What are common mistakes for divorcing couples with family home
1) Keeping when can’t afford it
2) Failing to consider CB
3) Not understanding the CG on sale
What are common mistakes for divorcing couples and spousal and child support
1) Improper structuring
2) Failure to understand tax implications in pre divorce
3) Not supporting with life insurance
4) Not having the receiving spouse own life policy
Have divorced rates increase since no fault divorces were enacted
YES
What a CDFA is NOT
Attorney
Business appraiser
Pension valuator
Actuary
CPA
Mediator
Is a CDFA allowed to provide legal advice?
NO
What is role of CDFA?
Take the information provided by your clients (and attorney), analyze the proposals, and show them the results
What is the most important role of a CDFA through the divorce process?
Client expectations manager
What are mistakes divorcing couples have regarding retirement plan?
Thinking retirement assets have some value as non retirement assets
Not evaluating the DB properly
Not understanding the differnent ways to divide a retirement asset
Not understanding the purpose of a QDRO…or knowing it needs to be completed in timely mannor
Not knowing a client can take a 72T distribution from DC plan to avoid the 10% penalty.
Not protecting the survivor benefits of DB plan for the non-employee spouse
What is divorce rate per 1000 in 2021
2.5%
How many divorces in 2021
689,000
What are some common mistakes with taxes with divorce
Not taking into account transactions costs when evaluating a settlement
Not understanding the methods or tax implications of dividing stock options
Not taking into account the effect of deferred taxes when dividing assets
What age group has the largest increases in divorces rates in US
65 and older
Is an attorney allowed to testify on behalf of their clients
NO
Most CDFA clients have joint income greater than what amount?
$100K
Most CDFA clients have total assets that exceed what amount?
$100K
To be effective as a CDFA professional…you must?
Look at both sides and provide a recommendation that is equitable to both sides
Do a majority of CDFA clients have high net worth?
YES
Is there a conflict of interest in simultaneously providing financial planning and working as a CDFA professional for the same client?
Yes
When should a divorcing individual hire a CDFA professional?
When considering getting a divorce
What are common mistakes made with regards to financial planning
Believing that 50/50 division of property is an equitable division
Not looking at the long term impact of a financial settlement
Failure to factor in inflation and returns when looking at the long term impact of a settlement
Making isolated financial decisions instead of looking at the big picture
Not understanding how to divide debt
What is the CPA’s role
Analyzes the client’s current financial situation and makes no projections. Can also support forensic accounting work
Should the CDFA take an innovative and creative approach to settling cases?
YES
CDFA professionals are trained to interview clients to:
Collect financial and expense date
Identify future financial goals
Create a budget
Set retirement objectives
Determine acceptable amount of risk with investments
Develop what kind of lifestyle they want to pursue
Determine education goals with their children
To be an effective as a CDFA professional, you must look at both sides and provide a recommendation that is equitable to both parties
YES
