Divorce is a difficult process to go through, especially when it comes to the financial aspect. Tune in for some important insight presented to you by Leisl L. Cording, CFP®, CDFA® (Certified Divorce Financial Analyst).
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Divorce is a difficult process to go through, especially when it comes to the financial aspect. Tune in for some important insight presented to you by Leisl L. Cording, CFP®, CDFA® (Certified Divorce Financial Analyst).
- Subscribe to the You and Your Money podcast
- Follow us on Facebook, Instagram, LinkedIn and YouTube
- See how we can help you create a tailored strategy to help you Plan Well, Invest Well and Live Well: whzwealth.com
Welcome to You and Your Money. Empowering you to reach your goals with tips to help you Plan Well, Invest Well and Live Well. I'm Jim Zahansky, principal managing partner and chief goal strategist at Weiss, Hale and Zahansky Strategic Wealth Advisors. Today's episode features Leisl Cording, senior vice president and financial advisor at Weiss, Hale and Zahansky Strategic Wealth Advisors. Let's dig in to today's topic. Now today's topic, divorce. It's a tough thing to go through and the financial aspect is certainly a major pain point in many situations. But I understand there's such a thing as a certified divorce financial analyst. In fact, you've recently earned that designation. Is this true? That's right, Gary, and I'm happy to be able to bring the additional knowledge to our clients because it is a difficult thing to go through already. And the complexities of the financial aspect add a whole nother layer of difficulty to that process. So earning this designation was really important to me and to our our team. And it's a critical skill set for really helping people with a path forward, you know, both before, during and after divorce and, and just for I mean, guiding clients through these types of turning life events is really something that's rewarding for all of us and something that we do as advisors. So you were you were already a certified financial planner and now you also hold the CDFA designation. What does a certified divorce financial analyst do exactly? Sure a CDFA professional is learning how to work with clients is related financial issues that will affect the rest of their lives. So some of these topics include differentiating between whether you've inherited some property during your marriage, personal property, marital property, valuing and dividing property up, dealing with issues related to retirement assets and pensions, so valuing a pension and in today's value, some and some tax law as well. And so it's helping to understand these issues and how it can impact now that individual's financial plan. So it's really a critical time to make sure that proper steps are taken. All right. There's quite a bit there, obviously, and any one of those topics would be a lot to deal with separately. Yeah. So I imagine dealing with multiple issues at once. Also some heavy lifting there. So what are some of the major things to think about from a financial standpoint if you're going through a divorce? Well, of course, there's everybody's situation is different. But at a very high level, there's really five major areas that we focus on, and that's dividing property, managing taxes, considering your debt, updating your budget. And then, of course, retirement planning as well. All right. So let's walk through this, each of them. What are some of the details one should know? Sure. So the first one I'll talk about is dividing property. And so the courts have adopted two different types of property division, community property and equity, property division. And so Connecticut, where we live, is an equitable property state. And in in that it means that equal or 50/50 distribution of assets doesn't necessarily mean that it's equitable. And just to give you an example of that, if you know you wouldn't be able to divide a home 50/50 if one spouse wants to keep it. So you may have to shift other assets around to sort of account for the desire of that one spouse to keep the family home. But it's also important for the divorcing individual to know that marital property they have and or what marital property they have, and then work with an advisor or a professional to really help them think through what would be best to keep for themselves. All right. What about managing taxes? Well, that's another thing that really changes quite a bit. And you'll probably need to update your filing status. And now you're either single or head of household. And so this actually may result in higher taxes. So it's always good to talk with an accountant on that topic as well. And then if you have kids who will claim the dependents, that's another important one. And then understanding cost basis of property and how it'll impact you after sale. And really considering the net value of those assets after you sell them. So for example, in an investment account you have capital gains and you're dividing that up. You have to make sure that that you're dividing that up evenly. And then also one other topic, alimony. It used to be tax deductible in pre 2019 divorces, but no longer is. So that's not anything we have to worry about. But these are some of the major topics. There's so many things to consider, but it's always best to work with an advisor. All right, let's keep digging here. How about debt and budgeting? Well, on the debt side, this is an important one just to know what kind of debt you have, when it should be paid off and who's responsible for paying that off. And just to give an example on that, if you have joint credit card debt and whoever is responsible for paying it off, make sure that they actually do, because it could impact your score if they do not pay that off. And then your credit limits will probably decrease after a divorce. Also, historically, if you don't have any credit history, you sort you have to sort of start building that. And then lastly, on the budget side, creating a new budget for yourself as soon as possible is really important. And then what about let's bring it back where we always start, retirement planning. So that's really important. So much changes. And one of the major changes is retirement. Of course, your picture will look different. You'll probably have different goals and if you have to divide up assets now, you have to figure out how to make up that that difference and how to really fund the rest of your retirement. So you can you can be on your own. So we just we talked about a lot of things, but something tells me that there's even more to talk about. So perhaps we could pick this up and continue at a later date. That brings us to the end of this episode. As always, thanks for listening to You and Your Money and find even more episodes, videos and other resources at our web site. whzwealth.com. Be sure to come back next week for more tips to help you live fearlessly and pursue your financial and life goals. Until then, live well. Weiss, Hale and Zahansky Strategic Wealth Advisors offer securities and advisory services through Commonwealth Financial Network member FINRA, SIPC, a registered investment advisor. Fixed insurance products and services offered through CES Insurance Agency. They practice at 697 Pomfret Street, Pomfret Center, Connecticut 06259 and can be reached at 860-928-2341. Weiss, Hale and Zahansky Strategic Wealth Advisors do not provide legal or tax advice. The tenured financial services team strives to support clients in achieving their financial life goals. For more information regarding wealth management and customized financial planning with Weiss, Hale and Zahansky Strategic Wealth Advisors, please visit. www,whzwealth.com.