Alberta Divorce Finances – Financial Advisor in Calgary
If you are currently going through a divorce in Calgary, Alberta it’s likely that your personal finances are on your mind. While you may have taken the time to research a financial advisor in Calgary to assist you with your finances during this difficult time, there may be another option more suitable to your current needs – A certified divorce financial analyst.
What Services Does a Certified Divorce Financial Analyst Provide?
A Certified Divorce Financial Analyst (or, a CDFA) can help you navigate through all the financial aspects of your divorce such as division of financial assets and debt as well as associated tax consequences. A CDFA can help determine the long-term effects of your divorce, ensuring that your assets are divided in a fair manner to clarify your financial future. The other areas of expertise carried by a CDFA include:
- Spousal support and child support
- Property division; and
- Value of pensions and retirement funds
A CDFA will help you divide the assets in the case of a divorce, assets include property, retirement accounts and pensions, insurance policies and more. They will also calculate debt and other expenses and can help formulate a realistic plan for a future budget that matches your new financial situation and independence.
It’s worth noting that dividing all finances down the middle is not always the most equitable solution, a CDFA is also there to help spouses who are divorcing devise a plan that is fair to all the parties involved. Hiring a CDFA can help ensure that assets and liabilities are split in a way that is fair and considers all financial and tax implications, that is not necessarily something that a financial advisor in Calgary would be able to do.
Do I Need a Certified Financial Analyst?
If you are already working with a financial advisor in Calgary, they may be able to assist you with your future financial situation and how it will be affected by your divorce. A financial advisor has likely already worked out a lifestyle budget with you and can now adjust that budget to suit your new circumstances.
As a general rule, financial advisors are versed in planning for individuals and couples but not for people who are separating and divorcing. For this reason alone, it may be beneficial for you to work with a CDFA instead of your financial advisor.
If you and your spouse have significant assets or own a business together a CDFA can help you work through these complex financial issues before things get too confusing. However, if there aren’t any significant assets, debts or numerous real estate properties to deal with and you feel comfortable creating your own budget, you may be able to move forward on your own – Before you do, you and your spouse need to ask yourself the following questions:
- How will the marital property be divided?
- How will the marital property be valued?
- Where will your children live?
- Who will be responsible for the children’s expenses (dental, medical, educational, recreational)?
- How will the lower- earning spouse financially survive?
- Will the lower-earning spouse require financial support?
- How will retirement funds and pensions be divided?
- What are the tax implications of the divorce and how will it affect your income tax return?
Many people believe that their lawyers will be able to guide them through the above questions but this simply is not the case. Lawyers are experts in law but can struggle with complex financial details concerning CRA rulings, dividing pensions, investments and capital gains. In addition, it may be possible to finalize many elements of your divorce from your spouse using only a mediator and a CDFA. Divorces can be very expensive and if both parties are amicable and willing to work together, there are different avenues that can be taken besides just negotiating through pricey lawyers.
While a financial advisor can offer you advice related to finances such as where you should invest your money, a CDFA possesses unique analytical abilities related to your divorce such as the tax implications involved.
A Certified Divorce Financial Analyst, also known as a CDFA, is a skilled individual from a financial planning or legal background that has extensive training in the financial and tax aspects of divorce.
- Formal qualifications
- Problem-solving skills
- Analytical abilities; and
- Interpersonal skills
Yes, whether or not you have a financial advisor, a CDFA may work with them in turn to offer suggestions that will assist in your current situation (your divorce), your financial advisor can then help you plan for your future.
Similar to a lawyer, a CDFA typically charges an hourly rate and this rate can vary depending upon the skill and experience of the CDFA. However, a CDFA will be able to assist you with financial issues that your lawyer may not be educated on.