Last updated on September 1st, 2022 at 07:07 am
It’s a common misconception among divorcing couples that their lawyer would be able to manage every part of the proceedings.
According to an Orange County divorce lawyer, Divorce is likely the single most expensive event in your financial life, as you’ve discovered. It’s also littered with tax and financial traps. That’s why it’s so important to be aware of your choices’ consequences to prevent making expensive errors.
Inquire about the services of a certified separation financial analyst.
Responsibilities Of Certified Divorce Financial Analysis
When working with an attorney and other advisers to help a client work through the challenges of a divorce, a CDFA takes a team approach and offers professional financial advice. An attorney may rely on a CDFA’s collaborative approach to provide testimony as just an expert witness and in-depth examination of corporate, economic, and emotional asset data.
Divorce attorneys are well-versed in legal elements and may have some financial understanding. Still, a CDFA is specially prepared to deal with the long consequences and financial repercussions of a divorce.
While the chapter provides an overview of financial planning and analysis, CDFAs also focus on specific issues like how to divide retirement funds, stock grants, and other assets; the tax consequences of settlements; the impact of health care; life insurance; and the repercussions of splitting a family home and other real estate interests.
After a divorce, a CDFA may help clients change their budgets, investment portfolios, and financial objectives by assisting them with post-divorce budgeting. Furthermore, they might include child and spousal support payments into their financial picture and plan.
To get the CDFA credential, candidates must have previous expertise in accounting, financial planning, or law and have completed an intense training program at the Institute of Divorce Financial Analysts.
Some CDFAs have additional training in mediation or collaborative divorce, so they may be able to help in these instances. CDFAs, on the other hand, are not lawyers and hence cannot provide legal advice.
When Do We Need A CFA?
If you’re considering employing a CDFA, there are several factors to keep in mind. In many circumstances, a client’s whole divorce demands may be met by just hiring an attorney. Retaining a CDFA, on the other hand, is sometimes necessary.
Complex assets, such as various real estate holdings, company interests, high-end jewelry or pieces of art, and so on, may rapidly become a source of confusion. With the help of an attorney, it may be challenging to value all of these assets and then determine how they’re being split or what the financial ramifications of that division are.
If one or both spouses is self-employed or one of the numerous partners in a firm, the financial profile of the relationship may be more complicated during the divorce. Separate property and marital property disputes must also be considered when drafting a prenuptial agreement. Before any split occurs, it is necessary to prove that assets have been mingled or kept separate.
If you’re going through a divorce, having an attorney and a CDFA on your side may safeguard you from suffering a significant emotional toll.
It is also possible for a CDFA expert attorney to advise a husband on which issues are worth fighting over and which ones aren’t. For example, they may play out hypothetical situations to show a spouse how a bargain would play out whether they accept it or not. Using a cost-benefit analysis to help make a choice may save time and money.
FINAL THOUGHTS
There is considerable overlap between the tasks of a divorce attorney and a CDFA, but the functions might be very distinct depending on the specifics of a divorce.
You may not require a CDFA if your divorce isn’t financially problematic. In some instances, a divorce lawyer may be all you need. However, you should never engage a CDFA at the price of a lawyer.
