Smart Financial Planning for Divorce: Navigating Your Finances with Confidence

certified divorce financial analyst financial planning
woman is financial planning for her divorce

Are you wondering how to stay financially afloat while navigating a divorce? Look no further. In this guide to financial planning for divorce, we provide you with a roadmap that covers forming a support team, dividing assets fairly, and resetting your finances for a stable future. Discover actionable steps to ensure your financial resilience as you turn the page.

Key Takeaways

  • Assembling a skilled financial team during divorce, including financial advisors, family law attorneys, and Certified Divorce Financial Analysts, is crucial for navigating financial complexities and achieving favorable outcomes.

  • It is essential to collect and organize financial documents, assess assets and liabilities, and understand the financial impact of child support and alimony for informed decision-making and equitable settlements.

  • Post-divorce, updating estate plans and insurance policies is vital to reflect changes in personal circumstances, and creating a robust financial plan is key to managing budgets, setting goals, and ensuring financial stability.

Building Your Divorce Financial Team

Managing your finances during a divorce may appear complicated. However, having a strong team of financial experts on your side can simplify this process, aiding you in understanding complex financial decisions and legal procedures.

Your team should consist of a financial advisor, family law attorney, and potentially a Certified Divorce Financial Analyst – each playing a distinct role in managing financial matters and ensuring the best possible outcome for your financial future.

Financial Advisor with a Certified Divorce Financial Analyst Credential

A financial advisor, particularly one with a Certified Divorce Financial Analyst (CDFA) credential, is an invaluable member of your team, providing guidance on:

  • Asset retention

  • Advice on the tax implications associated with asset division

  • Organizing financial data

  • Developing a marital balance sheet

  • Collaborating with an estate planning attorney to ensure the best possible outcome for both parties.

In this context, financial advisors play a crucial role in managing your financial affairs, including working with a tax advisor when needed. Understanding potential tax implications, like income taxes, gift taxes related to property transfers, or the income tax consequences of asset transfers, is beneficial during negotiations.

A Certified Divorce Financial Analyst (CDFA) provides assistance to the client and their lawyer, helping them understand the financial implications of decisions made during the divorce. To attain the CDFA certification, individuals must successfully complete the course, pass the certification exam, and meet ongoing continuing education obligations. This specialized knowledge can be invaluable in navigating the financial complexities of a divorce.

Family Law Attorney

A divorce attorney is your legal compass during divorce proceedings, addressing legal matters and ensuring the court is well-informed to make decisions on these issues. The process of selecting a family law attorney necessitates careful consideration, as it is crucial to establish a trustworthy relationship with someone who can guide you towards the potential outcomes of your case.

They aid in negotiating settlements, crafting the settlement agreement, and preparing various documents like financial records, marriage and separation documents, along with prenuptial agreements.

Gathering Essential Financial Documents

Gather key financial documents to draw a road map of your financial life. This lays the groundwork for a comprehensive financial plan tailored to your specific situation. These documents include:

  • Bank statements

  • Investment accounts

  • Tax returns

  • Credit reports

should span 3-5 years to provide a detailed snapshot of your financial history.

Consolidating all relevant financial information before starting formal divorce proceedings can save time, lessen stress, and make the process more efficient.

Bank Statements and Investment Accounts

Bank statements and investment accounts form a comprehensive image of your financial status. They provide essential insights into your financial standing, acting as primary evidence and revealing detailed financial information. In the process of a divorce, these statements can be obtained through subpoenas issued by your legal representative to financial institutions, or they can be produced by both parties as part of Mandatory Disclosure.

Assessing various investment accounts during a divorce, including IRAs, pension plans, and brokerage accounts is necessary to accurately determine each party’s financial assets.

Tax Returns

Tax returns serve as a financial mirror, reflecting your income, deductions, and tax liabilities - all of which can significantly impact settlement negotiations. Tax deductions in a divorce proceeding hold significance as they can impact the reported income, deductions, and credits on individual tax returns.

Old tax returns can be accessed for use in divorce proceedings through several methods like requesting tax return transcripts online, contacting the IRS by phone, or submitting a request form to the IRS via mail.

Credit Reports

Credit reports function like financial x-rays, aiding in identifying outstanding debts and potential elements that could affect your financial future. They offer insights into joint accounts and debts, and can significantly impact your financial standing in the post-divorce phase.

Importantly, it’s worth noting that the process of getting a divorce does not have a direct impact on a person’s credit report.

Evaluating Assets and Liabilities

Assessing assets and liabilities forms an integral part of the divorce process, similar to balancing financial scales. It includes a detailed evaluation of retirement accounts, real estate, and debts to guarantee a fair division. Each type of asset or liability comes with its own set of considerations and implications.

Retirement Accounts

Retirement accounts are significant assets that require careful evaluation during a divorce. All types of retirement accounts, including IRA assets, 401(k) plan accounts, pensions, and other retirement savings plans, should be assessed during a divorce.

Transferring assets from these accounts may require a Qualified Domestic Relations Order (QDRO) to avoid tax penalties. The QDRO process involves:

  1. Gathering information

  2. Drafting the QDRO

  3. Obtaining approval from both spouses

  4. Getting it signed by a judge.

  5. Obtaining approval from the plan administrator

Real Estate

Real estate represents a significant portion of marital assets and its division may involve selling the property, one spouse buying out the other, or maintaining joint ownership. One spouse can facilitate the buyout of the other in a divorce settlement through full payment of the remaining balance and equity in cash or by leveraging the equity for the buyout process through mortgage refinancing.

The sale of property during a divorce follows standard home sale procedures, but also necessitates reaching an agreement on:

  • how the proceeds will be divided according to the terms of the divorce settlement

  • who will be responsible for any outstanding mortgage or liens on the property

  • how any capital gains taxes will be handled, if applicable

It’s important to note that capital gains taxes are generally not applicable to property transfers as part of a divorce settlement.


Debt division in a divorce should be equitable, considering factors such as income, earning potential, and responsibility for the debt. Debts accrued during the marriage, known as marital debts, are commonly divided equally in community property states. However, debts accrued separately remain the responsibility of the respective spouse.

Courts typically take into account factors such as each spouse’s economic situation, contribution to joint debts, and the division of assets acquired during the marriage when dividing debt in a divorce.

Navigating Child Support and Alimony

Child support and alimony can be a complex part of divorce financial planning. Understanding how these payments are calculated, ensuring accurate financial information is provided, and knowing the tax implications can help in navigating this aspect of the divorce process with confidence.

Let’s examine these two areas more closely.

Child Support

Child support represents a financial commitment from one parent to the other for the upbringing of their underage children. The child support amount is dictated by specific formulas that vary by state, considering the income of each parent, the time spent with the child, and any additional costs.

It’s important to note that the higher the number of overnights a parent spends with a child, the lower their child support payments may be. Additional expenses such as health costs, support for special needs, or private schooling are also considered in child support calculations.


Alimony, or spousal maintenance, is a payment made by one spouse to the other after a divorce. The calculation of alimony takes into account state laws and various factors such as the income, expenses, and financial circumstances of each spouse after asset division.

Alimony calculations are influenced by several factors, such as:

  • The spouses’ ability to support themselves

  • Their educational contributions

  • Income levels

  • The duration of the marriage

  • Any criminal activities

  • Financial needs

Updating Estate Plans and Insurance Policies

Once the divorce proceedings are over, it’s time to revise your estate plans and insurance policies. This step is significant to safeguard your assets and ensure your wishes are executed according to your current circumstances. This includes:

  • Reviewing and revising your will and trust

  • Making adjustments to roles of executor and trustee

  • Updating your insurance policies to reflect your new financial reality

Estate Plans

Updating your estate plan after a divorce is like updating your GPS for a new destination. It’s critical to:

  • Revise your will and trust

  • Eliminate any provisions for your former spouse

  • Make adjustments to the roles of executor and trustee

  • Update beneficiary designations for assets like life insurance and retirement accounts which do not pass through a will or trust.

Failing to update an estate plan after a divorce could render it invalid and ineffective, exposing your assets and intentions to potential legal complications.

Insurance Policies

Insurance policies, like life jackets, provide a safety net during turbulent times, including health insurance. After a divorce, these policies should be restructured to protect you from the financial ramifications of your ex-spouse’s death or disability. This involves:

  • Removing the former spouse as the beneficiary

  • Designating new beneficiaries

  • Ensuring that you have a new policy in your name, directed to your current address.

Also, keep in mind the importance of managing disability insurance and other shared policies after divorce to safeguard against the financial repercussions of the ex-spouse’s disability or inability to offer support.

Creating a Post-Divorce Financial Plan

Life after divorce may feel like walking a tightrope. But with meticulous planning and a clear understanding of your financial goals, you can navigate this phase with confidence. This involves budgeting, setting financial goals, and managing new expenses, all of which are crucial steps to ensure long-term financial stability.


Budgeting is the compass that keeps your financial journey on track. After a divorce, changes in income and expenses are inevitable. By itemizing all expenditures, prioritizing essential expenses, accounting for additional costs, and converting yearly expenses into a monthly figure, you can prepare a realistic budget that takes into account your new financial reality.

To adapt to a single-income household, it’s important to establish a new budget, reduce non-essential expenses, seek opportunities to boost income, and effectively handle any outstanding debts.

Setting Financial Goals

Setting financial goals post-divorce is important for:

  • Attaining financial stability

  • Fostering independence

  • Effectively managing budgets

  • Addressing debts

  • Reevaluating investment strategies

It’s also advisable to gain a comprehensive understanding of your total monthly income and expenses, and prioritize them by minimizing nonessential expenditures.

Managing New Expenses

Similar to how a ship’s captain prepares for unexpected storms, you should also be ready to handle new expenses that may arise after a divorce. This includes adjusting your budget and seeking professional financial advice as needed to handle new financial obligations such as child support or alimony payments.


Navigating the financial complexities of divorce can be challenging, but with the right guidance and planning, you can turn this challenging situation into an opportunity for financial growth and stability. Whether you’re building your divorce financial team, gathering essential financial documents, evaluating assets and liabilities, or updating your estate plans and insurance policies, you’re taking steps towards a secure and prosperous financial future.

Frequently Asked Questions

How do I prepare myself financially for divorce?

To prepare yourself financially for divorce: 1. Gather all financial documents and information, create a new budget, update old accounts, and open new ones. 2. Seek financial advice, take stock of assets, be frugal, track income and expenses, separate finances, and consult a certified divorce financial analyst.

How hard is divorce financially?

Divorce can have a significant financial impact, with divorced individuals needing a more than 30% increase in income, on average, to maintain their previous standard of living. In fact, after a divorce, a woman's household income drops by an average of 41%, almost twice the income drop experienced by men.

What is the role of a Certified Divorce Financial Analyst in a Divorce?

In a divorce process, a financial advisor with a Certified Divorce Financial Analyst (CDFA)credential plays a significant role. A financial advisor provides guidance on asset retention, offers advice on tax implications, organizes financial data, develops a marital balance sheet, and collaborates with an estate planning attorney to ensure the best outcome in a divorce. On the other hand, a CDFA helps clients and their lawyers understand the financial implications of decisions made during the divorce, providing valuable assistance in the process.

What financial documents are important to gather during a divorce?

During a divorce, it's important to gather financial documents such as bank statements, investment accounts, tax returns, and credit reports in order to have a comprehensive overview of your financial situation. This will help in a smooth and fair division of assets and liabilities.

About Intentional Divorce Solutions

At Intentional Divorce Solutions, we're committed to guiding individuals through the complexities of divorce with an approach centered on empowered choices and respectful outcomes. Our team provides comprehensive support and expertise in several key areas:

  • Divorce Financial Planning and Analysis: Providing in-depth financial insights and strategies for a secure future post-divorce.
  • Divorce Mediation: Facilitating respectful and balanced negotiations to reach mutually beneficial resolutions.
  • Divorce Coaching: Offering personalized support and guidance to help you navigate through emotional and practical challenges of divorce.
  • Divorce Support Groups: Creating a space for sharing experiences and finding strength in community support.

Please Note: We focus on providing support and solutions in various aspects of divorce. However, we are not attorneys and do not offer legal advice.

Work With Us

If you are on the journey of divorce and seeking professional, empathetic support, we are here to assist you. Reach out to us to discover how our services can be adapted to your unique needs, empowering you to make informed decisions for respectful and positive outcomes.

Contact Us | Learn More



Stay connected with news and updates!

Join our mailing list to receive the latest news and updates from our team.
Don't worry, your information will not be shared.


We hate SPAM. We will never sell your information, for any reason.