Divorce is one of the threats for spouses as it can demolish their financial situation. In addition to the financial situation, a divorce can also affect the budget and retirement plan of the divorcing parties. Moreover, every person who goes through a divorce has a different financial position. Some of the people who go through a divorce are not even employed and rely on their spouses for support. Further, some have all assets in their own names. Contrarily, some carry a large personal debt. Accounting for lawyers who practice family law is also a need they can fulfill while working with highly reliable accountants.
Nowadays, the divorcing parties have a greater need for financial advice in contrast to the past. Spouses with a unique financial position need financial advice, in particular. Furthermore, divorce lawyers also have to regularly work with professionals, such as accountants, to achieve the best outcome for their clients. There are various ways accounting can do the best for lawyers to help their clients accomplish the best outcome. We are going to discuss them with you in this post.
How Can Accounting Do Good for Family Lawyers & Their Clients?
Here are different ways how accounting can do well for family lawyers while they work with a credible accountant, like one from GTA Accounting:
Create an Inventory:
One of the mandatory things to help a separating spouse is to create an inventory of things. It is important to create an inventory of assets, debts, incomes, and expenses together. In Ontario, it entails the completion of a sworn Financial Statement that Form 13.1 represents. Each spouse has to complete this form; nevertheless, it is a complex, long, and baffling form for spouses to complete. For the same reason, divorce lawyers have to work with a financial advisor, such as a Chartered Professional Accountant.
Working with an accountant or a financial advisor aids in collecting all income, tax, and financial records of spouses to complete Form 13.1. Further, high net worth families usually hold assets as investments, trusts, corporations, and partnerships. At times, they hold them in the name of other people. To ensure accounting for all assets and debts, divorce lawyers can rely on accountants and financial advisors. It will help them identify each account, credit card, and asset for the financial statement. An experienced accountant and a financial advisor can help clients collect, comprehend, and organize the information for swearing their financial statements. It is also a first step toward a less stressful divorce and finally a positive outcome for clients.
Develop an Individualized Financial Plan:
It is also important for lawyers to create an individualized financial plan before making their clients come to settlement terms. It also creates a roadmap for the future financial health of clients. Creating a financial plan in advance can also help lawyers answer the possible questions of clients, such as:
Q1. Will I be financially well in the future?
Q2. When can I possibly retire?
Q3. Will I have sufficient money to buy a home, travel, or plan my daughter’s wedding?
When divorce lawyers and accountants work together, they can help clients understand the income and assets they will get after the date of a divorce. Thus, accounting for lawyers can also do good for them and their clients when they have an individualized financial plan.
The Right Advice from the Expert:
Income tax, disposition costs, brokerage fees, and registered investments entail complications. They involve many hidden costs plus considerations at the time of the division of assets. However, several possible distribution alternatives may exist. A family lawyer can work with an accountant to assess different asset splits, and look at the needs of spouses while focusing on tax minimization. After the division of assets and debts, the attention should turn to things such as budgeting, liquidity, retirement, portfolio rebalancing, and accomplishing financial freedom post-divorce. Expert advice from an accountant who can serve as a financial advisor can help family lawyers in this regard.
Considering the financial complexities of divorce, the divorce lawyer, accountant, and financial advisor should work together early in the process. Working together, they can comprehend the investment assets, financial position, budget, and future income of clients. It is especially a requirement for family lawyers when they have clients with a high net worth. Working with an accountant makes a divorce process less challenging for clients and empowering simultaneously.
Divorce is a threat for spouses as it can possibly ruin their financial position. Moreover, family lawyers also need to rely on accountants and financial advisors to help their clients accomplish the best outcome. Moreover, accounting for lawyers can do well for them and their clients in several ways, which we have mentioned below:
- Inventory Creation
- Development of an Individualized Financial Plan
- Getting the Right Advice from the Expert
To finish, family lawyers have to rely on accountants to help spouses successfully settle their financial matters with a divorce.