Developing an Analysis of Your Financial Needs During Your High Net Worth Divorce
Solving for Financial Peace with a Needs-Based Analysis
“Wealth after all is a relative thing since he that has little and wants less is richer than he that has much and wants more.”
Charles Caleb Colton
Anticipating a lower standard of living after divorce can be scary and stressful. But planning ahead can help you feel more comfortable and prepared for the future. Preparing a needs-based analysis with a certified divorce financial planner can help you determine how much money you really need based on your age, the age of your children, and anticipated future expenses. Seeing how much you really need can help you feel at peace moving forward.
For this series, I sat down with Michelle Smith, owner of Smith FSG in New York City. Ms. Smith is a Certified Divorce Financial Planner and often works with high net worth couples as a financial planner, offering guidance and expertise in investing, philanthropic giving, and strategies for asset transfers. She is one of the most sought-after divorce financial specialists in the country. Today Ms. Smith is offering her expertise on how to achieve peace during a high net worth divorce with a needs-based financial analysis.
As part of any divorce, you will be required to file financial affidavits. They go by many names, depending on the state. In New York it’s called a Statement of Net Worth. This financial affidavit will cover your assets and liabilities as well as your income and expenses. The court will use this document to help determine an equitable distribution of assets, as well as determine any spousal and child support. While completing these forms seems straightforward, it’s easy to fill them out incorrectly or to miss expenses and liabilities. A good solution is to hire a financial planner to help you complete your forms and to develop a needs-based analysis for you.
Certified divorce financial analysts focus on the long-term financial effects of divorce. Areas of expertise include alimony, dividing property, determining the future value of retirement and pension funds, and calculating any divorce payments. A financial analyst can help you develop a needs-based analysis by considering: (1) the day-to-day living expenses incurred during your marriage; (2) the spending habits of you and your husband; and (3) upcoming major expenses for your children.
As part of this analysis, your financial planner and the court will need to include:
- Your financial statements (including bank, credit card, and brokerage statements)
- Credit reports
- Personal and any business income tax returns
- Recurring and ordinary expenses (clothing, food, housing, education, travel, and entertainment)
- Unusual, non-recurring, or seasonal expenses
- Any discrepancies
Compiling and analyzing all of this financial information can seem like a daunting task, but it’s important to be as accurate as possible for your long-term financial stability. You don’t want to guess or underestimate your expenses. After a complete analysis of your financial needs is finished, you’ll have a much more accurate picture of your short and long-term financial needs. This should give you peace and make your high net worth divorce and financial negotiations less daunting.
If you’re considering a divorce but you’re looking for a different, more peaceful approach to the divorce process, contact my office for a free and confidential consultation.