THE VALUE THAT A CERTIFIED DIVORCE FINANCIAL ANALYST (CDFA™) CAN BRING TO THE TABLE
Once a marriage has broken down and a decision is made by one or both parties to divorce, the impact can be devastating. Devastating not only to the individuals involved, but also to the children, family, friends and employers of the divorcing couple. Divorce not only has a traumatic emotional impact, but a financial impact as well.
Because of the financial complexity of many divorces, an increasing number of financial professionals like myself are being asked to play an active role helping lawyers help their clients obtain an equitable financial settlement.
Most financial planners and accountants excel in their chosen field, but they have little or no training specifically related to the financial issues of divorce. A Certified Divorce Financial Analyst (CDFA™) has a financial planning, accounting or legal background and goes through an intensive training program to become skilled at analyzing and providing expertise on the financial issues of divorce. A CDFA’s role is to make sure clients and their lawyers fully understand how the financial decisions they make today will impact their financial future.
HOW CAN A CDFA HELP?
A CDFA works with clients individually or as couples, helping them come to grips with the financial reality of their divorce. Developing comprehensive insight of the short and long-term impact of divorce can save valuable time, money and distress, especially if the process is conducted early in the legal proceedings.
When invited to the table to offer advice, I am often asked about the long-term impact of receiving particular assets, the value of retirement assets, and the impact of alimony on the long-term cash flow of both the payor and recipient. It’s always better to analyze the financial impact of a settlement proposal before it is signed rather than live with the unintended consequences afterwards.
A CDFA can play a vital role in making sure a divorce doesn’t end in financial disaster and safeguards the financial future of clients and their families. As part of a divorce team, a CDFA can help avoid common mistakes such as:
- Negotiating to keep a home when it is unaffordable to the client
- Not understanding how taxes can impact both parties upon the sale or transfer of property
- Not looking at the long-term impact of a settlement
- Mistakenly believing that retirement assets have the same value as non-retirement assets
- Failing to understand the tax implications of spousal versus child support
- Not understanding how to divide debt between the divorcing parties
