by Cathy Daigle, CFP, CDFA
Certified Divorce Financial Analyst – www.cathydaigle.com
What would Dorothy do?
Divorce, taxes, and COVID-19 are all highly sensitive, emotionally driven topics often contributing to heightened levels of fear, if not managed.
Simple techniques to calm, educate, and develop next steps help to make a difference in navigating one’s way during and after COVID-19, Divorce and/or Taxes.
Wash Your Hands of the unknown by diving in to gain knowledge and understanding. Use the soap and water of accurate information and wise advice to help minimize fear and gain clarity. Reach out and ask for help. Talk about it, learn about resources, and if/how to take steps
Many of us have good habits and do this anyway. It’s when under abnormal stress that emotions run away, creating fear-based thinking, often stopping us in our tracks, preventing us from moving forward. Divorce and Taxes are stressful enough. With the additional stress of the pandemic, now is the time to wash your hands.
Gain Knowledge and Understanding:
The first step is to gather information. Knowledge helps to reduce fear
- identify resources and options available to assist with divorce and/or tax by visiting professional websites including NoCourt.org, CollaborativeDivorceCalifornia.com, and CathyDaigle.com
- attend a free Divorce Options workshop to learn about divorce process choices in your state; addresses financial, parenting, and legal topics (individuals and couples welcome)
- think about hopes, concerns, interests and goals for you and your family
- get a sense of your financial pie: income, expenses, assets, debts, tax returns
- reach out and ask for help
Develop Steps:
Identify which divorce process choice is best for your family; communicate and work together with your spouse and/or a divorce professional. Understanding pros and cons, value-added services, and your responsibilities for each process choice will be key in making your best selection. The question of ‘how’ you will divorce, which process you choose, may be the single most important decision you will make in your divorce. The Divorce Options workshop (above) proves to be an invaluable resource providing the kind of information needed.
Certified Divorce Financial Analyst professionals (CDFAs) help to sort through the financial pie and give specific financial guidance and knowledge to your family. A roadmap of action items is developed and includes looking at the affordability of keeping the family home and if/how to share income, among other topics.
Stay Abreast of Taxes:
Once again, it is tax season and you may be waiting for final documents before filing your Income Tax returns for 2019. It is important that each spouse review and sign the return prior to filing. Ask questions as necessary.
Income tax law relating to divorce has recently changed with a most noteworthy change relating to taxation of spousal support (alimony). Going forward for new agreements, spousal support is no longer an income tax deduction for the payor nor is it considered to be taxable income to the recipient.
Minimizing taxes when possible and keeping the most cash flow within the family proves to be challenging in today’s economy. CDFA professionals work directly with you and your attorneys to explore financial options, run numbers in advance, and help you to make more informed financial decisions.
Staying calm in the midst of confusion has proven to increase decision-making ability. Explore how gathering information, education, and talking about it can help provide clarity and create space to move forward. Many say that CDFAs bring a sense of calming amidst the storm. Dorothy ran into the tornedo and asked the wrong people for advice. You can be wiser.