Every CDFA knows that our relationship in the divorce process can be tricky. Many attorneys find that divorce is a big transition and managing client emotions during the process is already challenging. The addition of another professional seems cumbersome both in terms of time and expense.
However, those same attorneys could find that, in their more complex cases, having another set of eyes and ears may prove valuable both in keeping clients on track and bringing efficiencies to the case that can save expenses. The CDFA could serve as their financial paralegal and an additional resource for financial topics, freeing up their other to support personnel for the legal needs required by these same clients.
What sort of cases might warrant the use of a CDFA?
As examples, CDFAs know how to save money, possibly more that we charge. We identify forgotten or unreported assets such as annuities and life insurance because we understand all assets are not reported on the tax returns. We see where the penalties and excess fees can occur in the division of assets. We project the fees and tax consequences of alternative settlement options, often uncovering expenses that could be missed.
While paralegals can adequately inventory assets or prepare budgets, investments and tax laws change frequently. CDFAs with financial planning practices deal with these changes continuously. They manage investments, prepare budgets and project financial outcomes. Clients trust a financial professional who not only has knowledge of divorce issues but can also help them see the financial outcomes of their settlement decisions. CDFA professionals have the knowledge and resources to model financial calculations building client confidence and enabling them to make decisions in mediation or court.
Finally some CDFA’s can help with pension values, stock option divisions, and separate property calculations. Each CDFA has specific knowledge driven by their experience.
What an experienced CDFA will not do is give tax or legal advice. We simply help the client and attorney understand the financial impact of a legal strategy. Our priority is to identify assets and liabilities, clarify how each can be divided cost effectively and assess the ability of income support and assets to carry the clients financial life forward.
I would like to share examples of any of these. Feel free to contact me if you have questions about how my work could help any of your current clients.