Factors to Consider Before Accepting a Lump Sum In Your Divorce Settlement
Are you one of those couples who are in the most of your divorce settlement negotiations? If that is so, you should contemplate properly before angering to accept a lump sum as your settlement. In case the non-earning spouse is offered a lump sum in lieu of his or her divorce settlement. The money is needed to support that person’s future lifestyle. However, it often gets quite abstract.
If you are trying to ascertain whether the lump sum offered to you is adequate or not the most important factors to consider are:
- The plans for investment returns or the growth of that money, which is further dependent on various financial variables
- Cost of supporting that person’s future lifestyle subject to the evolving requirements and inflation
However, it is not an easy task to estimate the number of funds in today’s currency is required to fund his or her future lifestyle even when that person is financially savvy. It is also tough to determine how the future lifestyle of that person will look like on the basis of getting a lump sum as a divorce settlement today. If you are going through such uncertainties, time to engage a professional and reputable financial planner to help you out.
A good financial planner helps in assisting you with respect to a lump sum money offered during your divorce settlement
Contrary to several attorneys, an experienced financial planner who knows how to work on matrimonial issues is aware of how to look beyond these financial abstractions. They are equipped to interpret as well as communicate alternative situations the clients. When these planners accept these kinds of matrimonial engagements, their key tool is to come up with a cash flow projection for many years, which is generated on certain logical and reasonable assumptions.
It is difficult to anticipate future expenses and project the cash sources needed to fund such expenses are even tougher. Returns on your investments are dependent on the allocation of your portfolio asset. That, in turn, rely on factors like how much tolerant you are for taking investment task, the capability of replacing lost capital, your age and other economic resources available before you.
It may not be the right thing to do it alone. It makes sense to hire an experienced financial planner who is well aware of such an exercise with his or her other clients. The advisor should have in-depth knowledge of tax laws, should be intuitive, emotionally intelligent and is skilled in portfolio construction.
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