Divorce Financial Planning

Written by Jeff Grimes, CFP®

Reviewed by Subject Matter Experts

Updated on April 19, 2024

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What Is Divorce Financial Planning?

Divorce financial planning is the process of analyzing and addressing the financial issues that arise during a divorce.

It involves working with a financial planner or advisor to evaluate the financial implications of a divorce, including the division of assets and debts, spousal and child support, tax consequences, and other financial matters.

Divorce financial planning is not about getting what you deserve, it's about getting what you need to move forward financially secure.

Divorce financial planning may also involve developing a post-divorce budget, identifying sources of income and assets, and developing a long-term financial plan for the future.

Jeff Grimes Author MSN

The goal of divorce financial planning is to help individuals navigate the complex financial aspects of divorce and make informed decisions that support their financial well-being and long-term goals.

It can be particularly helpful for individuals with complex financial situations or high-net-worth couples, where the stakes of a divorce can be particularly high.

Preparing for Divorce Financial Planning

Key Steps for Divorce Financial Planning

Gathering Essential Documents

Before diving into the financial planning process, it is crucial to gather all relevant financial documents. These may include:

Understanding the Legal Process

An essential part of divorce financial planning is understanding the legal process and its potential financial consequences. Consider the following aspects:

  • Types of Divorce: contested, uncontested, collaborative, or mediated

  • Division of Assets and Debts: equitable distribution vs community property

  • Alimony and Child support: determining eligibility and payment amounts

  • Financial Consequences of Divorce: tax implications and credit impact

Establishing Financial Goals

Short-Term Goals

Setting short-term financial goals is critical for maintaining stability during and immediately after the divorce. These goals may include:

  • Maintaining Liquidity: ensuring access to cash for immediate needs

  • Paying off Immediate Debts: prioritizing high-interest or essential debts

Long-Term Goals

Long-term financial goals help guide your financial planning for the years following the divorce. These goals may include:

  • Retirement Planning: assessing and adjusting retirement savings strategies

  • Education Funding for Children: planning for college expenses

  • Homeownership: purchasing or maintaining a home post-divorce

Developing a Financial Strategy

Key Components in Developing a Financial Strategy

Creating a Post-divorce Budget

A post-divorce budget is essential for adapting to new financial circumstances. Consider the following:

  • Identifying New Sources of Income: employment, alimony, or child support

  • Adjusting Expenses: reducing or reallocating spending based on new circumstances

  • Reevaluating Financial Priorities: focusing on essential needs and goals

Asset Division

Asset division is a critical component of the divorce process. Consider the following factors:

Debt Management

Managing debts during and after a divorce is crucial for financial stability. Consider the following strategies:

  • Identifying Marital vs Separate Debts: understanding each party's responsibility

  • Prioritizing Debt Repayment: focusing on high-interest or essential debts

  • Establishing Credit Independence: separating joint accounts and building individual credit

Navigating Retirement and Insurance Considerations

Retirement Accounts

Addressing retirement accounts during divorce is essential to ensure future financial security. Consider the following:

  • QDROs and Division of Retirement Assets: understanding the legal process for dividing retirement accounts

  • Social Security Benefits: assessing eligibility for spousal benefits

Insurance Coverage

Insurance coverage is crucial for protecting against unforeseen events. Consider the following types of insurance Coverage:

Seeking Professional Advice

Financial Advisors and Divorce Financial Planners

Working with financial professionals can provide valuable guidance and support during the divorce financial planning process. Consider the following types of advisors:

  • Financial Advisors: professionals who can assist with overall financial planning and management

  • Divorce Financial Planners: specialists in addressing the unique financial challenges of divorce

Certified Divorce Financial Analyst (CDFA)

A Certified Divorce Financial Analyst (CDFA) is a financial professional with specialized training in divorce-related financial issues. They can provide invaluable assistance in navigating the complex financial aspects of divorce and help develop comprehensive financial strategies for the future.

Collaborating With Attorneys and Other Professionals

In addition to financial professionals, working closely with divorce attorneys and other experts can ensure a well-rounded approach to divorce financial planning. This collaboration can help protect your financial interests and secure a more favorable outcome.

Post-divorce Financial Planning

Adjusting to New Financial Circumstances

After the divorce is finalized, it is crucial to adapt to new financial circumstances and implement the strategies developed during the planning process. Continuously monitoring and adjusting your financial plan will help ensure long-term stability and success.

Revising Estate Plans and Beneficiary Designations

Post-divorce, it is essential to update your estate plan, including wills, trusts, and powers of attorney, to reflect your new circumstances. Additionally, review and update beneficiary designations on life insurance policies, retirement accounts, and other relevant financial products.

Continuously Monitor and Adjust Financial Goals and Strategies

As life changes, so do your financial needs and goals. Regularly reviewing and adjusting your financial plan can help you stay on track and achieve your objectives.


Divorce financial planning can be a challenging and emotional process, but it is crucial for achieving financial stability and success in the aftermath of a divorce.

To ensure the best possible outcome, individuals should work with financial professionals, attorneys, and other experts to gather essential documents, understand the legal process, establish financial goals, and develop a comprehensive financial strategy that addresses all relevant issues.

Key factors to consider during the divorce financial planning process include creating a post-divorce budget, dividing assets and debts, managing debt, addressing retirement and insurance considerations, and adjusting estate plans and beneficiary designations.

Ultimately, the goal of divorce financial planning is to help individuals navigate the complex financial aspects of divorce and make informed decisions that support their financial well-being and long-term goals.

By leveraging professional guidance and support and continuously monitoring and adjusting their financial plans, individuals can adapt to their new circumstances and achieve long-term financial stability and success.

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