Advice for Savvy Retirement Planning

What Is a Certified Divorce Financial Analyst(R) Professional?

CC-Dollar DrainOne of the most difficult aspects of divorce can be the financial trauma inflicted on both parties. Not only can the direct costs of divorce be significant (such as attorney fees, transitory costs, etc.), but the lifelong financial outcome and unanticipated financial consequences of divorce can be catastrophic.

There is no getting around the fact that a household income (be it one or both spouses working) that was supporting one household that now must support two, will often result in a lower standard of living for one or both parties. But there can also be a piece missing from the “typical” divorce process that can magnify negative financial outcomes. More often than not, parties to divorce do not seek financial counsel, either early enough, or at all.

What is a Certified Divorce Financial Analyst® Professional?

A CDFA® professional is a financial professional who has the requisite test results and experience level to be certified to help people navigate the specific money issues that come up during a divorce. A CDFA® professional is someone who comes from a financial planning, accounting or legal background and goes through an intensive training program to become skilled in analyzing and providing expertise related to the financial issues of divorce.

What Does a CDFA® Professional Do?

The role of the CDFA® professional is to help both client and lawyer understand how the financial decisions made today will impact the client’s financial future, based on certain assumptions.
The CDFA® professional:

  • Becomes part of the divorce team, providing litigation support for the lawyer and client, or becomes a member of a Collaborative Law team.
  • Identifying the short-term and long-term effects of dividing property.
  • Analyzing pension and retirement plan issues.
  • Determining if the client can afford the matrimonial home – and if not, what might be an affordable alternative.
  • Evaluating the client’s insurance needs.
  • Establishing assumptions for projecting inflation and rates of return.
  • Bringing an innovative and creative approach to settling cases.
  • Provides the client and lawyer with data that shows the financial effect of any given divorce settlement.
  • Appears as an expert witness if the case should go to court, or in mediation or arbitration proceedings.
  • Is familiar with tax issues that apply to divorce.
  • Has background knowledge of the legal issues in divorce.
  • Is trained to interview clients.
  • Collect financial and expense data.
  • Help client’s identify their future financial goals.
  • Develop a budget.
  • Set retirement objectives.
  • Determine how much risk they are willing to take with their investments.
  • Identify what kind of life style they want.
  • Determine the costs of their children’s education.

Why Do I Need a CDFA® Professional?

Just like a CDFA® professional would not try to counsel someone on the legal or emotional aspects of divorce, many other professionals (ie. divorce attorney, therapist, stock broker, etc.) are not trained to advise on the financial aspects of divorce. If you and your spouse have significant financial assets, the financial ramifications can be substantial. It is best to enlist the help of a financial professional specifically trained to guide you through the process. It is a small price to pay when the implications of a major financial mistake can be significant.

How Do I Find a CDFA® Professional?

The easiest ways to find a qualified CDFA® professional are to either ask your divorce attorney for a recommendation, or to visit the Institute for Divorce Financial Analysts (InstituteDFA.com).

Robert Henderson is the President of Lansdowne Wealth Management, an independent, fee-only advisory firm in Mystic, CT. His firm specializes in financial planning and investment management for retirement, with a special focus on the particular needs of women that are divorced or widowed. He is an Accredited Asset Management Specialist and a Certified Divorce Financial Analyst® professional. Mr. Henderson can be reached at 860-245-5078 or bhenderson@lwmwealth.com. You can also view his personal finance blog,The Retirement Workshop at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.

Preparation of QDRO’s in Connecticut

In addition to their divorce financial planning work, Lansdowne Wealth Management also partners with Dr. Robert Hetsler, a national expert on the preparation of divorce QDRO’s (Qualified Domestic Relations Orders). As a team, they provide the most accurate QDRO’s in CT, with one of the fastest turnarounds in the industry. For more information on the preparation of QDRO’s in CT, please see our website, www.QDRO-CT.com.

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