Divorce is one of the largest disruptors to a family’s financial well-being. It is important to remember one thing: you are not alone in this process. Along with your legal representation, we help clients understand how assets may be divided, guide you through the tax consequences of any liquidation, and where to best source funds when dividing marital assets. Even when both parties clash, we can help you see the forest through the trees. We will assist you with:
Many Actions to Consider
- Qualified Domestic Relations Orders (QDRO)
- Marital Asset Analysis
- Marital Tax Analysis
- Post-Divorce Wealth Management Services
How We Help During the Divorce
Most of the financial decisions in a divorce are made during negotiations, often under pressure and on a deadline. We work alongside your attorney so that you understand what each proposal means for your finances before you agree to it.
Qualified Domestic Relations Orders. 401(k)s and pensions are divided with a QDRO. We work with your attorney and the plan administrator so the order follows the plan’s rules and the transfer is timed correctly. A mistake here, such as cashing out instead of transferring, can create taxes and penalties that cannot be reversed.
Marital asset analysis. Two assets with the same balance are rarely worth the same. A traditional 401(k) will be taxed when the money comes out, a brokerage account may carry built-in capital gains, and a house or business is hard to turn into cash. We show you the after-tax value of each asset so the division is fair in real terms.
Marital tax analysis. Your filing status, the tax treatment of support payments and the cost of selling assets can all change the outcome. Because our advisors prepare tax returns every year, we look at how a settlement will actually show up on your return.
Post-divorce wealth management. Once the agreement is signed, we help you build a plan for one household: a realistic budget, updated beneficiaries and estate documents, and an investment mix that fits your new timeline. For a fuller explanation, read our article on financial guidance through divorce in Connecticut.
Frequently Asked Questions
When should I talk to a financial advisor about my divorce?
As early as possible, ideally before settlement negotiations begin. Understanding the after-tax value of each asset and what you will need to live on helps you and your attorney negotiate with a clear picture.
Do you replace my divorce attorney?
No. We are not attorneys and do not give legal advice. We work with your attorney on the financial side: valuing assets, modeling taxes, dividing retirement accounts correctly and planning for life afterward.
What is a QDRO?
A Qualified Domestic Relations Order is a court order that divides a 401(k), pension or similar employer plan between spouses. A payment to a former spouse under a QDRO is not subject to the 10% early-withdrawal penalty, although it is still taxable. IRAs are divided differently, by a transfer made under the divorce decree.
Can you help after the divorce is final?
Yes. Many clients come to us afterward to rebuild: setting a budget on one income, updating beneficiaries and creating an investment plan for the next chapter. The same advisor stays with you throughout.
Read our full guide: Financial Guidance Through Divorce in Connecticut.
Divorce
These life events are never easy; let us help you see, and reach that light at the end of the tunnel.