Divorce is far more than the end of a marriage. It can impact your financial well-being for the rest of your life. Yet you’re required to make crucial financial decisions at a time when you may be consumed by myriad emotions that too often lead people to do things that aren’t in their best interests.
Your attorney will provide guidance on the legal aspects of your divorce. You may also benefit from having a Certified Divorce Financial Analyst (CDFA) on your team. A CDFA isn’t the same as a financial advisor. CDFAs have specialized training to deal with the long-term financial and tax impacts of divorce.
What does a CDFA do?
A CDFA may work closely with a family law attorney in support of their mutual client to help ensure that they seek the best possible settlement. They can provide guidance on things like:
- Division of assets like stock options and pension plans
- Tax consequences of potential settlements
- Life insurance and health insurance coverage
- They may also testify as an expert witness regarding things like financial records if needed.
Do you need a CDFA?
These professionals can be costly to hire. However, the difference their guidance can make in the value of a person’s settlement can more than offset their fees.
So who can benefit from having a CDFA in their divorce? Just because there are considerable assets at stake, that doesn’t necessarily mean you need a CDFA. For example, if your marital assets consist of easily identifiable and quantifiable things like retirement plans, a home and some investment and bank accounts, you and your spouse can likely divide them with the help of your attorneys and perhaps your own financial or tax advisors.
If you have more complex assets, like businesses, multiple real estate holdings, artwork, jewelry and/or overseas assets, a CDFA can help you value and seek a fair share of them. While a CDFA isn’t a forensic accountant, they may be able to spot signs that your spouse is hiding or undervaluing assets and recommend a forensic accountant if they believe significant assets are being left out of the divorce.
If you think a CDFA may be a good investment, it may be worthwhile to talk with one. Your family law attorney can likely recommend one or more CDFAs in your area who would be a good addition to your team.