The Importance of Expert Tax Advice in Divorce

Most people who get divorced do so without the benefit of a tax expert.  

They get tax information and/or advice from their divorce attorney.  However, as this Forbes article points out, divorce lawyers are not the best tax advisors.

In fact, most divorce lawyers go out of their way to disclaim any liability for tax advice in separation agreements and fee agreements.  

So, if you are getting a divorce, and you can’t rely on a divorce attorney for expert tax advice, what do you do? 

Collaborative attorneys figured this out a long time ago.  In a collaborative divorce case, expert tax advice comes from the financial neutral. 

The financial neutral provides unbiased neutral information and advice about tax issues that relate to divorce.  That way, both parties get the same information at the same time.  And, they are not getting in unnecessary conflicts due to differing tax advice from either their attorneys or their own individual tax advisors.  

And here’s the best part about financial neutrals in collaborative divorces:  A good piece of tax advice can save tens of thousands, if not more, for the couple.  One small piece of information can have a huge impact on the financial futures of both clients. 

On the other hand, the absence of that information can have a huge negative impact on both clients.  

Tax issues are another big reason to take advantage of the collaborative process and the financial neutrals that help clients in the process.

Testimonial from Collaborative Divorce

I have handled many collaborative divorce cases.  However, I have never gone through the process as a client.  So, it is difficult for me to fully explain to clients what the process will feel like for them.  

However, Haleh Modasser has been through the process recently.  So, her story is far more powerful than anything that I can tell others about the process.  

Paying for College and Retirement in Divorce

Many parents make paying the expenses of their children’s college education a big priority in their divorce.  These expenses include college tuition, room and board, meal plans, books, etc…Frequently these parents have become emotionally invested in ensuring that their kids don’t have to pay for college.  Obviously, we’d all like to see our kids graduate from college without school loans.  

Unfortunately, especially in today’s economic climate, many people cannot afford to fund their retirement and pay for their kids’ college expenses (if they are fortunate enough to have the resources to do either).  That can be a very hard reality to accept. 

One fact that I (and many experienced financial professionals) constantly remind clients is this:  Kids can borrow money for college; parents cannot borrow money for retirement. 

This means that parents going through a divorce should take a very hard look at whether paying for college will allow for a proper retirement fund.   

After all, most kids would rather pay for their own education than their parents’ retirement.