What Is a Certified Divorce Financial Analyst (CDFA)?
A Certified Divorce Financial Analyst (CDFA) uses their knowledge of tax law, asset distribution and short- and long-term financial planning to achieve equitable divorce settlements. A CDFA can provide in-depth financial analysis and advice to attorneys and divorcing couples relating to the divorce.
CDFAs are required to have several years of relevant experience and pass an exam designed by the Institute of Divorce Financial Analysts (IDFA) to receive the designation.
- A Certified Divorce Financial Analyst (CDFA) uses their knowledge of tax law, asset distribution, and financial planning to achieve equitable settlements for divorcing couples.
- They work in conjunction with the divorcing couple and their lawyers.
- CDFAs must have several years of relevant experience and pass an exam designed by the Institute of Divorce Financial Analysts to receive the designation.
Understanding Certified Divorce Financial Analysts
The best-case scenario for two people divorcing is that it’s amicable and both parties agree on the division of assets. In this case, you might only need a neutral mediator to help with paperwork. Some divorces that don’t involve property, retirement accounts, children or large sums of money might even be completed by following a few simple steps online.
However, divorce after many years of marriage with two conflicted people almost always requires the hiring of two attorneys—one to represent each party. Unfortunately, court dates, attorney meetings and negotiations all add up to time, and time means a whole lot of money to attorneys. Hiring yet another professional may not be ideal, but some situations call for a CDFA. The Institute for Divorce Financial Analysts (IDFA) points out that conducting a financial analysis early in the divorce process can save time, which in turn saves money.
Information provided by the clients and attorneys is used to analyze proposals for the division of assets, alimony, custody, child support, etc. CDFAs can then project the financial impact of a proposal in the short and long-term, and formulate different options that may leave both parties in better positions post-marriage. They can even give absolute values to assets that may be under- or overestimated.
In a nutshell, CDFAs are best at providing advice on:
- Valuing assets and debts
- Valuing the marital home
- Dividing retirement and pension accounts
- Amount and duration of alimony
- Tax implications of alimony and property division
- Setting up a budget for life after the divorce
While a CDFA may be knowledgeable about divorce law, they should never be hired in place of an attorney or mediator.
Certified Divorce Financial Analyst (CDFA) Qualifications
CDFAs go through a rigorous process to become this type of professional. They must have a bachelor’s degree with three years of on-the job experience or—if no bachelor’s degree—five years of relevant experience. Candidates are required to pass an exam designed by the Institute of Divorce Financial Analysts (IDFA). There are currently four methods of pursuing the CDFA certification: exam only, self study, self-paced eLearning, and virtual classroom.
To retain the CDFA designation, holders must also obtain 30 divorce-related hours of continuing education every two years.