What is a CDFA?
What is a Certified Divorce Financial Analyst (CDFA)?
A CDFA is a professional who goes through intensive training to become an expert in understanding, analyzing, and resolving divorce-related financial issues.
The CDFA reviews and assimilates clients’ financial data to help determine the short-term and long-term financial impacts of any proposed divorce settlement, in turn facilitating the achievement of an equitable divorce solution that is a win-win for all parties.
A CDFA provides valuable information on divorce-related financial issues, such as:
single-to-dual-household budgeting,
income tax consequences,
* division of pension & defined contribution retirement plans,
* continued health care coverage,
and much more.
We had a fairly complicated case from a financial perspective and needed to sort through it. Working with Facilitated Divorce Solutions gave me the benefit of knowing that all angles of the financial picture were being taken into account.
—Melanie J. (Bay Village, Ohio)
Should a Divorcing Individual Hire a CDFA Instead of An Attorney?
Typically, the CDFA’s role is to assist the attorney, not to replace the attorney. Finance, including financial analysis and projection, isn’t part of the standard law school curriculum, and good divorce attorneys understand they don’t have the expertise and/or time to handle the financial complexities of their clients’ cases. This means that more and more divorce attorneys are now encouraging their clients to hire a skilled CDFA professional to assist in their marriage termination processes. The role of each professional compliments one another. The attorney’s job is to advocate for and explain to the client his legal rights and obligations. A CDFA professional uses her financial planning, accounting, or legal background to provide expertise related to the financial issues & implications of divorce.
It Is Definitely Advantageous to Hire a CDFA First.
A CDFA professional such as Becky not only educates her clients regarding various financial considerations, but she can also assist them in designing a process to facilitate the termination of their marriages beyond the traditional litigation-oriented model (e.g., Mediation, Collaborative). A CDFA further helps her clients organize and streamline their financial data, which in turn helps contain the cost of the process. Once an understanding of the client’s financial situation is established and a dispute resolution method is selected, a CDFA can recommend attorneys who practice within this framework.
Top 5 Reasons to Hire a CDFA:
Financial analysis conducted early in the divorce process can save time. The average length of the U.S. divorce process is one year. A CDFA can explain and analyze finance-related aspects to empower her clients to make educated decisions quicker and/or within their own Alternative Dispute Resolution timeline.
A CDFA can help her clients save money during the divorce process. A legal settlement offer that floats back and forth between attorneys – without one or both spouses clearly understanding all potential financial ramifications – can be detrimental, time-consuming, and expensive. A CDFA educates and empowers her clients regarding often-complicated financial decisions.
A CDFA can help her clients avoid long-term financial pitfalls related to divorce agreements. A CDFA can forecast the long-term effects of a potential divorce settlement. Financial decisions should be based not only on present-day needs but on retirement needs as well.
A CDFA can help her clients develop detailed household budgets to prevent post-divorce cash flow crises. A CDFA can help clients transition from budgeting based on one joint household to individual households by developing a realistic monthly budget, taking into account predicted future income and expenses.
A CDFA can reduce apprehension and misunderstanding about the divorce process. No matter the financial and emotional dynamics between spouses, divorce represents change and uncertainty for all involved. A CDFA is trained to empower her clients to maximize their confidence in their lives as financially-independent persons.
"You shouldn’t put your future in the hands of a judge who doesn’t know you and go sit in the hallway and wait for a judgment to determine your fate."
—Rebecca S. Murphy