Janet T. Tighe, MBA, CFP®, CDFA®
Vice President & Senior Financial Counselor
October 11, 2017
Getting divorced is typically a painful and difficult process. It can be emotionally and financially devastating to all parties. Having a lawyer on your side to help navigate the process is crucial, but another professional to consider making a member of your team is a Certified Divorce Financial Analyst® professional. Many people are unaware of the additional specialized expertise that a CDFA® practitioner can provide when added to your financial team.
Much like a CERTIFIED FINANCIAL PLANNER® professional, the CDFA® practitioner will gather, organize, and analyze all relevant financial information, taking a comprehensive look at the divorcing couple’s financial situation. The advantage to including a CDFA® practitioner in the process is that this professional has completed additional coursework and examinations specifically regarding the financial complexities of divorce, and must participate in ongoing continuing education related to this specific field. Working together with your financial advisor and using software specifically designed for divorces, the financial divorce expert will assist in analyzing how the decisions made today will impact your future financial situation and will work to ensure that the financial settlement is fair to both parties.
It is not uncommon for one spouse to be less financially savvy than the other, often resulting in confusion and additional conflict when handling financial matters. Having a financial planning professional with expertise in divorce situations on your team to assist with the process can take some of the stress out of this part of the divorce. He or she can help you identify all of the marital assets that are eligible to be split, and look for any possible “hidden” assets, as well to review the outstanding mortgages or other debt, and assess how the debt will impact the division of assets. Additionally, evaluating the tax implications of various asset splits is an essential role performed by the financial expert, including the review of retirement accounts or pensions, and the longer term implications for splitting these between the divorcing spouses. Many times, the creation of a budget will be necessary to help understand what your financial needs will be post-divorce. You will need to be clear on what income you will have, and the expenses that might be incurred in running your separate household. Alimony or maintenance payments as well as child support, if minor children are involved, will be factored into the mix as well. These are just some of the items on which a CDFA® professional can provide guidance during the divorce.
A CDFA® professional will be able to model different scenarios to assist in determining the potential outcomes of the various proposed settlement options, and help you to see what your financial life might be like after the divorce. These projections should provide more clarity as you consider your future once the divorce is final. He or she can also help you transition to life after divorce and assist with tasks such as retitling assets, updating beneficiary designations, and addressing various insurance needs, among others.
No one wants to plan on getting divorced, but if it does happen, including a Certified Divorce Financial Analyst® professional as part of your team can lighten some of the burden of the divorce process and help you obtain a better financial settlement. You will have an advisor on your side who can provide some expertise on your financial situation, help you identify your future financial goals, and start you on the road to achieving them.