If you’re getting divorced, it’s likely to be one of the most challenging events in your life. In addition to the emotional and psychological impact that a divorce can have on you, it can also profoundly affect your financial future. Yet while most people going through a divorce will work with an attorney or mediator to address the legal aspects, many will unfortunately not seek guidance for the financial consequences. A Certified Divorce Financial Analyst (CDFA®) professional can provide you with the objective advice and guidance you need to understand all of the financial aspects of your divorce.
A CDFA® professional has a financial planning, accounting or legal background, and has also received additional specialized training in understanding and analyzing the financial aspects of divorce.
Why the Credential Matters
The CDFA® credential is increasingly recognized in the professional community and by the general public as the gold standard for divorce financial analysis. The credential is awarded by the Institute for Divorce Financial Analysts (IDFA). The prerequisites to become a CDFA® professional include a minimum of three years of professional experience in finance or family law and a Bachelors degree, completion of the CDFA® education program, and successful completion of the certification examination. Credential holders are also required to complete divorce-related continuing education each year.
Provide Expert Financial Counsel During a Divorce
A CDFA® professional is ideally qualified to assist in making decisions about all of the financial aspects of your divorce. They can work with you in one of two ways.
First, a CDFA® can work together with you, your spouse and your mediator or attorneys as an independent, neutral third-party, providing objective analysis of potential settlement scenarios.
Alternatively, if there is a real or perceived imbalance of financial knowledge, control or power, and you and your spouse don’t see eye to eye on retaining a CDFA® as a neutral third-party, you can hire a CDFA® as an expert advocate for your interests, and have them help you design a settlement proposal or review potential scenarios on your behalf. This will ensure that you won’t make important and lasting decisions during your settlement negotiations without an understanding of the implications and consequences.
Help Make Financial Decisions During a Divorce
The divorce process can be overwhelming, and the accompanying emotions and stress can affect your decision-making.
As part of the settlement negotiation, you’ll be asked to make important financial decisions with long-term ramifications.
For example, you’ll need to value your property, decide on an equitable division of your marital assets, and to take into account the tax aspects of this split.
If you have children, you’ll need to agree on where they will live, and who will pay for their education and health care.
If you and your spouse have different income levels from employment, you’ll need to determine whether spousal support is appropriate, and if so, how much and for how long.
And as you begin to plan for a new life as an unmarried person, you’ll need to decide where you’ll live, whether you’ll continue to work or perhaps return to a career you had put on hold, how you’ll invest your share of divided investment and retirement accounts, and so on.
A CDFA® professional will be able to help you understand the short- and long-term consequences of all of the choices you’re contemplating or the decisions you’re making, all with the objective of ensuring that you’re as prepared as possible for life after your divorce.
Contact us today to learn how a Certified Divorce Financial Analyst® can help guide you and answer your financial questions before, during, and post-divorce.
Advise You Post-Divorce
Depending on the understanding you and your ex-spouse reached during your divorce, you may be able to work with your CDFA® professional after your divorce is finalized. If not, it may be wise to seek out a new CDFA® or CFP® advisor to help you plan your post-divorce life. For example, you’ll want to work with your advisor to make sure your financial plan reflects your new circumstances and your budget reflects your new reality, your portfolio is restructured to suit your particular investment needs and constraints, and your estate plan is updated.
Where You Can Find a CDFA® Professional
As the CDFA® credential has gained exposure, more people contemplating divorce are seeking out a CDFA® professional to help them understand the financial aspects of their divorce.
If you or someone you know thinks the guidance of a CDFA® professional could be of help, the best place to start your search is on the IDFA website. You can search for a credentialed professional by name, or by location.
Depending on the aspects of your divorce that are most important to you, you may want your CDFA® professional to have a financial or legal background. Gender, location and experience may also be important criteria to you.
You should note that some CDFA® professionals only work as an independent, neutral third-party, while others are willing and able to advocate for one party’s interests.