Why You Need a Certified Divorce Financial Analyst (CDFA)

May 05, 2023

             Navigating a divorce is not for the faint of heart.  The emotional component is difficult enough, but the financial result can be devastating.  In a marriage, many couples struggle with the financial responsibility of supporting one household.  After a divorce, the same cashflow needs to support two households.  When children are involved, many times the economic piece of the divorce takes a backseat to the emotional piece.  With proper planning and expert help from a financial professional that specializes in equitable divorce settlements, you can increase the chance of arriving at a settlement that addresses your current and long-term needs.

             What is a Certified Divorce Financial Analyst?  Often a financial planner or a CPA, the designation is for those trained and certified in the financial aspects of divorce.  The CDFA assists the attorney and often interprets the financial aspects of divorce in laymen’s terms.  Many financial issues are complex in a divorce.  Pension plans, stock options, home equity and health care often need to be addressed by a financial professional.  Also, negotiating for one type of taxable asset in lieu of another can often have devastating long-term effects if not properly addressed.

            CDFA’s can assist men or women.  They can also work with both parties in a collaborative divorce or be hired by one side to assist.  I often work with women as they often are the weaker financial partner in a divorce and need the most help in understanding the financial ramifications of a settlement.  Even after the divorce, I often counsel my clients on whether to stay in the home or sell it, whether they should get a mortgage, what type of investment is suitable for their IRA and whether they will be able to retire someday.  My relationship with my divorce client can last one session if the issue is simple or it can last for years as we work together to become financially stable.

             When should you hire a CDFA?  Often, when divorce is imminent, a call to an attorney is the first call made.  Instead, finding a CDFA should be your first call.  After deciding on a parenting plan, most of a divorce is financial.  Many attorneys are not properly equipped to provide the financial support needed to guide their clients through all angles of a divorce.  The CDFA can help prepare your financial information before meeting with the attorney, saving many billable hours and making meetings more productive.  The hourly fees charged by attorneys are usually substantially more than those charged by a CDFA, saving significant dollars.  Most financial decisions arrived at during a divorce cannot be easily changed.  It is important to use your time and energy finding comfort and understanding in the decisions that will be made so that the post-divorce recovery is smooth.


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This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice.

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