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Financial Guidance

DRCC Provides the Financial Guidance You Need Before, During, and Post-Divorce

Using specially designed financial software and tax programs, our divorce financial specialists can accurately project various settlement scenarios for the divorcing couple. In this way, both parties have a clearer view of their financial futures and are in a much better position to reach an equitable settlement.

Let's look at an example: Ted offers the following division of assets.

Sue gets the house ($132,000 equity), half of the cash, and $86,000 of Ted's 401k. Ted will get the remaining $218,000 thus dividing the assets equally. Ted will pay $1,450 per month in alimony for 5 years and $550 per month in child support. Sue earns $24,000 a year and Ted earns $92,000 per year.

Sound fair? Here's the result of Ted's proposal:

ASSET
VALUE
SUE
TED
Marital Residence
$132,000
$132,000
$0
401k
$304,000
$86,000
$218,000
Cash
$80,000
$40,000
$40,000
Pension
Divide equally
 
 
TOTAL
$516,000
$258,000
$258,000
Division
 
50%
50%

 

networth1

This scenario shows that within 10 years, Sue's assets are gone (including the house) while Ted's net worth has increased.

Too often, what appears to be an equal property division at the time of divorce can eventually leave one of the parties in deep financial distress. To maintain even a modest lifestyle, the lower wage-earning spouse is frequently forced to spend savings and other assets just to survive.

Engaging a divorce financial planner will illustrate the financial and tax impact of various settlement scenarios.

networth2 

The revised graph above shows how increasing the spousal support for a longer period of time helps Sue while Ted is still able to increase his net worth.

The final result shown on a chart or graph can reveal financial consequences that might have otherwise been overlooked. Making informed financial decisions at the time of divorce allows both parties to have more control of their financial future.

Don't be fooled by equal numbers... look at the long-term effect of the proposal before agreeing to any settlement. Call Divorce Resource Centre to schedule a consultation. This could be the most important phone call you'll ever make!

The case study results are for illustrative purposes only and should not be deemed a representation of past or future results. The example does not represent any specific product, nor does it reflect other expenses that may be required. No representation is made as to the accurateness of the analysis.

 

 

Your Divorce Can Create Empowering Choices!