Divorce and Retirement Accounts

Divorce and Retirement Accounts

The valuation and division of retirement accounts in divorce is more complex than most divorcing couples expect.  We frequently see people after the fact who wish they had known better before they signed papers to finalize their estate division.  The details are important.  Below are four common items to know about before you sign on the dotted line.

1. Does a retirement account only belong to the person whose name is on the title?

What if only one spouse worked for most of the marriage while the other was the primary caretaker for the home and children?  If that’s the case, most of the retirement assets are likely only in one spouse’s name. Despite the titling, these retirement assets acquired during the marriage belong to the community estate and are fully subject to division in a divorce.  It is common for clients who own retirement accounts to believe they are entitled to the entire account since it’s in their name. However, money earned during the marriage is a marital asset and subject to division in a divorce within a community property state like Texas.

In contrast, retirement assets earned prior to the marriage are typically considered separate assets and not subject to division in the divorce. In addition, the growth on those separate assets during the marriage is considered separate property (but not the income, yes, it gets confusing). For an accurate appraisal of what portion of a retirement account is separate versus and what portion is marital, a separate property accounting must be conducted.  The burden of proof is on the person making the separate property claim.  All assets, no matter what the title says, belong to each spouse equally if the asset was acquired during the marriage, except for those assets which were inherited or gifted during the marriage or came from a personal injury suit.

2. How will we be taxed if we divide a retirement account?

You are not necessarily taxed on the division of a retirement account. Taxation happens only if you distribute the retirement account outside of the retirement vehicle.  For example, if your spouse has a large 401(k) and you divide it during the divorce, no problem.  You can move these funds into an IRA for yourself without paying any tax and let it continue to grow tax deferred. The same rules apply if you are dividing an IRA.  You only acquire a tax liability when you redeem the funds from the retirement chassy and put them into your bank account or a non-retirement brokerage account.

3. Which retirement assets are best to keep in a divorce?

Not all retirement assets are equal as far as the IRS is concerned, which means what you get to keep in your pocket differs – sometimes substantially- between different retirement accounts! This is a synopsis of the different types of retirement assets we commonly see with divorcing couples in our office.  We also provide a discussion of liquidity as having liquid, available cash is king in a divorce.

Pension Plans

Pension plans typically rate lowest on the list of assets to obtain because those funds are not liquid today (unless you are at retirement age). Further, each plan has its own rules surrounding availability of the pension funds to the ex-spouse. Some funds mandate you wait for your ex-spouse to retire while others will let you retire on your own timeline after you have reached a certain age which can be anywhere from 50 to 65.  Pension plans may also offer a lump sum option at retirement – it just depends on the company or entity offering the plan. There is also the issue of company solvency – will this pension plan even exist when you are retirement age?   It is also important to know if you are entitled to assets if your spouse dies before the pension plan begins – some entities don’t pay you at all if your spouse dies before the payout has started, even with a divorce decree.

It is wise to involve a Certified Divorce Financial Analyst or CDFA in cases with a pension as they can help you understand your options and make those phone calls for or with you.  Know the rules of your potential pension plan before you sign any binding documents

Traditional IRAs

IRA’s typically rank lower on the scale of available, liquid assets because withdrawals are usually taxed at the owner’s highest marginal tax rate and incur a 10 percent penalty until age 59.5 (barring the exceptions of substantially equal periodic payments for those typically 50 and over, death and disability).   There are no divorce exceptions to the penalty as there are in a 401(k) which is why we prefer our clients are awarded the 401(k) assets rather than the IRA assets if there is a choice.

401(k), Profit Sharing Plans and other ERISA-Regulated Plans

ERISA regulated plans (such as 401k’s and Profit Sharing Plans) are one step above the Traditional IRA regarding assets available for liquidity as you can redeem cash from your ex-spouses 401k plan without paying the 10% penalty, but you still must pay taxes.  That is a big savings – especially in larger plans.  You can save thousands in fees by just taking the 401(k) over the IRA if you are in need of cash from the retirement assets.

The down side is a federally mandated 20% withholding on all cash distributions. For example, if you want $80,000 in cash from your ex-spouses 401k, you’ll need to withdrawal $100,000 as 20% ($20,000 in this example) will automatically be forwarded to the IRS.  You are not losing that money – you’d owe it in taxes anyway you are just forced to pre-pay your taxes.  If you do not owe the full 20% at tax time you will receive a refund or if you owe more, they will certainly let you know when you complete your taxes the following year.  The other negative is 401(k)’s can only be awarded via a Qualified Domestic Relations Order or QDRO.  QDRO’s cost an additional fee of $500 – $1,500 and they take time and work to finalize.


ROTH IRA’s are the most advantageous retirement asset for liquidity needs during or after divorce. The principal put into a ROTH IRA can be withdrawn tax and penalty-free at any time for any reason.  The earnings on the ROTH IRA are different.  The earnings can be subject to taxation and the 10% early withdrawal penalty (before age 59.5) but you are able to take all of the principal before touching the earnings.  For example, if you have a ROTH IRA worth $40,000 today which you originally invested 15,000 in; the $15,000 is principal and the other $25,000 is earnings.  In this example, you can redeem the $15,000 with zero penalty and zero taxation while the rest can be left alone to grow.

4. Should you consider the value of retirement accounts after taxes when dividing assets in a divorce?

Many attorneys will “tax effect” retirement plans (discounting the account by the recipient’s marginal or effective tax bracket). Left unchecked, the spouse receiving more of the retirement accounts may benefit (possibly unfairly) in negotiations from this practice.  However, if your spouse is not playing fairly and trying to stick you with all the retirement accounts while they take all the cash, a tax effecting is in order.  Tax effecting can be as simple as taking 20% – 28% off the value of the retirement account and dividing that.  Or, it can be as complex as determining your effective tax rate and considering what assets will actually have to be used and tax effecting just those by the actual amount of tax you will pay this year (and possibly projecting out to the next few years).    By preparing financial projections, a CDFA can assess the amount and timing of the recipient’s anticipated withdrawals and tax liabilities from retirement accounts.

Questions About Divorce and Retirement Accounts? Let us help.  Retirement accounts are complicated, especially in divorce. Understanding tax implications and liquidity are critical in divorce negotiations.  You only have one shot to get this right.  Ensure you are receiving the settlement that’s best for you by having the right people on your team. Contact Divorce Strategies Group for a complimentary 30 minute phone consultation to discuss your specific needs.

Three Divorce Mistakes to Avoid

Three Divorce Mistakes to Avoid

When you are facing divorce life can see overwhelming. To make matters worse, in the midst of emotional turmoil you are asked to make life altering financial decisions. This is tough!! We STRONGLY encourage you to hire a divorce team with experts in each area of needed expertise. An experienced, knowledgeable attorney is critical. Next, if you have financial concerns, it makes sense to hire someone to help you with the financial questions and issues in your divorce. A Certified Divorce Financial Analyst or someone trained and experienced specifically in the areas of divorce finance and tax can save you thousands of dollars in your overall settlement.

We have seen many people come into our offices after the divorce details are finalized only to discover they could have done better or they will lose 30% of what they were awarded to taxes. We don’t want this to happen to those still in the divorce process. Be informed! The following are mistakes we see repeatedly when it comes to divorce.

3. The settlement doesn’t take taxes into effect.

If the old saying, “death and taxes are the only sure thing we have in life” holds true, why would you settle divorce negotiations without knowing the tax implications of your settlement. You are going to be taxed, just know what those taxes will be!

What people often find is the tax burden on their half of the marital assets is significantly higher than their spouse’s. This means their “half” of the assets are worth significantly less than they thought! It’s also important to consider when you will be using the assets you were awarded. For example, what’s worth more – $100,000 in an IRA account or $80,000 in a savings account? Well, it depends! What is your tax bracket and how much cash do you need today? If you need cash now, you are better off taking the $80,000 in a savings account. The $100,000 in an IRA is going to have taxes and possibly penalties taken from it so in the end the $100,000 is probably only worth about $65,000 or $75,000. If you don’t need this money for years, the $100,000 in an IRA will probably be better as it will grow tax deferred for many years and will be able to compound on itself quicker than a taxable $80,000 in savings.

2. Pensions are split 50/50 but no one knows what that really means.

Over and over and over I see divorce decrees that order pensions split 50/50 but no one has any idea what will actually happen. When do you start collecting? How much money can you collect when the pension begins? Is there an option to take a lump sum?

Did you inquire about a separate interest Qualified Domestic Relations Order (QDRO) where you can take the funds on your own timeline? Are you subject to your ex-spouses retirement wants or do you have a say in when the funds begin? Will there be a cost of living increase each year? What if you or your spouse dies before you start collecting? Will it still pay you?

Pensions are complex financial tools with variables many do not consider. In addition, the devil is in the details with the pension plans. Know what you are getting and your options!! If you have a pension you really need a financial expert on your team who understands pensions and QDRO’s so you can make informed decisions.

1. The biggest mistake – keeping a house you can’t afford.

As a woman I understand becoming emotionally attached to a home – this is where my kids have grown up and where we made many happy memories. This spot on the stairs or the place by the front door is where we took pictures every year on the first day of school. This is where I want my kids to come home to when they are grown with their own children. I get it!! It’s tough to leave the marital home if you have such strong emotional ties. However, time and time again my older divorcing couples are told by their adult children – don’t stay in the house!! We don’t care. We just want you to be financially healthy and strong.

As a financial expert, the first thing I’m going to ask my divorcees to do is create a monthly budget. What does it cost to live in this house? I have witnessed where one or two years down the road the spouse who “won the house” has run out of cash and realized that they can’t sell a window to put food on the table, they can’t refinance because now they don’t have enough income, and they have no choice but to sell. Further, the selling costs are about 8% of the sale – all of which could have been split 50/50 with a spouse if the house had been sold during the pendency of the divorce.

The sum this up, please realize you don’t know what you don’t know. Bring in the right experts for your divorce to make sure you are smart, you are informed, and you make the best decisions you can with all the information! Don’t go this alone. As we say at Divorce Strategies Group, “You only have one chance to get it right!” Let us help. Call today for a complimentary consultation to discuss your situation and let us help you start on the right path.

Health Insurance & Divorce

Health Insurance & Divorce

The issue of health insurance is critical in many divorces we see in our office. It is a key issue in any divorce when at least one party is under age 65 and without means to obtain their own health insurance. It can also be a significant issue with children who have graduated from high school but have not yet entered the work world to obtain their own health insurance. Thus, there are two areas where decisions should be made regarding health insurance and divorce: your child’s coverage and your coverage. Here’s a high-level overview of what to know and how to plan for coverage post-divorce.

Health Insurance, Divorce, and Children

When do you, the parent, stop being financially responsible for your child? Some parents believe it’s never; others believe it’s when your child turns 18 and some believe when the child graduates from college. People who are married disagree on this, so certainly people who are divorced will, too!

In a Texas divorce, minor children will be identified and the parent providing health, dental and vision insurance for the minor children will also be identified.  In a typical Texas divorce, child support and court ordered health insurance coverage ends when the child turns 18 or graduates from high school, whichever occurs later.

Currently, from a insurance company perspective a child can be covered by a parent’s insurance until they are age 26. After child support obligations are complete (again, either at age 18 or upon high school graduation), the parent can remove their child from health insurance.   Even though the insurance company will keep your children on your ex-spouse’s insurance plan, health coverage after high school graduation or age 18 may not fall under a family courts jurisdiction.  An ongoing parenting plan and/or a contractual agreement in this situation may benefit everyone.   We encourage all parties to discuss how they will handle health insurance for young adult children through college and even up to age 26 during the divorce process.  You’ll want to make these decisions while your attorney is present in the divorce process so you can understand what is legal and what is at least contractually enforceable.

Health Insurance, Divorce, and You

With an adult, it’s much simpler. A divorcing party must keep their spouse on their health insurance until the divorce is final – and then after finalization the ex-spouse must be removed from the policy.  As an ex-spouse you cannot stay on your former spouses policy.   However, you do have other options.

One option is to ask your attorney about extending the finalization of your actual divorce to extend your health benefits legally.  For example, we have had spouses finalize the details of their estate division with a signed Mediated Settlement Agreement (MSA) which finalizes the DETAILS of the divorce, but doesn’t officially make you divorced.  You can divide bank accounts and brokerage accounts and make agreements on how you will divide retirement accounts after the divorce with an MSA.  This gives you the peace of mind in knowing who gets what (the fight is over) but at least a little more time to keep your health benefits at a lower cost.   This option will have a limited time period, but it can give you a few more months while you find a job with benefits or find another source of health care.

Another option is to keep your current coverage via COBRA.   When going through a divorce, you can receive coverage with COBRA for 36 months.   The time period for COBRA is extended to the 36 month marker because of divorce versus the traditional 18 months when you leave a company.    Your soon-to-be-ex should contact the HR department for a summary of COBRA options and costs prior to divorce.   You ONLY have 30 days from the date of divorce to elect COBRA.

Since you would qualify as a “change of status,” you could also shop the Marketplace outside of open enrollment windows. If you’re looking for lower-cost options, you could consider health share programs such as Christian Health Ministries.  Finally, insurance brokers are wonderful resources to seek when looking for individual health coverage on the open market.

Next Steps

To wrap everything up, health insurance affects you and your children after a divorce and needs to be carefully considered. Take advantage of mediation so you and your soon-to-be ex-spouse can talk calmly about your children’s health insurance plans both after the divorce while child support is available and how you wish to continue their coverage into early adulthood. In addition, have a plan in place for yourself so you know your options post-decree and you aren’t caught without health insurance coverage.

If you need resources to help you with your financial needs or health coverage schedule a 30 minute complimentary consultation today with Denise French at Divorce Strategies Group.

Tax Stimulus Checks for Divorcing Couples

Tax Stimulus Checks for Divorcing Couples

On March 30, 2020, the Treasury Department and the Internal Revenue Service announced the distribution of stimulus package payments to account for the coronavirus pandemic. When it comes to this tax stimulus and divorce – there are often some questions.

What is the Tax Stimulus?

Payments are intended for taxpayers only, therefore, most qualifying recipients must have a social security number. There may be a minimal exception for members of the military.

Qualifying single adults who have an adjusted gross income of $75,000 or less will receive $1,200. Married couples with no children earning $150,000 or less will receive a total payment of $2,400. Taxpayers filing as head of household will receive full payment if they earned $112,500 or less. Those with dependents age 16 and younger will receive an additional $500 per dependent.

If your income is higher than the thresholds listed, then your payment will be reduced $5 for each $100 over the threshold until it stops altogether for single people earning $99,000 or more, or married couples without children who earn $198,000 or more.

You will not receive payment if someone claims you as a dependent, even if you’re an adult.

What If I Was Married For The Applicable Tax Filing, But I Am Separated From My Spouse Now?

Funds will be direct deposited based on the bank information from your 2019 tax filing. If you have not filed for 2019, then your 2018 filing will apply.

If you filed “jointly” with your spouse for the 2018 tax year, but have separated from your spouse since filing, then it is best to file your 2019 taxes as soon as possible. You will need to notify the IRS of your updated status of “separated” or “single”.

It is not likely that the IRS will have updated information for couples who have separated since their 2019 tax filing. Couples who filed jointly for the 2019 tax year but separated after filing, may need to coordinate division of the stimulus funds. If you cannot coordinate with your spouse, then seek an attorney to divide the funds appropriately. The IRS will be sending a paper notice in the mail detailing information about where your payment ended up and in what form it was made.

How Are The Payments For Children Allocated To Co-Parents?

For each qualifying child age 16 or under, there will be an additional payment of $500. The stimulus payments are based upon the 2019 tax filing. This means that if you claimed your child on your taxes in 2019, then you are likely to receive the $500 benefit for each child that you claimed as a dependent. If you have not filed taxes for 2019, then you should refer to your 2018 tax return.

The $500 stimulus payment for each child will go to the parent who claimed the child as a dependent in the most recent tax return.

Will I Receive Payment If I Am Behind On My Child Support Payments?

No. The Coronavirus Stimulus Bill has not waived offsets for past due child support. This means that if you owe back child support, then you may receive a decreased stimulus check or no check at all. If your payment is intercepted by the department of the treasury, then the funds will be given to the child’s custodial parent.

What if I was married with a high income in 2019 but didn’t qualify, but I will be single in 2020 and likely qualify for the credit?

The law says the rebate is technically an advance credit against your 2020 taxes (the return you’ll file in early 2021). Thus, it eventually will be based on your adjusted gross income, filing status, and kids under the age of 17 for 2020. That is as it should be—the financial situations of millions of people will be worse this year due to the unprecedented pandemic shock to the world economy.

But here is the win/win: If your tax year 2020 rebate turns out to be bigger than the amount you received this year, you will get the excess, which can generate a larger refund when you file next year.

However, you will not have to give back the payment if your rebate based on 2020 income turns out to be smaller than the amount you get this year. Thus, some filers may have an opportunity to strategically time their 2019 returns–if they have not filed already.

Tax Stimulus and Divorce: Stay in the Know

To check on the status of your stimulus check, visit the IRS website. If you believe that your spouse has inappropriately withheld your portion of the stimulus funds or you need more assistance regarding the tax stimulus and divorce, discuss options with your attorney. Need help with your divorce finances? Contact us today!

COVID-19 SMALL BUSINESS RELIEF PACKAGES – What Small Businsess Owners Need to Know

COVID-19 SMALL BUSINESS RELIEF PACKAGES – What Small Businsess Owners Need to Know

Thanks to the COVID-19 pandemic, many small business owners face uncertainty. To compound this uncertainty, the White House announced this weekend it will extend social distancing guidelines until the end of April. Thankfully the government also recently completed the passage of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). With a massive $2 trillion allocated for businesses, individuals, federal agencies, and state and local governments, the CARES Act has been designed to distribute capital quickly and broadly. There are a number of provisions that impact small businesses. The regulations (and interpretations of the laws formatted as rules) are fluid, however here is a guide to what you need to know about COVID-19 and small businesses.


This program was already in existence through the Small Business Administration (SBA). In early March, the SBA’s disaster loan program was extended to all small businesses affected by COVID-19, but the CARES Act opens this program up further and makes it easier to apply.

Eligible Businesses
  • Businesses with 500 or fewer employees
  • The term employee includes individuals employed on a full-time, part-time or other basis
  • Tribal businesses, cooperatives, and ESOPs with fewer than 500 employees
  • Non-profit organizations
  • Individuals operating as sole proprietors or independent contractors
Details to Know
  • EIDLs can be approved by the SBA based solely on an applicant’s credit score.
  • EIDLs that are smaller than $200,000 can be approved without a personal guarantee.
  • Borrowers can receive a $10,000 emergency grant cash advance that can be forgiven if spent on paid leave, maintaining payroll; increased costs due to supply chain disruption; mortgage or lease
    payments or repaying obligations that cannot be met due to revenue losses.
  • Expands allowable use to payroll costs, costs of group health care benefits during periods of paid sick, medical or family leave and insurance premiums; employee salaries, commissions or similar compensations; interest on mortgage obligations; rent; utilities; interest on other debt obligations incurred before the covered period.
  • Coverage period January 31, 2020 through December 31, 2020
  • Required to make good faith certification that the employer has been affected by COVID-19 and will use funds to retain workers and maintain payroll and other debt obligations
  • No requirement that applicant is unable to obtain credit elsewhere
  • Business MUST be operational on January 31, 2020
  • Must be used for:
    • Maintaining payroll to retain employees during disruption/slowdown
    • Covering increased costs due to interrupted supply chains
    • Paying rent/mortgage payments
    • Replaying obligations that cannot be met due to revenue losses
How to Apply

To apply for this loan visit the US Small Business Administration.  For everything you need to know about applying for a small business loan, see the U.S. Chamber’s Small Business Loan Guide.


The Paycheck Protection Program, one of the largest sections of the CARES Act, is the most important provision in the new stimulus bill for most small businesses. This new program sets aside $350 billion in government-backed loans. Currently, the SBA guarantees small business loans that are given out by a network of more than 800 lenders across the U.S. The Paycheck Protection Program creates a type of emergency loan that can be forgiven when used to maintain payroll and expands the network beyond SBA so that more banks, credit unions and lenders can issue those loans. The basic purpose is to incentivize small businesses to not lay off workers and to rehire laid-off workers that lost jobs due to COVID-19 disruptions.

Eligible Businesses
  • Businesses with 500 or fewer employees
  • Select types of businesses with fewer than 1,500 employees
  • The term employee includes individuals employed on a full-time, part-time or other basis
  • Tribal businesses, cooperatives, and ESOPs with fewer than 500 employees
  • 501(c)(3) non-profits with fewer than 500 workers and some 501(c) (19) veteran organizations
  • Individuals operating as self-employed, sole proprietors or independent contractors
  • Businesses, even without a personal guarantee or collateral, can get a loan as long as they were operational on February 15, 2020
Details to Know
  • IDLs can be approved by the SBA based solely on an applicant’s credit score.
  • The maximum loan amount under the Paycheck Protection Act is $10 million, with an interest rate no higher than 4%.
  • The lenders are expected to defer fees, principal and interest for no less than six months and no more than one year.
  • Generally speaking, as long as employers continue paying employees at normal levels during the eight weeks following the origination of the loan, then the amount they spent on payroll costs (excluding costs for any compensation above $100,000 annually), mortgage interest, rent payments and utility payments can be combined and that portion of the loan will be forgiven.
  • Required to make good faith certification the employer has been affected by COVID-19
  • No requirement of application being unable to obtain credit elsewhere
  • No prepayment penalty
  • No personal guarantee or collateral is required for the loan
  • Business must maintain its March 24, 2020 employment levels through September 30, 2020 as much as practicable, and in any case shall not reduce its employment levels by more than 10%.
How to Apply

To apply visit your local bank or credit union who are conduits for the Small Business Administration (SBA) Loan process. Most firms that already participate in the Small Business Administration’s Loan program will provide a place to apply. Be forewarned, you cannot get a loan for this as of this writing. The SBA lenders have 30 days to gather the documents they feel will be necessary to facilitate the loans. Most lenders should have this information available in the next week or so.

While you wait for the loan process to be available, make good use of this time. Gather documentation supporting your payroll expenses over the last 12 months, netting out the portion of salaries in excess of $100,000 as well as other business expenses – mortgage/rent, utilities, etc. You will also want to gather your business documents – corporate articles, partnership documents, Bi-Laws, or equivalent as that will also be necessary.


Yes, small businesses can get both an EIDL and a Paycheck Protection Program loan as long as they don’t pay for the same expenses. However, be sure to check with your financial advisor or lender before taking both types of loans if you are not sure of the specifics of regulations related to COVID-19 and small businesses.

COVID-19 and Small Businesses

Struggling to keep up with the ever-changing regulations for COVID-19 and small businesses? Check back here frequently for up to date information or contact us for all of your divorce financial needs.

What is a Certified Divorce Financial Analyst or CDFA?

What is a Certified Divorce Financial Analyst or CDFA?

It seems incredibly unfair that at a time when you are dealing with the emotional stress of separating from your spouse, you also have to deal with worrisome and complicated financial issues too. As much as any other time in your financial life, it is vital to get professional help with your money questions when you are experiencing a divorce. One person in particular who take a lot of weight off your shoulders is a Certified Divorce Financial Analyst or CDFA®.    For many clients, divorce is the largest financial transaction of their lives. The role of a CDFA® professional is to address the special financial issues of divorce and help litigants achieve a settlement that will work both today and in the future.


The Institute for Divorce Financial Analysts (IDFA™) is the premier national organization dedicated to the certification, education and promotion of the use of financial professionals in the divorce arena.  The IDFA sets the standards for all CDFA professionals.  The eligibility requirements for CDFA’s are established by the Board of Advisors and reflect the fact that a CDFA is not an entry-level designation but an advanced program.

Individuals with a minimum of three years of professional experience in finance or divorce and a Bachelors degree are eligible to enroll in the CDFA® Program. IDFA will accept ten years of professional experience from those candidates that do not have a Bachelor’s degree. This includes experience as a financial professional, accountant, or matrimonial lawyer. Candidates should also have working knowledge of financial calculators before purchasing the program.

Skillset of a Certified Divorce Financial Analyst

Divorce Financial Planning is the application of the discipline of financial planning to settlement strategies in divorce. The process requires the synthesis of tax, insurance, retirement and other areas of knowledge with their specific application to divorce. CDFA holders must possess experience with a and a strong knowledge base of a multitude of divorce related financial and legal issues, including:

• Personal vs. Marital Property
• Valuing and Dividing Property
• Retirement Assets and Pensions
• Spousal and Child Support
• Splitting the House
• Tax Problems and Solutions
• Expert Witness Testimony
• Tax Law and Financial Issues Affecting Divorce


Maintaining the CDFA Designation

Once a candidate completes the CDFA® course, the designation is valid for one year, after which a fee must be paid annually.  To assure continuing competency in tax codes, legislative and other ongoing developments in the field of divorce financial planning, a candidate must report 15 hours of divorce-related continuing education every two years.

Code of Ethics

The Code of Ethics and Professional Responsibility is provided as an expression of the ethical standards that IDFA has adopted and every CDFA professional has agreed to abide by. The code applies to every CDFA designee and candidate in conducting divorce-planning work.

1. Integrity: Maintain the highest standard of honesty and integrity when dealing with colleagues, IDFA, clients or lawyers.

2. Competence: In addition to satisfying the continuing education requirement needed to maintain the use of the designation, every CDFA professional should serve their clients competently. Therefore, acquiring the knowledge and skill necessary to do so in the area of divorce planning is required.

3. Objectivity: Objectivity requires a CDFA professional to be intellectually honest and impartial. Regardless of who hired him or her, a CDFA professional will always be objective when dealing with clients and their lawyers.

4. Fairness: To alleviate the risk of potential conflict of interest as well as to not confuse the public, CDFA professionals should separate their financial practices and their divorce-planning practices to ensure divorce-planning recommendations are made independent of the potential financial planning relationship.

5. Confidentiality: CDFA professionals shall hold client information to the highest standard of confidentiality. Short of client consent or appropriate legal process, a CDFA professional shall not release any information about their client before, during or after the divorce.

6. Professionalism: A CDFA professional’s interactions shall project the highest level of professionalism. Whether dealing with clients, lawyers, IDFA or any of its partners or subsidiaries, a CDFA professional will behave in a professional manner.

7. Scope: A CDFA professional, by education and training, is a specialist dealing in the financial issues of divorce. Working alongside the lawyer who is licensed to practice law, a CDFA professional must never (unless licensed to do so) advise clients on their legal rights.

8. Compliance: A CDFA professional will comply with all the laws related to the business they conduct and report to IDFA any actions by other CDFA professionals that are illegal or in violation of this code. In addition, a Certified Divorce Financial Analyst professional will comply with any requests from IDFA for information regarding any complaints brought against him or her. If IDFA, after comprehensive investigation, decides that either suspension or revocation of the CDFA designation is the proper remedy, a CDFA professional will comply with the order.

9. Unauthorized Practice of Law: A CDFA professional understands that in order to practice law, one has to be licensed. Under no circumstances will a CDFA professional represent that the IDFA certification is a license to practice law.

10. Support: A CDFA professional will always support our profession and IDFA as the main driving force behind the progress of the profession.  Additionally, a CDFA professional will not collude, debase or discredit IDFA or the profession


Do you need a CDFA?

Simply put, if you and your spouse have assets of significant value, the financial ramifications can be quite complicated. At this emotional time, it’s best to trust someone experienced with these kinds of issues rather than trying to learn on-the-fly. Money mistakes made at this time could have far-reaching consequences for your new life.

How do I find a Certified Divorce Financial Analyst?

The easiest way to enlist the services of a CDFA is to ask your divorce attorney for a recommendation. If you want to find one on your own, the Institute for Divorce Financial Analysts can help you locate an analyst in your area. Find them here.

You will likely find having one less thing to worry about—or several less things—during this difficult time is of tremendous value to you. A CDFA can lift some of the burden from your decision-making load.  Schedule an appointment today with Denise French, CDFA who not only has the professional experience to help you with the finances of your divorce, but she’s walked through her own divorce and can help you navigate yours.