Financial Health Assessment - Separation / Divorce

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Financial Health Assessment for Couples who are separating.

Financial Health Assessment for Couples who are separating.

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  • 1. Divorce Survival FHQ Financial Health Self-Assessment a safe harbour for your family Call Toll Free (877) 932-8389
  • 2. Financial Health Check-up TAKE THIS SHORT QUIZ TO FIND OUT WHETHER YOU GET A CLEAN BILL OF FINANCIAL HEALTH OR IF YOU REQUIRE EMERGENCY CARE. 1) 2) 3) 4) 5) Do you have life insurance? a) yes b) no c) don't know d) through my spouse In terms of RESP, TFSA, RRSP you: a) maximize contributions every year b) make sure you contribute something every year c) seldom make contributions d) wonder what RESP,TFSA, RRSP are? When dealing with credit cards, you: a) payoff the full balance every month b) try to payoff the full balance, but at least make the minimum payment c) suspect you’re in trouble, but can't live without them d) don't have any credit cards Your approach to managing your finances could best be described as: a) my spouse always handled the money b) I balance my checkbook and put away a little money every month c) I have a monthly, yearly, and five year plan d) when I have money, I spend it all (and then some) Do you know where your money goes each month? a) yes - down to the penny b) yes - give or take $100 c) I think so, but I never seem to have as much as I thought I had. d) it just magically seems to disappear 8) Do you have an up-to-date inventory of your personal property? a) yes: down to the last set of drink coasters b) I know what's mine, but it isn't written down anywhere c) I haven't gotten around to it yet d) What do I need that for? 9) Do you have an up-to-date inventory of your marital property? a) yes: and it has all been valued b) I know what's mine, my spouse's, and what belongs to our family c) I haven't gotten around to it yet d) what is marital property? 10) Are you going to be shopping for a mortgage or home loan after your divorce is finalized? a) yes b) I think so c) I don't think so d) no 11) With regard to your tax returns, you: a) prepare them yourself and file on time every year b) review them with the person who prepared them c) trust the tax-preparation professional to get everything right d) have never filed a return 12) If disaster struck (your house was destroyed, you were disabled, or you lost your job), would your family be provided for? a) yes: I have insurance policies to cover all these b) maybe: I'm not sure what my insurcovers c) I would have to ask family and friends for help d) no: I don't like to think about bad things happening to me or my family ance 6) 7) How much of your income do you save and invest for short-and long-term goals? a) 25% b) 10% c) 5% d) Nothing: I live from paycheck to paycheck Are you saving for your children's college costs? a) yes: I'm right on track b) yes, but it isn't going to be enough c) no: they will have to pay their own way d) I don't have children Page 2 13) With regard to your marital home, you: a) know its current value, including how much is still owed on the mortgage b) know its current value, but not how much is still owed on the mortgage c) trust my spouse to give me my fair share d) are determined to keep it no matter what Offices through-out the Greater Toronto Area
  • 3. 14) Do you know the location and amounts of all of your investments; including savings, stocks and bonds, real estate, art, jewellery, and collections? a) yes b) I think so c) I'm not sure: my spouse took care of these sorts of things d) I have no idea 15) If either you or your spouse own a business, how much do you know about it? a) everything: I have a current valuation, including debts and assets b) quite a bit: I meet with the book keeper for quarterly updates c) very little: my spouse takes care of the business d) nothing How to Figure out your FHQ (Financial Health Quotient) • • • • For each "A" response, give yourself 3 points; For each "B" response, give yourself 2 points; For each "C", you'll earn 1 point; For each "D", you get 0 points except for #3 and #7, where "D" is worth 3 points. 1) Insurance: If you do not have appropriate insurance coverage, then you are putting your investment assets and retirement assets at risk. 2) Retirement: You might be tempted to use these assets to cover any cash shortages, but they should only be used as a last resort. If you need to dip into this money today, just imagine how much more you're going to need it after you've retired. A CDFA™ can help you analyze how much you will have for your retirement. 3) Marital Home: If you wish to keep your home, ask your CDFA™ to show you whether or not you can afford it. You might end up house rich, but have no cash to spend on basic necessities. 4) Debts and Mortgage: If you take the home, you will probably have to refinance your mortgage to obtain a mortgage that does not obligate your exposure. Can you qualify for a mortgage without your ex-spouse's income? 5) Cash Reserves/Savings: A portion of your assets must be liquid to cover budget emergencies. 6) College: This is important, but you may not be able to fund as much as you originally planned. How Financially Healthy are You? • 30-45 points: Congratulations! You seem to have things under control, and are planning for a secure financial future. • 15-30 points: Not bad, but you need to start taking better care of your financial health. Seek help in areas where you know you're weak: from tax planning to budgeting. • SOME ISSUES TO CONSIDER: 0-15 points: You need to seek professional advice yesterday! Your financial pro can show you where you are today, and where you'll be tomorrow - helping you to create goals as well as a realistic plan for achieving them. If you scored low on this quiz, then you must begin managing your cash flow immediately. You also need to set priorities and goals, and start to allocate your resources accordingly. Look at your spending patterns and see if they are in line with your priorities and goals; whenever possible, you should reduce the amount spent on low-priority items to make more funds available for your high priority goals. 7) Assets: You should know where all of your assets are located. Begin collecting financial information immediately. If you review your tax returns, you may find assets that you may forgotten about. 8) Taxes: Obtain copies of your tax returns for at least the past three (preferably five) years. Remember: spousal support is generally taxable to the recipient, and child support is not taxable. 9) Business: If you or your spouse own a business, gather as much information as possible about it including having a business valuation completed. If you do not run the business, you should consider filing a separate tax return. A CDFA™ can help you analyze the short-and long term impact of your divorce as well as the pros and cons of different settlement proposals, so ask your CDFA™ to explain the costs and benefits of a particular proposal before you sign it. Call Toll Free (877) 932-8389 Page 3
  • 4. Ken S. Maynard CDFA - Mediator - Senior Negotiator How I Help Separating/Divorcing Individuals and Couples The financial ramifications of a divorce can be devastating. However, with proper planning and expert help from professionals specializing in financially equitable divorce settlements, you can increase your chances of arriving at a settlement that fully addresses your long-term financial needs and your spouse’s too. What's missing in most divorce processes is financial expertise. As a Certified Divorce Financial Analyst™ (CDFA™) I can forecast the long-term effects of the settlement. By using a divorce financial specialist, both partners have a clearer view of their financial futures. Only then can they approach a settlement that fully addresses the financial needs and capabilities of each. I help clients determine the short-term and long-term financial impact of any proposed divorce settlement. I also provide valuable information on financial issues that are related to the divorce, such as tax consequences, dividing pension plans, continued health care coverage, stock option elections and much more. As a divorce financial specialist and trained family mediator I take a facilitative role with my mediation clients. More About Me I bring a wealth of personal and particle experience to my clients, with more than 25 years of experience as a senior business executive. Leading the Divorce the Smartway team, I am committed to guiding and facilitating couples through Divorce the Smartway’s Family Harbour™ mediation process. This unique step-by-step approach to divorce mediation is a new paradigm, delivering acceptable outcomes for all parties I feel my unparalleled financial, negotiation, business experience, family mediation training and CDFA designation, combined with our own innovative Family Harbour process, can help to save clients money, provide clarity to property division, accelerate timelines, reduce emotional chaos and empower each couple faced with separation/divorce. For mediation, we are right for you if: • You are both committed to moving through your divorce in a strategic, pragmatic, proactive way. • You have assets (complicated or not) you want to preserve and protect. • You want to minimize the impact on your children. • You are amicable or conflicted. • You can, on at least 1 or 2 occasions, sit in the same room with your spouse and myself as mediator. If you think Divorce the Smartway might be right for you, please call today. We will answer your additional questions, and schedule your free 1/2 hour telephone consultation. We have offices throughout the Greater Toronto Area. (877) 932-8389 Offices through-out the Greater Toronto Area Page 4