The Certified Divorce Financial Analyst (CDFA) is a trained and certified financial professional who can help you navigate the financial aspects of divorce. They often work alongside your divorce attorney and typically have a background in financial planning, accounting, or divorce law.
How does a Certified Divorce Financial Analyst work?
Divorce can be costly, and a Certified Divorce Financial Analyst (CDFA) can help you get the best deal possible. They can assist you in determining your cost of living in relation to inflation. This ensures that your assets are divided fairly and that you won’t embarrass yourself when negotiating a divorce settlement.
A Certified Divorce Financial Analyst (CDFA) looks at the financial value of your assets in both the short and long term. They can help ensure that you receive your fair share of the assets in the divorce. They will consider your current situation and future goals when assisting you and your attorney in determining what you want from the settlement.
They use specialized software to help them analyze assets such as:
- Real estate
- Expenses
- Retirement accounts
- Pension funds
- Life insurance
Certified Divorce Financial Analysts can also help couples going through a divorce set realistic monthly budgets post-divorce. They often work with clients to determine how to afford the lifestyle they wish to lead after the divorce or how the divorce will affect taxes in the future.
Note: A 50-50 split is not always the fairest, especially when it comes to details like retirement and child support.
Example of a Certified Divorce Financial Analyst (CDFA)
A Certified Divorce Financial Analyst (CDFA) is a trained financial professional who can help you handle the financial aspects of divorce. They often collaborate with your divorce attorney and usually come from backgrounds such as:
- Financial planning
- Accounting
- Divorce law
A Certified Divorce Financial Analyst (CDFA) must undergo training and certification to provide expertise in the financial ramifications of divorce. Their areas of expertise may include anything that could impact your long-term financial picture, such as:
- Alimony or child support
- Division of personal versus marital assets
- Determining the future value of pension funds and retirement accounts
- Calculating any divorce-related payments
- Tax law in divorce situations
How can I find a Certified Divorce Financial Analyst?
You can find a Certified Divorce Financial Analyst through the Institute for Divorce Financial Analysts, the first organization to issue certification for Certified Divorce Financial Analysts (CDFAs).
Note: A Certified Divorce Financial Analyst (CDFA) is not a substitute for a good divorce attorney. In many cases, you’ll need to hire an attorney or mediator before hiring anyone else.
Before hiring a Certified Divorce Financial Analyst or any other financial professional to assist you with divorce, you should check their qualifications along with several other factors:
- Certification: Ensure they are a member of the Institute for Divorce Financial Analysts or another reputable organization.
- Trust: Divorce is a challenging and emotional experience. Hire professionals you can trust and talk to openly.
- Recommendations: If you have a friend or relative who has also gone through a divorce, ask if they used a Certified Divorce Financial Analyst and whether they would recommend them.
- Interviewing: Don’t hesitate to ask potential Certified Divorce Financial Analysts questions such as how long they’ve been in practice, their working process, their average client profile, and even why they chose to become Certified Divorce Financial Analysts. Their answers will help you gauge whether they would be a good fit for working with you.
Cost of a Certified Divorce Financial Analyst
A Certified Divorce Financial Analyst charges hourly fees, similar to lawyers. These rates can vary based on your location and the value of your assets. Hourly rates may range from $150 to $450, although the cost will depend on your location as well as the complexity of the divorce.
Do
Do I need to work with a Certified Divorce Financial Analyst?
You may not always need to hire a Certified Divorce Financial Analyst (CDFA). If you are already working with a trusted financial advisor, they may be able to provide a good picture of your long-term financial outlook and how it may be affected by the divorce. They may have already developed a realistic monthly budget with you.
Note: In the case of an amicable divorce, you and your spouse may be able to settle everything using only a mediator and a Certified Divorce Financial Analyst, without the need for an attorney at all. This can save both of you money in the long run.
If you and your spouse have a joint business or significant assets, or if you do not know how to form a budget after the divorce, hiring a Certified Divorce Financial Analyst may be a good option. However, if you do not have significant or complex assets like businesses or multiple properties, you may be able to save money and handle it yourself.
Frequently Asked Questions (FAQs)
Should I hire a Certified Divorce Financial Analyst?
If you or your spouse have significant assets or assets that may be complex to divide, you will likely need to hire a Certified Divorce Financial Analyst (CDFA). If you and your spouse have a relatively simple financial situation with just a few assets, it may not be worth spending the money on a Certified Divorce Financial Analyst (CDFA). However, if you are unsure how to manage your financial situation after the divorce, it may be advisable to hire a Certified Divorce Financial Analyst (CDFA), even if the asset division does not appear to be very complicated.
What does a Certified Divorce Financial Analyst do?
A Certified Divorce Financial Analyst (CDFA) takes on many responsibilities. They review their client’s financial situation and help them determine the budget, lifestyle they desire, financial needs, and goals. They can show the client any settlement options that work best for them and the potential financial impact of each settlement option. They can also serve as expert witnesses in court or during mediation or arbitration.
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Sources:
- Institute for Divorce Financial Analysts. “Why Hire a CDFA Professional?”
- Institute for Divorce Financial Analysts. “What Is A CDFA?”
- West Coast Family Mediation Center. “What Does it Cost to Work with a CDFA?”
- Survive Divorce. “What Does a Certified Divorce Financial Analyst Do?”
Source: https://www.thebalancemoney.com/what-is-a-certified-divorce-analyst-4160062
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