Divorce takes a financial toll on everyone.
By Paul T. Capuzziello (Rhode Island)
“Am I going to survive financially?”
As a Certified Divorce Financial Analyst™ (CDFA™), I get that question a lot from the individuals and couples I help navigate the divorce process. Whether in mediation, collaborative law or litigation, the question is the same.
It’s a perfectly reasonable thing to wonder about—we all know divorce can take a terrible financial toll on either party. But, as I was reminded at a recent conference, the real impact of a split often goes far beyond money.
The Family Matters Symposium (co-sponsored by The American Bar Association Section of Family Law and the University of Baltimore School of Law Center for Families, Children and the Courts), held June 24-25, shed light on the far-reaching implications divorce has on our society as a whole.
Consider, for example, divorce’s impact on workplace productivity. Between distractions caused by paperwork and meetings with attorneys—not to mention mental preoccupation throughout the process—divorce can take a major toll on workers’ output. And, as a stress-inducing event, it can be linked to health issues related to anxiety and depression.
The fallout doesn’t stop there. Divorces—particularly those that result in prolonged, contentious legal battles or significant emotional distress—can cause stress and anxiety in children involved. This, in turn, can lead to negative behavior in schools and elsewhere.
In the nutshell, we all pay some sort of price for divorce.
Redesigning the Process
Participants of the symposium came away with two basic missions: to work towards building a better and more consistent divorce process; and to develop a multi-disciplinary approach to handling cases.
CDFAs fit into the financial side of the divorce equation.
Many attorneys believe financial experts are needed only for large cases. But given the complexity of today’s financial landscape, CDFAs can provide useful expertise on issues that affect estates of every size, ranging from investment accounts, tax and estate planning, and pension plans.
I have seen many cases in which a seemingly “fair” settlement at the time of divorce resulted in unexpected financial hardship on one party by the very next year.
Financial experts can help manage a client’s expectations, value assets and expenses properly, and deliver a detailed analysis that shows both sides the clear implications of different settlement options. For the client, knowing the information has been evaluated properly can help reduce stress and the likelihood of a return to court for modifications. And for the professionals involved, effective collaboration increases the likelihood of referrals from satisfied clients.
In the end, a multi-disciplinary approach is the best way to be able to look your client in the eye and say, “You are going to be OK overall.”
Paul T. Capuzziello, CFP®, CRPC®, CLTC, CDFA™ is a Senior Financial Advisor with Capuzziello & Associates, a financial advisory practice of Ameriprise Financial Services, Inc. Paul’s practice focuses on planning for individuals and business owners in divorce planning, retirement planning, business planning, long-term care planning, estate planning strategies, and wealth management. Paul utilizes a thorough process that provides detailed analysis and recommendations tailored to each client.
Reprinted with Permission from The University of Baltimore School of Law Center for Families, Children, and the courts