Do You Need a Divorce Financial Planner (CDFA)? When to Hire One

While the legal side of a divorce ends the day the papers are signed, the financial side rarely does. Decisions made about retirement accounts, the split of a family home, future spousal or child support, and more can shape your finances for years to come.

A financial advisor who specializes in divorces can be a key resource in this moment, helping you approach this major, emotional life transition with clarity.

What does a divorce financial planner do?

A divorce financial planner collects and analyzes financial information to help clients make decisions when settling a divorce. Many carry the certified divorce financial analyst (CDFA) credential, which signifies they have specialized training in the financial issues that arise in divorce ^[0]

A divorce financial planner typically works with your legal team. With a holistic view of your finances, they can analyze and explain the implications of potential divorce settlements, as well as advise on the long-term impact of financial decisions made during the divorce.

That expertise can be invaluable, according to B. Kelly Keydel, a certified financial planner (CFP) and CDFA with Wealthspire Advisors in Seattle. Not only does a CDFA have the knowledge and skill to provide useful information to you and your legal team, but they also can offer insight and advice on how to act on that information. For clients, it’s like having “a guide and a partner at their side,” Keydel says.

When to hire a divorce financial planner

If you're uncertain or unaware of what assets you own, how much debt you have, what money you're legally entitled to or how much money you might need to support yourself as a single person, it may be time to meet with a divorce financial planner. According to Keydel, common ways a CDFA might help include:

• Identifying important but sometimes forgotten sources of income that should be part of any settlement, such as equity compensation or a pension. 

• Evaluating the long-term consequences of holding assets that may not fit into your new financial picture, such as a family home.

• Balancing the mix of liquid and illiquid assets you’ll own after the divorce to ensure your short- and long-term financial needs are met.

• Determining if you’ll need spousal support and evaluating your new insurance needs.

• Helping you build financial goals and a plan for life after divorce.

“It's bringing all of these different pieces together and looking at it in a very comprehensive way so that someone who is either thinking about, or in the midst of divorce, has a very robust, full picture of where they are,” Keydel says. “Ultimately, they're going to be in a position to make much better decisions before the divorce is final.”

» Learn more: How much does a financial advisor cost?

Financial planning tips for divorce

Everyone’s financial situation is different. But there are some ways to feel more confident and supported during a divorce.

• Talk to a financial pro early. If a CDFA comes into the picture early, they’ll have more time to “dig in” and understand your situation, Keydel says. They may have you take some basic financial planning steps, including opening your own bank account or credit card, or taking other steps to protect your credit score. And they’ll begin collecting documents. “If a CDFA is brought in by an attorney and the process is already underway, there may not have been the opportunity to be as proactive,” Keydel notes.

• Be open to creative solutions. It’s common for people to become too focused on one particular outcome. But sometimes there’s a different, more advantageous solution, Keydel says. For example, instead of taking spousal support over a number of years, consider a lump sum that you can invest. “It relieves a point of contention,” she says.

• Adjust your lifestyle expectations. It’s common for lifestyles to change after a divorce. If you’re ready for that change, you may have an easier time finding a way to live the life you want under new circumstances. Keydel says a financial advisor can play an important role in supporting you as you imagine that new life.

• Think long-term. As difficult as it may be to picture the next phase of your life, it’s critical to plan for it because the details will impact the negotiations during the divorce, Keydel says. “It may take a couple of years, but at some point [the divorce] is going to be over, and then you have the rest of your life.”

• Lean on your team. Figuring out those details, staying objective, moving forward — it takes a lot of energy and expertise. “Having a team is very critical,” Keydel says. Whether it’s legal, financial or emotional, having the right people with you as you walk through a divorce can help.

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How to find a CDFA or divorce financial planner

• The Institute for Divorce Financial Analysts has a tool that allows you to search for a CDFA near you. 

• The Association of Divorce Financial Planners provides a searchable database of its members, which can be filtered to show professionals who hold specific licenses, such as a CFP or CDFA.

• Ask people you trust. Good friends, as well as family or divorce attorneys, may be helpful resources who could refer you to a CDFA or other financial planner they've worked with.

No matter how you become acquainted with a financial professional, it’s important to vet them to ensure they have the certifications they claim to have and are in good standing with regulators and professional licensing organizations.

• See an investment advisor's employment record, including any disciplinary actions, on FINRA's BrokerCheck website.

• Verify an advisor’s CFP certification through the CFP Board.

• Verify an advisor’s CDFA certification through the CDFA’s search tool.