Tailored Tax Advice for Women with Nancy Goldfarb
What kind of tax aspects do you need to think about when going through a divorce? Today we have Nancy Goldfarb, President of Smart Transition Strategies and a certified financial planner, public accountant, and divorce financial analyst. On this episode, she breaks down what you need to consider to help you make good decisions about your finances during and after the divorce.
When to reach out to a CDFA or a CPA:
The best time to reach out to a Certified Divorce Financial Analyst or a Certified Public Accountant is as early as possible, even if you’re only just thinking of divorce. Educating and empowering yourself is incredibly important. You want to be able to face your financial challenges, and a CDFA or a CPA can help you develop strategies to enable you to achieve your goals and strengthen your financial security.
Lifestyle analysis and marital property:
It’s important to go back through one, three, and in some cases, five years of expenses, as well as three years of tax returns, to make sure you receive an equitable and fair distribution of assets in the home. Nancy talks about the importance of having a professional go through the process with you, as they can spot and dissect things the general public might not be able to so things are divided equally. For example: How do you divide low cost basis stocks? And what if the property is in only one of your names?
Tailored advice:
Women need advice tailored to them. Consider these factors: women live longer in general, we are the first generation of women who have had careers, women are more likely to take time off from the workforce, and statistically, we have likely learned less than men. This transition is a chance to seek financial education, and that is empowering. This allows you to have the knowledge to make decisions for your future.
The marital home:
The first decision is planning on how to divide or sell the marital residence. There are many options: selling the house and splitting the proceeds, trading off other property, a partial buyout, or even more out-of-the-box solutions, like delaying the sale until the children graduate, or keeping the house and taking turns living there and nesting.
The next thing to think about is reviewing the financial aspects of each option. There have been recent tax changes, and a CDFA or a CPA would look at your income and prior tax returns to help you make a decision. They’ll also make sure you don’t get any tax surprises, and will help you plan to have enough deductions to decrease your taxes.
The children:
Financial professionals are going to look at your children’s expenses as well. How much do you need to save for your children’s college education? Should you commence a 529 plan? How can you manage it so you can afford your child’s current private school education?
Social security:
Nancy likes to combine social security and retirement planning. There are many factors to think about, for example: Did one spouse stay home to raise the children while the other spouse was working and has built up social security? How long have you been married? Consult your local social security office or specialist for more details, as the rules are changing all the time.
Resources:
Nancy Goldfarb (LinkedIn) | Smart Transition Strategies