Certified Divorce Financial Analysts®

Before the case is even filed, the CDFA® professional can be used as a strategist in the litigation process. The lawyer needs to know what the financial implications are for different divorce settlements. Once you prepare this analysis, it will give the attorney the ammunition he or she needs to negotiate the most advantageous settlement for your client.

In the divorce process, the attorney will view the CDFA® as the financial expert. We may be called on to review and give input on investment data, retirement plans, benefit programs, business records, tax returns, and all other financial data.

A key support role the CDFA® can play to the client and his or her attorney is to help them collect data to prepare the financial affidavit and pre- and post-divorce budgets.

In meetings with the client; the client and his or her attorney; the client, spouse, and the attorneys; mediation sessions; arbitration hearings; or the trial, the CDFA® professional is often asked to present evidence to show the financial impact of different settlement options or information related to financial, tax, investment, or retirement plan issues.

This is probably one of the most important roles that a CDFA® professional plays in the process. Many clients come in with unrealistic expectations and often need a reality check. For instance, there was a case in which a woman was getting divorced after 25 years of marriage. The children, two girls, were almost out of college. The woman had expectations that when she divorced her husband, who was earning about $95,000 per year, she would essentially be taken care of for the rest of her life. She needed to know, from a financial planner’s perspective, the reality of what was going to happen. Even though her husband earned a significant salary, she did not have a realistic view of what could be expected as a result of the divorce. They did not have very much property, and they had spent almost everything they had earned during the marriage. In addition, she had not worked much outside of the home. It was very important for someone with an extensive financial planning background to give her a realistic expectation of the future.

The CDFA® professional cannot provide legal advice. Their role is to assist the attorney with financial issues related to the divorce—not to replace the attorney. The CDFA® professional should always recommend, if not require, that any client hire legal counsel. It is critical that clients seek their own legal counsel to ensure their interests are properly represented.

The CDFA® professional is not qualified to conduct a business appraisal. They may work with a business appraiser to collect data required to prepare the appraisal and use the appraised value in their analysis, but only a trained appraiser can value a business.

Preparing pension estimates. However, to prepare a true pension valuation requires the use of an actuary.

As a CDFA® professional, we understand many actuarial concepts and how to use actuarial tables, but the CDFA® designation does not make them an actuary.

As a CDFA® professional, we review many tax issues related to the client’s financial situation, but the CDFA® designation does not make us a CPA or tax preparer.

Most states require specific training and experience to be qualified as a divorce or family law mediator. In certain occasions, however, we may be hired by the divorcing couple to serve as a financial expert in the mediation process. As a financial neutral, the CDFA® helps a couple ensure that all of their financial settlement decisions are fully educated and informed as to the short- and long-term implications and tax ramifications specific to the settlement terms.