How to Work with a Certified Divorce Financial Analyst

Over the course of the past several months, I’ve had the great fortune to get to know Jennifer Taylor, a Certified Public Accountant, Certified Divorce Financial Analyst, and founder of Square One Financial Services, Inc., based in San Clemente, California. Jennifer’s personal experience going through divorce inspired her to do what she does today: help others receive easy-to-understand financial guidance during their divorce process.

Separation of financial assets is one of the most complicated parts of the California divorce process. Working with a CDFA can help ensure that you’re making the smartest, most informed decisions possible during your divorce – and can help set you up for an easier transition post divorce.

But, what does a CDFA do, and how should you find and work with one? I turned to Jennifer for answers.

Erin: You have been in the very shoes of many of those you support. How does your divorce experience influence the way you coach your clients?

Jennifer Taylor, CPA, CDFA, of Square One Financial Services, Inc.

Jennifer: My experience going through a divorce is what makes me so passionate about helping others in the same situation. First and foremost, it allows me to genuinely empathize with the emotions my clients are facing. Beyond that, my first-hand experience navigating the divorce legal process and evaluating significant financial decisions of my own divorce have given me an appreciation for just how complex the process can be and how overwhelming it can feel.

In my specific situation, I relied on an attorney solely for process guidance, completion of forms and our marital settlement agreement, which was based on terms my ex-husband and I reached together without attorney involvement. Since we were both working good jobs and had purchased a house together when we were first married, we had to consider financial implication. From a math perspective, we both had a fairly equal share in what we contributed to the marital estate, so it really came down to what we were going to do with the marital home.

In all transparency, it wasn’t a straightforward process as we both had interest in keeping the home. After some negotiation, I put together my own home equity buyout proposal for my ex-husband which required me to take on a significant amount of financial risk. Part of that proposal included me refinancing my home in my name, thus having 100% of the financial burden going forward—pretty scary and stressful on top of all of the other emotions I was enduring at the time. Luckily, my ex-husband agreed to the proposal and, although it resulted in some uncomfortable compromises on my end in the short term – like bringing in a roommate for some period of time – in hindsight, the risk I took has paid off for me.

Experience like this gives me tangible examples to share with clients about the realities and risks of property division. Sometimes there are significant emotional and/or financial ties to marital assets, and it can often be very challenging to preserve the same lifestyle coming out of a divorce that you had going in. I like to hope I can provide an example of what buckling down and persevering can get you if you make the right interim choices and compromises.   

Related: 10-Step Quick Guide for Tackling Divorce Financial Issues

Erin: Do you think everyone getting a divorce needs a CDFA, or do you recommend that services like yours be used in different ways, based on different needs?

Jennifer: Working with a Certified Divorce Financial Analyst is a cost-effective way to insure against costly financial mistakes that could impact you for years to come. The financial decisions entered into the judgment become court orders and are enforceable.

With that said, the value a CDFA can provide is heavily correlated to the financial complexity that exists, however, some CDFAs like myself offer a variety of services to address less complex, fundamental needs as well.  Some of the primary reasons to engage a CDFA include possession of significant illiquid assets like real estate or retirement plans, a significant imbalance of income earning potential that requires a financial strategy, or even a lack of clear understanding regarding what is separate vs. marital property.  The list is long for reasons to seek the guidance of a CDFA.  However, if all you have are highly liquid cash-like accounts, you really may be able to handle it all yourself if you and your spouse can reach agreement on what is separate vs. marital property.    

My services address both situations. I provide in-depth, strategic divorce financial planning packages at flat fees based on the amount of assets in the marital estate, but I also provide hourly coaching and post-divorce financial budgets for those that just need a little support or guidance on focused topics.  My goal is to optimize my services so that my clients are maximizing their outcomes while minimizing their costs.

Erin: What should a person think about before selecting a CDFA? How should they find one, what questions should they ask to make sure the relationship will be a good fit, and what expectations should they have for their CDFA as they begin working with them?

Jennifer: When seeking a financial expert to assist in your divorce, first ensure that you are dealing with a Certified Divorce Financial Analyst (CDFA). This certification is the result of significant additional divorce-specific training in addition to other common certifications such as a CFP or CPA. Those looking for a CDFA can search the Institute of Divorce Financial Analysts website or perform a Google search. While it is not necessary to seek a CDFA in your local area, it is helpful to seek one that works within your state jurisdiction as they will be most familiar with state laws. Because of the state-level expertise, many CDFAs can effectively service clients virtually with the help of modern technology like video conferencing.

A large number of CDFAs, including myself, offer free introductory strategy calls. I would encourage people considering the need for financial guidance through the divorce process to schedule one of these consultations. These calls are truly commitment-free, last about 30-45 minutes on average, and will give you a much better idea of how a CDFA can help you. The calls will also typically end with pricing information based on the details of the discussion. During an initial call you should expect to:

1)      gain a good understanding of personality and fit of the CDFA,

2)      get a solid run-through of the logistics and process, and

3)      have a good discussion covering your financial situation, concerns, current state reality and ideal outcome

Based on this conversation, a good CDFA will ask investigatory questions along the way that will enable him/her to devise and communicate an initial strategy and provide some insight into what value can be provided.

One common misconception is that one needs to be armed with detailed information for a first call.  While high level facts are helpful, the idea will be to focus on a game plan rather than the specifics.

Erin: What do you wish clients would discuss with you at the outset of your work together? Are there specific financial areas you wish people would pay more attention to from the beginning?

Jennifer: I think a big part of the fear and uncertainty of divorce sprouts from the lack of understanding about what the financial picture will look like after the dust settles. Time and time again, I get the question, How am I going to make it? Because these uncertainties exist, I find that my clients are better able to manage stress and emotions encountered through the process if they can clearly articulate their financial priorities in terms of “must-haves” and “nice-to-haves” at the very beginning of the divorce process. This should be done by each party on their own, and then I will have a one-on-one discussion with each of them to address those priorities before we begin working toward what a win-win outcome looks like for them. Examples of must-haves may include being able to cover reasonable housing expenses, childcare expenses, etc., whereas “nice-to-haves” may include staying in the existing family home. Once these priorities are defined, it allows me to understand how close or far the couple is from alignment, and how much of a reality check will be necessary to reach a mutually attractive outcome.

Erin: Anything else you’d like to add?

Jennifer: I just would like to add that I feel achieving a high-quality, but low-cost divorce is truly realistic and that with the right divorce team or resources to focus on areas of expertise, win-win outcomes can be reached without a costly and stressful court battle.  

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