By FPA member Lili Vasileff, CFP®, CDFA™
Last Updated: February 7, 2011
A divorce financial planner is the expert you want and need during divorce to make strategic recommendations in a cost efficient manner in any legal setting. A divorce financial planner wears many hats: advocate, expert, buffer, neutral and coach. You determine the scope of their engagement and it will depend on the complexity of your case and on the legal process you choose: mediation, collaborative or litigation.
You engage a divorce financial planner to organize and compile financial information for both you and your spouse to help develop and analyze specific outcomes. Your divorce financial planner will prepare financial reports and scenarios for dividing assets and liabilities as well as determining child support and alimony.
A divorce financial planner takes on the role of a third party neutral in the legal context of mediation, arbitration and collaborative divorce. Here, you agree that their role is clearly defined to:
- Provide you both with on-going financial education, guidance and analysis throughout the divorce process.
- Assist with the gathering, analysis and preparation of financial documentation of income, assets, debts and expenses.
You will be supported and guided by the divorce financial planner to identify issues, consequences and define your potential choices that promote mutually satisfactory and desired outcomes for your family. In the collaborative process, you have a team where each person focuses on their specialty, and combined, they work with both of you to attempt to formulate a holistic outcome, promoting the best interests for your whole family.
As a neutral, a divorce financial planner may not advocate, take sides, or testify for either spouse. However, the mediator or one spouse may perceive an imbalance of power or knowledge about financial issues that impedes the mediation process. In this circumstance, a divorce financial planner can be brought in to work with the more vulnerable spouse to level the “playing field” with the consent of both you and your spouse. With this added effort, you receive all the appropriate information, education and “hand holding” support you need to move forward to make financial decisions with greater confidence.
Financial Advocate and Expert:
You engage a divorce financial planner who advocates for you and provides financial expertise during the divorce process. You or your attorney feels it important to bring into the process a financial expert to perform specific tasks that supplement your attorney’s legal efforts. It is usually best to engage a divorce financial planner as early as possible in the process to build your team and often, you will find that the initial scope of tasks expands for the divorce financial planner over time based on necessity and new case developments.
Depending on the scope and nature of tasks, you may choose to work directly with a divorce financial planner, apart from your meetings with your attorney, to help you better understand the legal process and the financial decisions you need to make. You may need a little more one-on-one time to be educated and coached by the divorce financial planner to help you move forward confidently with your transition to a single life.
The tasks of a divorce financial planner may include, but are not limited to:
- Fact finding and investigation (discovery)
- Analysis of lifestyle
- Preparation of financial reports
- Financial valuations
- Expert testimony
- Post divorce carryover
In the traditional context of a litigated divorce, you or your attorney may hire the divorce financial planner to serve your best interests. You rely on the expertise of your divorce financial planner to work to achieve solutions unique to your case that result in attainable and practical best outcomes. A divorce financial planner will collaborate closely with your attorney as well as with all other professionals to address comprehensively financial issues and risks. You will receive specific tailored recommendations, as a result of your divorce financial planner engaging often in strategy, negotiations and depositions. And, when you bring in a divorce financial planner, they are the only financial professional who is forward looking: to help you create new budgets and financial goals; perform projections; and provide carryover post divorce to help you implement the terms of your agreement.
As a financial expert, your attorney will hire a divorce financial planner to provide unbiased, objective financial opinion on a particular financial topic in court. The divorce financial planner must go through the rigorous process of qualifying as an expert in the eyes of the law and court; and, he/she must testify about area of competence and respect strict rules for proper testimony. Your divorce financial planner may be deposed by the opposing side when disclosed as an expert witness or fact witness in the case.
Generally speaking, a divorce financial planner may testify on these topics which have been recognized to date by courts in various states:
- Lifestyle analysis
- Longevity of assets
Overall, a divorce financial planner can help you in any legal setting by providing you with financial expertise and advocacy to help you make the right decisions in divorce. You will benefit from the added value they bring to the process so you can move forward with confidence.
FPA member Lili Vasileff, CFP®, CDFA™, is the President of the Association of Divorce Financial Planners, the largest national not for profit organization of divorce financial planners and allied divorce professionals, and President of her own private practice called Divorce and Money Matters, LLC. She is a nationally recognized expert in financial planning for divorce as a practitioner, writer, author and speaker. She supports divorcing clients in mediation, collaborative divorce and litigation. Starting more than 17 years ago, Lili was a pioneer in this field arising from her own experience as a divorced mother of two children and based on her passion to promote financial justice in the divorce process.