a comprehensive course of study approved by the Institute for Divorce Financial  Analysts. CDFA™ professionals must have two years minimum experience in a financial or legal capacity prior to earning the right to use the CDFA™ certification mark. 

This information should not be construed as a recommendation, offer to sell, or solicitation of an offer to buy a particular security or investment strategy. The commentary provided is for informational purposes only and should not be relied upon for accounting, legal,  or tax advice. While the information is deemed reliable, Wealthspire Advisors cannot guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with regard to the results to be obtained from its use. © 2021 Wealthspire Advisors

Tagged with: CDFA, financial, awareness, divorce, IRS

Blog Disclaimer: The opinions expressed within these blog posts are solely the author’s and do not reflect the opinions and beliefs of the Certitrek, IDFA or its affiliates.