by Jessica C. Roth

NewsJuly 29, 20260 comments

WORKING WITH FINANCIAL PROFESSIONALS

You already know the importance of having an experienced and skilled family law attorney protect your rights in a divorce, and to make sure that your final settlement is a fair one. However, you may not be aware of the ways the expertise of other types of professionals, especially financial professionals, can be invaluable in this process.

Before a settlement can be reached regarding matters such as the distribution of assets, spousal maintenance, or child support, both parties must have a full understanding of their marital finances. The true financial standing of long-term marriages, or of marriages where one or both of the spouses has an interest in a closely held business or complicated investment strategies, can prove difficult to ascertain. Financial professionals, such as Certified Public Accountants, Certified Financial Planners, or Actuaries have the specialized knowledge to unravel and simplify matters so that your attorney can advise you properly and you can make truly informed decisions. A few of the services that can be offered by a financial professional include:

• Identifying all assets and debts and determining if they are marital (and that may be divided between the spouses) or separate (the property of only one spouse);
• Analyzing the value of your assets, especially those assets that have a value that might be difficult to determine, such as real estate and business interests;
• Analyzing your current lifestyle and spending patterns during your marriage to establish the marital standard of living;
• Creating a budget to maintain your current financial situationand make sure all of the bills are paid during the divorce;
• Projecting the anticipated financial needs of you and your spouse after the divorce is final;
• Projecting the anticipated financial needs of each of your minor children after the divorce is final;
• Determining whether there could be tax consequences involved with disposing of or dividing assets, and what those consequences might be (such as penalties for withdrawing money from retirement accounts);
• If your spouse is not entirely forthcoming with financial information, helping to locate any hidden assets and tracing funds that may have been moved between accounts;
• Preparing projections that can help to predict how you and your spouse will fare financially over the long term considering your cash flow, investments, retirement assets, etc.

You can hire a financial professional to work only with you and your attorney as your own consultant, and your spouse may do the same. However, you and your spouse can agree on a particular financial professional to serve as a neutral expert. The neutral expert will provide all information and all of their conclusions to both spouses. Obviously, the latter approach comes with the benefit of paying for the services of only one financial professional and it avoids the legal fees that are incurred when attorneys argue about whose expert is correct. Also, a New Mexico rule of evidence (Rule 11-706) lets courts appoint experts to advise it on matters that are outside of its expertise, such as complex business and financial issues. The fees for those experts are not paid by the court, but by the parties, meaning that you and your spouse would have to pay for another expert to help the court decide which of your separate experts is providing the most accurate information. If you can agree on a joint financial professional, it will be less likely that a court will appoint a “706 expert.”

While hiring a financial professional to work on your case may seem like an added expense in the short-term, their guidance and expertise can prove invaluable in the long run and can justify what it cost to hire them. For example, if assets or debts that were not considered during the divorce proceedings are discovered after the divorce is final, it may be necessary to return to court to address the issue, which will result in additional legal fees and additional time spent contesting the issue. Also, misunderstanding the tax implications of a settlement agreement could open the door to additional taxes owed, plus penalties and interest. The involvement of a financial professional in your case helps to minimize the likelihood of such a costly oversight.

All of the attorneys at ARWJ have many years of experience in family law and are formally trained in Collaborative Divorce, which requires the involvement of a financial professional. As such, all have worked extensively with financial professionals and are skilled in using their services to obtain the most favorable result at the lowest cost.