Do You Need a Divorce Financial Planner?

If you’re considering a divorce, or in the middle of one, there are financial considerations you should not ignore. Working with a divorce financial planner could help ensure that you approach this major, emotional life transition with clarity.

A divorce financial planner is a financial advisor whose role is to collect and analyze a divorcing couple’s financial information to help their client make decisions when settling a divorce. Their role involves:

• Putting together a clear picture of the couple’s finances.

• Analyzing and explaining the implications of any potential divorce settlements.

• Advising their client (and their client’s legal team) on the long-term impact of any financial decisions made during the divorce.

• Helping their clients develop financial goals and build a plan for their next phase of life.

A divorce financial planner who is a certified divorce financial analyst (CDFA) has additional experience and training beyond that of a certified financial planner (CFP)^[0]

That expertise can be invaluable. 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, says B. Kelly Keydel, a CFP and CDFA with Wealthspire Advisors in Seattle. For clients, it’s like having “a guide and a partner at their side,” Keydel says.

A divorce financial planner typically works with your legal team, using their expertise to view your finances holistically and call attention to aspects that might otherwise be overlooked. According to Keydel, common ways a CDFA might do that 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 onto assets that may not objectively 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 taken care of.

A CDFA will gather as much information as they can about you and your spouse’s assets, liabilities, sources of income and any other details. They’ll also work to understand your goals so they can identify what financial pieces need to come together to support you and help you achieve your goals after the divorce. That may include:

• Determining if you’ll need spousal support to fill any income gaps.

• Exploring whether you’ll need additional training or education to qualify for career opportunities that would help you attain a sufficient income.

“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.”

Everyone’s financial situation is different. But there are some general ways to approach financial planning in a divorce that could help you feel more confident and supported.

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.”

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, maybe instead of taking spousal support over a number of years, you agree to a lump sum that you can reinvest. “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 all 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.

CDFAs remain a niche specialty. There were just 3,371 active CDFAs in 2022, according to the Institute for Divorce Financial Analysis, which trains and certifies CDFAs.

To find a divorce financial planner, start by asking 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 well with.

You may also be able to search for certified professionals through online membership organizations.

• 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.

No matter how you become acquainted with a financial professional, it’s important to vet them to ensure they have whatever certifications they claim to have and are in good standing with 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 IDFA’s search tool.