Successfully Separating Finances in Divorce

When seeking information about divorce, the first question for many couples is, “Why is divorce so expensive?!” The reason is simple. Separating finances in divorce is a much like the complexity and delicacy needed for separating conjoined twins. Separating Finances in Divorce

Legally, a married couple is considered one entity. With a few exceptions, most assets and liabilities–no matter whose name is on them–are considered the property of both. Like separating conjoined twins, the goal is to create two separate, healthy, stable, well-functioning individuals. Just as the medical procedure takes great care and expertise, so does the legal procedure.

The cost only increases if couples engage in lengthy court battles to settle their divorce. Conciliation-Mediation offers an alternative.

Mediation offers opportunity for successful separation

In Conciliation-Mediation, the mediator:

  • gathers all the relevant financial information,
  • assists spouses in defining their individual financial needs and desires, and then
  • guides couples to consider how to use the financial resources they have gathered to meet their priorities.

Mediation gives couples the flexibility and space to personalize their choices and to create stable, post-divorce lives.

Yet, sometimes more is needed. While mediators offer education about options, the mediator cannot advise. And, some clients need specific advice to plan for their future.

Even more importantly, divorce focuses on the present. People also need to plan for the future. Yet, many clients don’t have the expertise to know how their assets will work long-term, thus they don’t know which assets will best fund their goals.

Experts to help along the way

A variety of experts can help couples understand options and plan for their future.

Financial Planner

Financial planners help clients define their financial goals (often focusing on important elements clients never considered), understand their assets, and project how those assets will perform in the present and in the future.

When working with a financial planner, clients should seek a person who both understands the financial goals and supports the cooperative process. Some financial planners take a more adversarial approach. Some even, unfortunately, stray into offering legal advice, which can create confusion and conflict for clients. Finding a financial planner who focuses on helping clients, rather than pitting them against each other, proves vital.

Certified Public Accountant

Fortunately, in divorce, the transfer of most assets between spouses creates no tax consequences. Spouses can take equity out of the house, transfer bank accounts, or receive child support without tax liability—because the property is joint and belongs to both.

However, some decisions do have tax consequences:

  • Which parent benefits most by claiming the child tax credit?
  • What is the cost of invading a 401(k) for immediate cash?
  • What is the effect of payment of a spousal interest in a business over time?


Clients do well to ask their CPA to review the proposed financial agreement and advise on all tax implications. This input helps clients make smarter decisions.

Certified Divorce Financial Analyst

Clients may want to look specifically for a Certified Divorce Financial Analyst (CDFA). CDFAs go through intensive training that combines financial planning with accounting. Consulting a CDFA gives clients both an understanding of the tax consequences of proposed settlements along with financial planning for using the assets they receive to create future stability.


Attorneys offer their client perspectives on what is available through the court and the likely outcomes from the court. These insights help clients understand the context in which they are making decisions and, often, motivate clients to work harder to successfully reach decisions in mediation.

For example, one couple came to mediation with $120,000 of equity in their home and $140,000 of debt. Debbie desperately wanted to keep the marital home to provide stability to their two, special-needs children. Joe agreed with this desire. Yet, the debt loomed large, and neither had the income to get ahead of the debt.

The financial problems that had destroyed their marriage also destroyed their trust. This made mediating an agreement more difficult. Debbie blamed Joe for the debt and expected him to just take the debt and leave her the house. Joe understood her desires, but couldn’t afford to do what she asked. Debbie sought an attorney to force Joe to do so.

Debbie’s attorney explained that, if the couple couldn’t agree, the judge likely would force the sale of the house. That input re-framed Debbie’s expectations and motivated her to engage more creatively with Joe. Because mediators cannot predict court outcomes, sometimes clients do well to gain perspective from an attorney who supports cooperative decision-making to specifically advise on likely outcomes. The attorney’s input helps clients gain perspective and engage in meaningful discussions.

Conciliation-Mediators offer both a process for reaching cooperative agreements and a wealth of information about options. More, mediators welcome whatever additional expertise is needed to create well-grounded decisions. Clients enjoy both the flexibility of personalized settlements and the security of sound decisions.

If you are considering divorce and are concerned about how to successfully separate your finances, we welcome your questions. Call 317-344-9740 or email We look forward to serving you.

Please note that this information is general and is not intended as legal advice. Anyone reading should consult a professional for information relating to your situation.

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Though we come from a variety of experiences and backgrounds, the team at The Resolution Center shares one common goal: to bring healing and hope to those going through turmoil. ‘We know conflict wreaks havoc and wrecks dreams. Each of us brings specialized skills and a proven process to move people through the conflict to a place of stability, peace, and the possibility for their future.

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