The role of the CDFA® professional is to assist the client and his/her lawyer to understand how the financial decisions he/she makes today will impact the client’s financial future.
When people think about getting a divorce, the first professional that comes to mind is an attorney. Typically a financial advisor – whether it is a CPA, CFP®, or a CDFA® – is not considered until later in the divorce process – or even until after the divorce is final. Financial problems can tear a marriage apart, and are often the primary factor that leads to divorce.
Divorce Financial Planning
Once a decision to separate or divorce has been reached, all sorts of questions bubble to the surface. These questions are often clouded by wounded emotions and accompanied by mutual accusations, which comes as no surprise.
If a couple cannot solve their financial difficulties while the marriage was underway, it is unlikely that they will be able to agree on pressing financial issues when it has fallen apart. Many divorcing couples have these questions:
• Where will the children live?
• Who will pay for their education and medical treatment?
• How do we value our property?
• Who gets what property?
• What tax issues must we be concerned with?
• How do we divide retirement funds and pensions?
• How will the lower-earning spouse survive financially?
• What additional financial support does that person need?
• Who gets the house?
• What happens if a paying ex-spouse dies?
These are the questions that divorce lawyers face with each divorce case. Many lawyers struggle with the intricate financial details that concern tax issues, CRA rulings, capital gains, dividing pensions, and so on. Lawyers attend law school to become experts in the law, not to become financial experts.
Additionally, even if lawyers happen to have accumulated a degree of financial expertise, they are not allowed to testify on behalf of their clients in court. This is why more and more lawyers have seen the virtue of bringing a financial expert into the divorce process at the very start. Solid information and expert analysis are important resources in their search for the best possible resolutions for their clients.