What Is a Lifestyle Analysis? By Vickie AdamsDivorce is a time of uncertainty in many areas. In most marriages, it is not unusual for one spouse to have a more “hands-on” role or a better understanding of the household finances. If you were responsible for other duties and less focused on finance, it is critical to ask yourself, “Do I really understand and can I accurately convey my complete financial picture?

If the answer is “no,” there is no need to panic or feel guilty. A ‘divorce financial advisor’ can help you level the playing field by completing a Lifestyle Analysis.

What Is a Lifestyle Analysis?

A Lifestyle Analysis establishes what your standard of living was during your marriage. It’s a meticulous compilation of your daily living expenses, monthly spending habits, annual budgets, as well as income and outflow of funds by partners during the marriage. It serves as an opportunity to catch any red flags, too.

Some documents reviewed include:

  • Tax returns
  • Bank account documents
  • Brokerage statements
  • Credit card statements
  • Current credit reports

A Lifestyle Analysis not only serves as documentation of your existing standard of living, but suggests how you hope to live post divorce.

It’s unrealistic to believe that the same assets, which in the past provided support for one household, will now provide the identical standard of living for two separate entities. This is why spending time with a divorce financial analyst to explore every asset can go a long way in helping you achieve the best financial outcome.

I will review anecdotal information to help identify your spending habits as a couple. Day-to-day living expenses as well as seasonal, non-recurring events are revisited. With my help, you’ll recall, and maybe even discover, a lot of expenses that you hadn’t considered, such as the dog groomer or random child care expenses.

Although we want to believe that everyone has been fair and above-board in their activities during the marriage and their subsequent disclosures during the divorce, this is not always the case. Often the spouse that hasn’t been primarily responsible for handling the finances will be surprised to find out there may be irregularities.

A ‘divorce financial advisor’ has the experience and skills to identify spending patterns that identify hidden income; or one-time expenditures that signify dissipation of marital assets or frequently overlooked assets.

  • Hidden income: If someone is spending more than he/she is making, it is a clue that there is hidden income or unreported income somewhere.
  • Dissipation of marital assets: If someone is using community funds for extramarital activities such as vacations with their girlfriend or funneling money outside of the marriage.
  • Overlooked assets such as:
    • Frequent flier points
    • Vacation pay
    • Pensions from previous jobs or deferred comp
    • Collectibles and valuable hobbies

You need expertise in crafting your best settlement, and in crafting your financial future post divorce.

If you are unable to compile the information necessary to fill out your financial affidavit, your lawyer might have someone in the office who can help you reconstruct your financial situation such as a paralegal or junior associate. While they can complete the necessary documents required for the divorce process, they are unlikely to be an expert at strategic financial planning. These complex projections are the necessary cornerstones to ensure that your settlement will provide a secure financial future that takes into consideration all of your assets as well as your current lifestyle.

I am here to help you better understand and document your financial standing. A Lifestyle Analysis is an essential tool for the negotiations to demonstrate your standard of living and obtain the best settlement possible.

Contact me today to start planning your life after divorce at 310-514-0240.

Vickie Adams Divorce Financial PlannerVickie Adams, CFP®, CDFA