Divorce Asset Protection Strategies to Protect Your Investment Portfolio

Divorce Asset Protection Strategies to Protect Your Investment Portfolio

Divorce is a difficult time for everyone involved. However, having a well-thought out divorce asset protection strategy to address the division of assets can make this transition much easier on both parties involved. 

There are many things you can do before and during the divorce process to properly protect your assets during this tumultuous time. Time may be one of the most important factors: the longer that a pre-existing asset protection strategy has been in place, the greater its potential effectiveness when you need it. 

This article answers the following questions:

  • The importance of collaborating with a financial advisor 
  • Consider hiring a Certified Divorce Financial Analyst (CDFA)
  • Do you need a Forensic Accountant? 
  • How can you protect your assets during a divorce?
  • Could an advisor help you safeguard your wealth?
  • Is it a good idea to keep records of your purchases while married?

Enlist the Help of a Financial Advisor 

Divorce is a very difficult time. You can find yourself dealing with the loss of your spouse and the breakdown of your family. It can be an emotionally wrenching time. Nevertheless, you still need to make sure that you take care of your finances.

Never underestimate the potential for costly mistakes when you have to go through a divorce. We believe one of the best financial plans of action is to partner with a fiduciary financial advisor before you start divorce proceedings. 

Your financial planner can assist in developing a specific plan that has the potential to protect your assets from being dissipated by unnecessary disputes and court battles. Your advisor can also develop a financial plan that takes into consideration any tax implications that might arise from the sale of various assets in the settlement. As an example, if your assets are split “pre-tax” that could result in an uneven division of assets based on the income levels of each spouse. 

Because not every asset you own with your spouse has the same value, you’ll want to coordinate with your financial planner to develop a plan tailored to your specific needs and situation. 

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Consider Working With a Certified Divorce Financial Analyst (CDFA)

Depending upon the complexities of your situation, it may be prudent to hire a Certified Divorce Financial Analyst (CDFA). They assist couples and their attorneys pursue equitable settlements using their knowledge of asset distribution, short and long-term financial planning, and tax laws. 

Here are some of the skill sets and advice services that a CDFA can provide:

  • Analyzing current debts and assets
  • Valuing the cost of a primary residence and/or other real property
  • Suggested alimony amount and duration
  • Tax strategies associated with asset sales and alimony 
  • Creating a budget for post-divorce life

When You Might Need a Forensic Accountant

Many high-net-worth or ultra-high-net-worth individuals rely on a forensic accountant when they are going through divorce proceedings. In order to protect yourself from lawsuits, it is important to know how much money is at stake in any given case against you. Your accountant can help you determine the real value of your assets and liabilities.

When you use a forensic accountant, they can help identify important information that can facilitate the divorce process. They can help in uncovering hidden assets, along with full financial transparency of all assets and debt liabilities, both personal as well as business, if appropriate. 

Additionally, they can provide income and asset valuations to start developing a plan for suggested child support income, along with many other valuable services for individuals who have accumulated a substantial amount of assets. 

Income Protection

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At ViaWealth, we believe that the assistance of a fiduciary financial advisor can be invaluable through this process—and beyond. Our independent financial professionals are trained to help you understand your options and then make optimal decisions based on your values.

Contact us today to schedule an investment portfolio review. Our comprehensive financial services include estate planning and diversification into alternative asset classes, as well. 

ViaWealth, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.

More about the author: Lance Larson

Lance is the Managing Member and Founder of ViaWealth LLC.

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