Six Ways a CDFA® Helps During Divorce Proceedings

By Hollis Hardiman, CDFA®, Wealth Manager, Partner, Merit Financial Advisors

Divorce is a challenging and emotionally charged process, and it can be particularly difficult when it comes to unraveling the financial intricacies that often accompany the dissolution of a marriage. In such turbulent times, the expertise of a Certified Divorce Financial Analyst® (CDFA®) can be invaluable. A CDFA® is a financial professional who specializes in helping individuals and couples navigate the complex financial aspects of divorce.

As we start another year, you or someone you know might be considering divorce. Indeed, January has often been deemed Divorce Month. Recent studies show that “after reaching a 40-year record low for two consecutive years (2020 and 2021 at 14.0 divorces per 1,000 married women), the divorce rate rose slightly in 2022 to 14.56 divorces per 1,000 married women.

If divorce is on the horizon for you or someone you know, a Certified Divorce Financial Analyst® will prove helpful through the entire process. In this article, we will explore the six main ways a couple undergoing divorce can benefit significantly from the guidance of a Certified Divorce Financial Analyst®.

1. CDFA®s Provide Comprehensive Financial Analysis

One of the primary benefits of engaging a CDFA® is the comprehensive financial analysis they provide. Divorce involves the division of assets, liabilities, and financial responsibilities. A CDFA® can meticulously analyze the financial aspects of the marriage, including property, investments, debts, and retirement accounts. By offering a clear picture of the couple’s financial landscape, the CDFA® helps both parties make informed decisions about their financial future.

2. They are Budgeting and Cash Flow Management Experts

A CDFA® can assist in creating realistic budgets and cash flow projections tailored to the individual needs and circumstances of each spouse. This ensures that both parties have a clear understanding of their financial standing and can make informed decisions about lifestyle changes, expenses, and savings goals.

3. CDFA®s Help You Understand Tax Implications and Optimization

Divorce often has significant tax implications, affecting everything from alimony to the division of assets. A CDFA® can identify potential tax liabilities and opportunities for optimization, ensuring that both parties make decisions that minimize the impact on their financial well-being. Understanding the tax consequences of various financial settlements is crucial in making informed choices that align with long-term financial goals.

4. They Help with Long-Term Financial Planning

Beyond the immediate financial concerns, a CDFA® helps individuals plan for the long term. This includes retirement planning, investment strategies, and other considerations that may be impacted by the divorce. By offering a holistic view of the financial future, a CDFA® helps divorcing couples make decisions that align with their goals and aspirations, setting the foundation for financial independence.

5. CDFA®s Facilitate Better Communication

Divorce can strain communication between spouses, especially when it comes to financial matters. A CDFA® can act as a neutral third party, facilitating discussions about financial issues in a structured and objective manner. This can help in reducing conflict and fostering a more cooperative environment, ultimately leading to more mutually beneficial financial decisions.

6. They Help with Asset Protection and Preservation

Protecting and preserving assets is a critical aspect of divorce. A CDFA® can provide insights into the most effective ways to protect assets during and after the divorce process. This may involve considerations such as insurance policies, estate planning, and other strategies to safeguard financial well-being.

Divorce is undeniably a challenging journey, and the financial implications can be overwhelming. Engaging the services of a Certified Divorce Financial Analyst® can be a strategic move to navigate these complexities with clarity and confidence. By providing a thorough analysis of the financial landscape, facilitating communication, and offering long-term planning strategies, a CDFA® can be an essential ally in helping individuals and couples achieve financial independence post-divorce.

Curious about working with a CDFA®? Contact Merit Financial Advisors today for a complimentary consultation.