What does a CDFA do in a divorce? First, CDFA stands for certified divorce financial analyst. We all must have 2 years or more experience in the financial services or accounting industry before we can start studying for our CDFA. We must self-study and pass 4 modules to obtain our certification. Then every 2 years we must have 20 hours of continuing education credits. Some of those credits can be from the financial services, legal and/or accounting classes. As an insurance licensed CDFA, according to your home state, you must also obtain insurance continuing education credits on top of the CDFA. If you have further licensing (CFP or CPA), there are even more continuing education classes you must maintain. So it is safe to say, CDFA’s are experienced and educated on many levels about financial assets, documents, taxes, etc. So that qualifies us to be the expert in your divorce to help with splitting marital assets. What these associations don’t teach us, is the emotional aspect of these negotiations. When a client has been hurt, deceived, or worse is seeking revenge, it makes it extremely difficult for their attorney, their soon to be ex-spouse, and especially the children to negotiate a settlement. If you are this spouse, it is very difficult to separate emotions from facts.
Here is a typical client of ours. Usually the hurt, deceived or unsuspecting spouse is my client. It is the job of the CDFA to document the facts (from financial documents). With the help of the attorney, these documents can be obtained through a process called discovery. Discovery is requesting facts and documents from the other spouse. When the financial documents are obtained and recorded, it is the job of the CDFA to put them in a logical order, review for accuracy, calculate future outcomes for both parties and help the client decide what asset(s) they should take and how much. And here lies the problem. The hurt spouse has a very difficult time separating emotions from facts. Court is the last place they should spend their money and energy seeking revenge, righting wrongs, or bringing all the dirt out on their spouse. In the end it doesn’t really help you heal and move forward. What does help them heal is time, self-reflection, help groups and therapy (not alcohol, drugs, gambling or shopping therapy!) will help them through the emotions of it all.
If a spouse cannot see past the hurt, anger or revenge, then they should wait to negotiate so their decisions are not made by emotions. The biggest question clients have is, ‘How am I going to be after the divorce?’. That question is usually a financial one. CDFA’s can take the ‘fear’ out of that question and help set clients on the right financial path post-divorce. CDFA’s can help couples split their marital assets, and project post-divorce budgets.
There is no cut and dry way to split assets. The worst a client can do is split everything down the middle 50/50. Not only is this not the best way, they may incur unnecessary penalties and taxes. Taxes are an issue most attorneys are not well versed in. So seek the help of a qualified accountant or CPA who can be on your divorce team and after. It is well worth the money to pay them to do your taxes right the first time and help you with any tax liabilities in the future. It is often cost effective to hire a CDFA along with your attorney. CDFA’s know more about financial assets, tax penalties, and can project future growth on your assets. Forensic accountants can trace history not project the future.
So get control of your emotions and gain some knowledge about financial assets, taxes, and work on your negotiation skills. Work with someone who has many years of experience doing this and do not rely on the internet and your friends for all the answers.