The Role of Certified Divorce Financial Analysts in Divorce Proceedings

Are you involved in a Colorado divorce or family law proceeding involving divorce or dissolution of marriage? An experienced Colorado Springs, divorce attorney can guide you through the legal process and assist you in exploring your options. You have one bite at the apple in the court system so make it count.

A Certified Divorce Financial Analyst (CDFA) is a specialized financial professional who provides expert analysis and guidance to individuals navigating a financially complex divorce. CDFAs have advanced training in the intersection of family law and financial planning enabling them to assist clients, attorneys, and courts in understanding divorce financial matters.

CDFAs serve as financial experts who analyze marital assets, liabilities, income, and expenses to help divorcing parties make informed decisions about property division, spousal maintenance, and post-divorce financial planning.

CDFAs assist in identifying all marital and separate property, including:

• Real property (primary residence, investment properties, vacation homes);
• Retirement accounts and pension benefits;
• Business interests;
• Investments
• Personal property and collectibles
• Bank accounts, and more

They determine valuations of these assets, often collaborating with business valuation experts, real estate appraisers, and actuaries.

CDFAs prepare detailed analyses of each party's income from employment, self-employment, retirement benefits, rental income, investments, capital gains, trusts, social security benefits, disability benefits, and other income sources per C.R.S. 14-10-114. They also evaluate reasonable expenses and financial needs, helping to establish each party's standard of living during the marriage and projected post-divorce needs. This type of analysis can be especially important for spousal maintenance determinations, as courts must consider the amount of each party's gross income, marital property apportioned to each party, financial resources, and reasonable financial need as established during the marriage in determining what amount of spousal maintenance should be awarded. C.R.S. 14-10-114

CDFAs model various property division scenarios to illustrate the financial consequences of different resolution options. Colorado law requires courts to divide marital property equitably after considering factors including each spouse's contribution to acquisition of marital property, the value of property set apart to each spouse, and the economic circumstances of each party at the time of division. The analysis helps parties understand:

• The tax implications of transferring different types of assets
• The liquidity and accessibility of various assets
• The long-term growth potential or depreciation of assets
• How different division scenarios affect each party's net worth and cash flow

CDFAs possess specialized knowledge regarding the division of retirement benefits, which may include such assets as defined benefit pensions, 401(k) plans, Thrift Savings Plans, etc.

CDFAs prepare detailed calculations and projections related to spousal maintenance (alimony), including an:

• Analysis of each party's income, earning capacity, and financial resources;
• Evaluation of reasonable financial needs;
• Modeling of guideline maintenance amounts and terms under Colorado law;
• Cash flow projections showing the impact of different maintenance scenarios; and
• Analysis of the interplay between property division and maintenance.

Colorado law requires courts to make initial findings concerning gross income, marital property apportioned to each party, financial resources, and reasonable financial need before determining maintenance. C.R.S. 14-10-114. CDFAs can provide the detailed financial analysis to support these findings.

CDFAs help clients plan for financial stability after divorce by:

• Creating post-divorce budgets and cash flow projections;
• Analyzing insurance needs (life, health, disability, property);
• Assessing credit implications and debt management strategies;
• Planning for retirement and long-term financial security Services

CDFAs may testify in court as expert witnesses on the parties’ finances. When serving as an expert witness, a CDFA may prepare written reports and testify at hearings regarding property division scenarios and maintenance calculations as well as for other matters.

CDFAs may be retained by one party as a consulting expert, or jointly selected by both parties to provide a neutral analysis. A retained expert witness must provide a written report that includes a complete statement of all opinions to be expressed, the basis and reasons for those opinions, the data considered, references to supporting literature, exhibits, qualifications, fee information, and a listing of other cases in which the expert has testified. C.R.C.P. 26

They may also be appointed by the court under C.R.E. 702 as expert witnesses qualified by their specialized knowledge, skill, experience, training, or education to assist the trier of fact in understanding financial evidence. C.R.E. 702. While many attorneys are familiar with divorce financial matters, most are not financial experts.

Janko Family Law CDFA Testimony Case Example – The firm utilized a CDFA to examine documents to determine the existence and amount of trust income that initially had not been disclosed by a Father in a child support modification matter. The CDFA reviewed documents, conducted an analysis, wrote a report and testified in court. The court relied on the testimony provided by the CDFA to make a determination about trust income available for support.

CDFAs support settlement negotiations by:

• Preparing financial disclosure summaries
• Creating visual presentations of complex financial data
• Modeling scenarios to evaluate settlement proposals
• Facilitating informed decision-making

CDFAs can reduce anxiety for clients by creating comprehensive financial pictures, forecasting post-divorce financial positions, and helping clients develop realistic expectations and plans.

Turning Change Into Opportunity in Colorado Springs Divorce and Child Custody

A highly knowledgeable and experienced Colorado Springs divorce attorney can guide you through Colorado Springs divorce and child custody matters by negotiating, mediating and litigating on your behalf. You can focus on moving to a better future instead of spending your time attempting to navigate complex legal rules and procedures.

Sabra Janko from Janko Family Law has more than 20 years of legal experience and has written “the book” on Colorado divorce and family law – “Colorado Family Law With Forms”, published by LexisNexis, which you can find at here. Contact us at 719-344-5523 or complete our online scheduling request for a free 30-minute informational consultation. We also offer paid advice sessions for a more in-depth analysis of your case.