"I'm thinking about getting a divorce. How can a Certified Divorce Financial Analyst (CDFA) help me?"
Financial planners are the recognized experts in personal finance and possess a comprehensive knowledge of fiscal issues. As a member of your divorce team early on, a CDFA can help prepare statements of marital assets and liabilities, develop accurate budgets (historical and post-separation), evaluate settlement proposal(s), minimize post-divorce taxes, be your financial coach, and testify as an expert witness on issues related to lifestyle and personal finance. Through this venue, a CDFA can enhance the productivity of your matrimonial attorney and boost your understanding of financial issues.
A CDFA works individually with you to recognize your unique needs, goals, and attitudes towards money. In divorce, when there's one pot of money to divide between two households, it's likely that everyone must make do with less. By setting financial priorities, CDFAs help you plan your post-divorce lifestyle to realize the most benefit from available resources. Perhaps most importantly, CDFAs can level the playing field between two divorcing spouses, where one spouse possesses less financial savvy than the other.
Planning for the future is an essential part of every divorce and fundamental to financial planning. Settlements that look fair initially often become unworkable over time due to changes in income, taxes, maintenance and child support. CDFAs utilize divorce-planning software to produce 10- and 15-year projections of clients' finances. Long-term analyses are necessary to check on the viability of a settlement and answer questions such as: "Can I afford to keep the marital residence?" "Should I give up my share of my spouse's pension?" and "What post-divorce lifestyle can I expect?"
Most clients enter divorce looking back towards their past, seeing broken dreams, wondering what went wrong -- and whose fault it was. A CDFA can help change your perspective to face forward towards the future and structure your finances for what lies ahead.
Lee Slater, MBA, CDFA, is a Certified Divorce Financial Analyst in New York City and president of the Association of Divorce Financial Planners. He works with individuals and couples in both legal and mediated divorces.