Why a Certified Divorce Financial Analyst is Essential to an Optimal Financial Settlement

A couple’s finances constitute a large component of their divorce and can bring significant anxiety and stress. Most wonder how support will be determined, how marital property should be divided, whether they’ll have to divide their pensions or retirement accounts, and more. Unlike any other divorce professional, a Certified Divorce Financial Analyst (CDFA®) is uniquely equipped to address these issues.

What does a Certified Divorce Financial Analyst (CDFA) do?

A Certified Divorce Financial Analyst is a professional equipped with specialized knowledge in financial matters related to divorce. These experts undergo rigorous training and examination to earn their certification, making them well-versed in the intricacies of divorce finances.

CDFA’s help individuals and couples determine an optimal financial settlement agreement that helps answer the questions “will I have enough to pay my bills after the divorce” and “in the future, will I have sufficient net worth to meet my longer term objectives?” Assets are not all alike and shouldn’t necessarily be split 50/50 down the middle. Assets may be a mix of marital (subject to division) and separate, they have varying tax consequences, impact on cash flow, and rates of return. Thus, optimal settlements take into account taxes (income and capital gains), accurate valuations, and determination of what is marital vs. separate, and the short-term impact on cash flow, as well as the longer-term impact on future wealth. 

A CDFA can also help determine the right level of child support and alimony needed for the lesser-earning spouse to meet their post-divorce budgets. In most states, child support is based on state legislature guidelines based on the parents’ incomes, but they are just guidelines and only provide minimums. Alimony is a subjective determination based on a variety of factors including age, earning potential, and likelihood of future inheritances.

Benefits of Working with a Certified Divorce Financial Analyst

A CDFA empowers individuals to make informed financial decisions, avoid common pitfalls, and ultimately secure a more stable and equitable post-divorce future post-divorce. Let’s look more closely at some of the benefits of working with a CDFA.

1. Inform Financial Settlement Decisions

In essence, the CDFA acts as a financial compass during the divorce process, steering individuals and couples towards informed choices that guide them toward their future true north. This clarity goes beyond a mere snapshot; it extends to a detailed examination of their short and long-term priorities and goals along with an exploration of assets, debts, income streams, and potential future financial scenarios.

A CDFA’s focus on long-term financial planning is a forward-looking approach that transcends the turbulence of divorce proceedings. It ensures that clients not only secure a fair divorce settlement but also position themselves for a stable and prosperous financial future, laying the groundwork for a new chapter with confidence and foresight.

Cash flow is typically an immediate concern and a significant source of anxiety. So, the first step is to get a snapshot of the current financial situation,  including current spending. From there, the CDFA helps clients build a post-divorce budget based on their specific objectives and priorities. Next comes identifying future financial goals, e.g., buying a house, funding children’s or grandchildren’s educations, and retirement. We are then able to look at how various support and marital property division scenarios will affect their ability to meet these goals. The outcome of these exercises allows divorcing individuals and couples to make informed settlement decisions. Lawyers, judges, and courts don’t provide that kind of information and blind settlement decisions lead to lost opportunities and highly consequential financial mistakes. 

2. Safeguard Financial Assets and Income 

The Certified Divorce Financial Analyst’s role in asset protection becomes a linchpin in fostering financial resilience and ensuring that clients can embark on the next chapter of their lives with a robust and safeguarded financial foundation. Most divorcing couples avoid the possibility that alimony and child support could terminate upon the provider’s incapacitation or death. CDFA’s will work with you to determine if an alimony buyout will be in your best interests and examine such safeguards as purchasing life and disability insurance or establishing a trust for the children to reduce the risk of a financially catastrophic event.


Here’s a detailed example to illustrate the potential mistake of opting for periodic alimony payments over a one-time alimony buyout.

  • Spouse A earns significantly more than Spouse B.
  • The settlement options include alimony payments or a one-time alimony buyout.
Option 1: Periodic Alimony Payments
  • Alimony Agreement: Spouse A pays Spouse B $3,000 per month for 10 years.
  • Total Alimony Paid Over 10 Years: $3,000 x 12 months x 10 years = $360,000.
Financial Implications for Spouse A
  • Income Stream: Regular monthly payments provide a steady income.
  • Inflation: The value of the $3,000 monthly payment will decrease over time due to inflation.
  • Dependency: Financial dependency on Spouse B for the duration of the alimony payments.
  • Risk: If Spouse B’s financial situation changes (e.g., loss of job, disability), the payments might be reduced or terminated.
Option 2: Alimony Buyout
  • Buyout Amount: A lump sum, let’s say $250,000, paid to Spouse A instead of periodic payments.
Financial Implications for Spouse A
  • Lump Sum: Immediate access to a significant amount of money.
  • Investment Opportunity: Potential to invest the lump sum in a diversified portfolio or other investment vehicles.
    • Example: Investing $250,000 with an average annual return of 5% for 10 years.
  • Tax Implications: Depending on jurisdiction and laws, the lump sum might have different tax implications than periodic payments.
  • Financial Independence: No dependency on Spouse A for future payments.
  • Inflation: The lump sum can be invested to potentially outpace inflation.
Potential Mistake in Choosing Periodic Payments
  • Opportunity Cost: Spouse B misses out on the potential growth of the lump sum investment.
  • Financial Risk: Relying on Spouse B’s ability to make future payments.
  • Inflation: Decreasing value of the $3,000 monthly payment.

If Spouse B opts for the alimony buyout and invests the $250,000 lump sum with an average annual return of 5%, after 10 years, this investment could grow to approximately $407,224. This amount significantly exceeds the total of $360,000 that would be received from periodic payments.

  • Lump Sum = $250,000
  • Rate = 5% (or 0.05)
  • Years = 10

Investment Growth: The lump sum investment option potentially offers Spouse B a higher total return, assuming an average annual return of 5%.

  • Financial Independence: Choosing the lump sum also grants Spouse B immediate financial independence and flexibility, without relying on Spouse A’s future payments.
  • Risk Mitigation: It eliminates the risk associated with Spouse A’s ability to make future payments.
  • Inflation Protection: The investment can potentially outpace inflation, preserving or even increasing the purchasing power of the initial amount.

3. Avoid Financial Settlement Mistakes

There are many costly mistakes that can be avoided by working with a CDFA.

Example 1: Keeping the Marital Home

One of the most common financial mistakes that divorcing individuals make is keeping the marital home because of emotional attachment and/or desire to keep the children in the same neighborhood or school district. Keeping the house, though, can have serious financial consequences. Many do not anticipate the real cost of maintaining a house, e.g., unexpected repairs, taxes, or homeowners’ association assessments, the increased cost of a mortgage after refinancing, or they don’t fully appreciate the impact of foregoing the proceeds of the sale of the house.

  • Marital Home Value: $500,000
  • Remaining Mortgage: $300,000
  • Other Assets: $200,000 in savings, $300,000 in a retirement account

Spouse A decides to keep the marital home, while Spouse B takes the retirement account and half of the savings ($100,000).

Spouse A assumes the mortgage, taking full responsibility for the remaining $300,000 debt.

Financial Implications for Spouse A

  • Equity in Home: $200,000 (the home value of $500,000 minus the mortgage of $300,000).
  • Cash Assets: $100,000 (half of the savings).
  • Debt: Assumes the full mortgage of $300,000.
  • Liquidity: Low, as most of Spouse A’s assets are tied up in the home.
  • Maintenance and Upkeep Costs: Ongoing expenses for maintaining the home, can be substantial and often underestimated.
  • Property Taxes and Insurance: Continuing obligations that can be a significant annual financial burden

Challenges for Spouse A

  • Affordability: If Spouse A’s income is not sufficient to cover the mortgage payments, property taxes, maintenance, and other living expenses, they might face financial strain
  • Refinancing the Mortgage: Spouse A may need to refinance the mortgage to assume it solely, which could come with a higher interest rate or unfavorable terms
  • Lack of Diversification: Spouse A’s financial situation is heavily invested in a single asset (the home), which can be risky, especially if the real estate market fluctuates
  • Selling the Home in the Future: If Spouse A needs to sell the home, they might incur real estate fees, and if the market is down, they could sell at a loss. Also, the home’s equity might not have increased as expected

Financial Implications for Spouse B

  • Spouse B walks away with liquid assets ($100,000 in savings) and a retirement account worth $300,000, which likely will grow over time and is diversified
  • Spouse B has more financial flexibility and potentially less financial stress

With a CDFA ‘s guidance, individuals will be guided to accurately estimate future expenses and assess the impact on longer-term financial health.

Example 2: Treating All Marital Assets Equally

Another example of a mistake that can be avoided is treating all assets as essentially the same. Many couples strive for a 50/50 division of their assets but are they really dividing things equally? Not all assets (and debts) are created equally. Assets are taxed differently, have varying growth returns, and impact on liquidity. Consider this situation where the property division doesn’t consider taxes:

Total Assets: Let’s assume the couple has a total asset pool of $1 million, which includes a house valued at $500,000, a stock portfolio worth $300,000, and savings of $200,000.

  • House: Spouse A keeps the house (valued at $500,000). Usually, there might be capital gains tax considerations if the house is sold, but in this scenario, we’re not accounting for that.
  • Stock Portfolio: Spouse B receives the stock portfolio ($300,000). Normally, selling stocks might incur capital gains tax, but it’s not considered here.
  • Savings: The savings ($200,000) are split equally, giving each spouse $100,000.


  • Spouse with House: Spouse A has an asset worth $500,000, but if they decide to sell the house later, they might face a substantial tax bill, which hasn’t been accounted for in this division
  • Spouse with Stocks: Similarly, Spouse B has stocks worth $300,000. If they sell these stocks, they might incur capital gains tax, which can significantly reduce the actual value they receive from this asset
  • Savings: Both have liquid assets of $100,000 each, which are not typically subject to immediate taxes
  • Liquidity: Spouse A who kept the house and stocks might face liquidity issues as their assets are not readily convertible to cash without potential tax implications

Fairness: The division might seem equal in terms of gross value, but after considering taxes on the sale of assets, one of these spouses will likely end up with significantly less net value

Take Control of Your Future

When you consider divorce, or if you know someone who is contemplating divorce, one of the biggest realities for those in the divorce process is the financial settlement and financial analysis post-divorce. Get the assistance of Berni Stevens, a Mediator, Certified Divorce Financial Analyst® (CDFA®), and divorce coach.

Berni provides step-by-step guidance on matters related to divorce. With a wide range of experience and expertise related to divorce issues, Berni will simplify the process and provide much-needed clarity in areas such as long-term tax consequences, asset, and debt analysis, dividing pension plans, continued health care coverage, stock option elections, protecting support with life insurance, and much more. She can also guide you through building an effective parenting plan, and getting your divorce processed through the court.

Schedule Your Complimentary Divorce Strategy Session Today!

11 Costly Financial Mistakes in Divorce Settlements


11 Costly Financial Mistakes in Divorce Settlements

Divorce is expensive even without mistakes and getting comprehensive guidance on divorce financial planning is critical. Read on to learn of the top eleven most common financial mistakes made in divorce.

1. Mis-Specifying Marital vs. Separate Assets

What’s considered marital property and subject to division? Most will say that any comingling of assets (e.g., depositing the funds in a joint account or using marital funds to pay the mortgage) constitutes an asset as marital. And in some states and counties, even if a portion of an asset that was separate on the date of marriage will, over the years, transition to marital. This can impact considerations of real estate, retirement, inheritances, and more.

2. Dividing Each Asset 50/50

Too often, lawyers, hearing officers, and judges take the easy way out by forcing division of each asset equally. Why? It’s easy and not easily challenged. This approach, though, fails to consider the needs and wants of each spouse, as well as the tax consequences of and administrative effort in dividing each asset.

3. Not Considering an Alimony Buyout

No one likes alimony. Payors hate writing the check and the recipient hates depending on it. Plus, if the payor dies or is disabled, the payments stop (an example of why insurance is important post-divorce). Instead, if there are sufficient assets to cover it, calculate the present value of the stream of anticipated payments at an appropriate discount rate and build it into the division of assets.

4. Errors in Valuing Executive Compensation

If there’s one financial topic that befuddles many, it’s how to treat deferred compensation, including stock options, both qualified and not qualified, as well as restricted stock and restricted stock units. Are they marital or separate? Are they based on past or future performance? Can they be transferred to a spouse/former spouse? What is the correct valuation method: intrinsic value, Black-Scholes, or the binomial method? How are taxes accounted for?

5. Not Considering the Possibility of Hidden Assets

Given the opportunity and motive, many a spouse will start stashing away funds in anticipation of a divorce, whether for financial security, sense of ownership, or vindication. Tax returns, W-2’s, credit card statements, and bank account statements are all sources to identify diverted funds. Even when not suspected by a client spouse, a quick review of these documents may reveal otherwise unidentified assets.

6. Not Looking at Creative Settlement Options to Meet Each Spouse’s Unique Needs

What if a spouse wants to keep the house for and can’t get approval for a mortgage buyout? It’s easy to just say “sell” and move on, but there are ways to facilitate the desire of a spouse who wants to remain in the home for a period without undue legal or financial burden to the co-owner spouse. As another example, maybe retirement funds are of utmost concern and alimony/cash flow not so much? A skilled divorce financial expert will come up with alternative settlement options to address the unique needs of each spouse.

7. Mistakes in Retirement/Pension Valuation and Division Orders

Retirement plans, and especially pensions, are widely misunderstood in divorce. The one who’s name is on the retirement plan thinks they are the rightful owners. Some incorrectly think the “current value” on a pension statement is the value of the pension. Pensions of all kinds, and especially military and federal pensions, require an expert for valuation and drafting of appropriate orders for submission to the custodian.

8. Failing to Consider Tax Consequences

All assets are not alike when it comes to splitting them in divorce. $250,000 in a 401k is not the same as $250,000 of equity in a house. The former is taxed at an ordinary income tax rate upon withdrawal while the latter may be largely excluded from any taxation and otherwise taxed at the capital gains rate.

9. Allowing One Spouse to Keep the House When it’s Not Financially Feasible or Beneficial

The marital home is an asset laden with emotion and sentimentality. It’s common to want to keep the house for emotional stability without consideration of the impact on future financial health. Houses don’t necessarily appreciate significantly over time, maintenance expenses are often overlooked or discounted, and a house is not a liquid asset. An objective evaluation is critical before deciding to keep or sell the marital home.

10. Not Properly Accounting for a Closely Held Business

If a spouse owns a business, is it a source of income, an asset to be valued and divided, or both? If a source of income, do we just look at the tax returns for the business? If to be valued, do you pay a business valuation expert thousands of dollars to get an accurate figure? Get the advice of a divorce financial expert is necessary if one of the spouses owns a business.

11. Not Accurately Budgeting for Your Post-Divorce Life

Do you have a good hold on where your money goes? Have you really assessed how much you will need post-divorce? Your choice in divorce settlement options needs to be balanced between short-term cash flow needs and long-term net worth.

Work with a qualified divorce financial professional, i.e., a Certified Divorce Financial Analyst® (CDFA®) to help you avoid costly mistakes in divorce. You only get one chance to get it right.

Take Control of Your Future


When you consider divorce, or if you know someone who is contemplating divorce, one of the biggest realities for those in the divorce process is the financial settlement and financial analysis post-divorce. Get the assistance of Berni Stevens, a Mediator and Certified Divorce Financial Analyst® (CDFA®.)

Berni provides step-by-step guidance on matters related to divorce. With a wide range of experience and expertise related to divorce issues, Berni will simplify the process and provide much-needed clarity in areas such as long-term tax consequences, asset, and debt analysis, dividing pension plans, continued health care coverage, stock option elections, protecting support with life insurance, and much more.

Schedule Your Complimentary Divorce Strategy Session Today!

How to Win in Divorce

In a recent post, I addressed the notion of “winning” at divorce. There are many lawyers who claim they can do just that, and they will be happy to take your hard-earned money while they fight your war for you. The reality is, in the vast majority of cases, you’ll wind up no better off than if you’d negotiated to begin with, and all the while you’re funding your lawyer’s kids’ college education instead of your own. 

Winning might instead be viewed as getting through this divorce transition with integrity, keeping more of your own money, and maintaining your and your children’s emotional health throughout. Ideally, you’ll do this without ever stepping foot into a courthouse or even speaking to an attorney. 

So, how do you get better outcomes, at a lower cost and without judges, courts, or even lawyers? If you have minor children and marital assets, don’t attempt a do-it-yourself divorce unless you want to risk costly mistakes that cannot later be reversed. If you want an easy, affordable, and legal solution, seek a qualified divorce mediator. 

You will want to find a mediator who has the knowledge, skills, and experience to guide you and your spouse to a financially optimized settlement agreement and, if applicable, with a parenting plan that preserves the integrity of your family. A mediator with the divorce financial expertise of a Certified Divorce Financial Analyst (CDFA®) is ideal. 

How, though, to address the legal piece of your divorce? You will find that legal agreements and divorce papers are straightforward in a mediated case. These can be easily facilitated by your mediator so that you never even have to work directly with an attorney to process your divorce. (It’s never a bad idea, though, to have an attorney review your agreements before they are finalized, and this can be done at a minimal cost.)

Rationally approaching your divorce, along with a dose of grace, can result in a lower-cost and faster process while addressing your financial needs and preserving your family’s emotional well-being. Now, wouldn’t you agree this would be a “win” at divorce?

Making Time for You: How to Make Time for Yourself

Divorce is a truly hard and difficult process that impacts many facets of life including our social circles, finances, and even our sense of identity. To adapt to this transition, it’s essential to schedule time for self-care. I say schedule because that’s just how intentional doing self-care during your divorce is. In order to have the stamina to find a new living situation, research affordable childcare, or land a new job, you’ve got to carve out time that’s just for you. 

How to Make Time for Yourself


Move your body! Movement provides an outlet for stress and anxiety and gives a safe place for these (valid) emotions to go. In addition, regular exercise promotes healthy sleep and improves your mood. Divorce is a long-distance sport, so keep your strength by pumping your heart rate up for at least 15 minutes, three times per week. Most importantly, let go of any predetermined notion of how your body should be looking right now, and exercise for the lasting health benefits and confidence it builds.


While it may feel daunting at first, introducing a meditation practice into your routine is a core self-care tool. Meditation can take many forms, including walking meditations, repeating a mantra, or guided breathing exercises, so don’t feel like you have to look or dress a certain way to practice. Ultimately, meditation encourages our awareness of the present moment, helping us to safely feel our bodies and provide refuge in a sea of emotions without judgement.


Therapeutic activities like journaling is another great grounding technique to keep you rooted in the present. Gurus and scientists alike agree that writing a list of what we are grateful for — especially first thing in the morning — can instill a sense of optimism and sustain us through the hurdles of the day. Keeping a journal during your divorce can also provide catharsis in the future, a testimony to what you accomplished; your hard won freedom.

Recreational Reading

Give your brain a break from the divorce lingo and the parade of emails. Having a solid fiction book to dive into is a readily accessible form of relaxation, even for the busiest of minds. A reading ritual is just as much about the material as it is the setting, so use this time as an intentional space set aside where you can find some quiet, free of distractions.

Relaxing Bath or Shower

When depression looms, self-grooming can go out the window. Scheduling time for a luxurious bubble bath might seem ridiculous, but not if you’re serious about staying sane. Combine this time with your recreational reading, or don’t! It’s your self-care ritual, relaxation is the only requirement. Incorporating essential oil blends like spearmint, eucalyptus, and lavender are a perfect addition to soothe your sinuses. Candles make things feel official and can transform just about any space into a sanctuary.

A Balanced Diet

Stress can deeply affect your appetite, especially when facing separation. It’s important to create systems in your home that will help you eat regular meals to maintain your blood sugar level and a stable mood. A diet full of leafy greens and energy-packed fats like avocado and ghee is the most nutritious, but can be challenging to sustain. This means maintaining a healthy diet might require setting aside an afternoon for meal prep or making batches of comfort foods like lasagna that can be easily heated up when you don’t feel like cooking. Whatever your optimal diet is, try to focus on the idea of nourishment while eating instead of distracting yourself with devices and screens.

A Divorce-Free Zone

Spending social time without dominating the discussion with your divorce is not only essential for your well-being, but your friends’ as well. Divorce doesn’t need to define you, and playing the broken record of how crappy your ex is, well, crappy to listen to. Protect your social circle and make a point to be present with your friends. Using this transition as an opportunity to check out some local activities you’d normally slough off can be a great way to stay socially active; I’m talking Zumba, farmer’s markets, that Persian restaurant you haven’t tried, all of it. You’re discovering the new you after all! 

Hopefully this list not only offers advice after a breakup but gives you some blueprints on how to design your own divorce self-care routine. These rituals will serve you best if you approach them with a sense of curiosity; these practices should not be punishments. If you’d like to check out other guides on how to survive your divorce, download my free ebook here.

Making Time for You: Self-Care During Your Divorce

Divorce is a truly hard and difficult process that impacts many facets of life as social circles, finances, and even our sense of identity changes. In order to adapt to this transition, it’s essential to schedule time for self-care. I say schedule because that’s just how intentional providing self-care during your divorce is. In order to have the stamina to find a new living situation, research affordable childcare, or land a new job, you’ve got to carve out time that’s just for you. 

Importance of Prioritizing Self Care

This is a marathon, not a sprint

Scroll Instagram for a few minutes and the hashtag #selfcare will have you believing it’s something you buy online; week-long tropical retreats, lavish skincare routines, pricey juicing cleanses…keep scrolling. Self-care is ultimately the choice to take care of yourself, despite the constant demands of a society that wants you to address everything else first, before attending to your needs. Each time you practice a form of self-care, you send and reinforce the message that you matter, that you deserve to feel good in your mind and safe in your body. That you are enough all on your own.

Sound Decision-making

Most of the decisions you make during your divorce will have long-term consequences. So bring in the reinforcements — all the self-care practices that help keep you grounded during times of uncertainty. As imperfect human beings, our inner world mirrors our external one. By taking the time out of our busy lives to pause before beginning yet another task sets us up for being present with our emotions, allows us to identify and name them, and with that presence we can then tap into the compassion necessary to accept them as they are. Operating from a place of self-care, and therefore, self-compassion, helps prevent you from making reactive decisions out of anger or fear. Because it’s what we do with the emotion that matters, and really the only thing we can control.

Better Parenting

You may be tempted to cut corners with your kids during a divorce, but healthy and consistent ground rules during this time is the best advice for separating with children – you’re making choices that will affect your child’s well-being, choices that can also impact your custody plea if your divorce goes to court. Establishing a parenting schedule is key to offering a stable structure your child can depend on and can help limit the cause for anxiety. Strong boundaries surrounding sleep, meals, and hygiene for both you and your family is a baseline for any positive routine. Start there, and move towards negotiating more complex co-parenting agreements from the same page.

Psychological Well-being

A self-care regiment prevents catastrophic thinking, helping you stay grounded throughout the divorce. This entails the ability to flex those strong boundary muscles, especially if you’re still having to cohabitate with your soon-to-be-ex partner. As traumatic arguments may arise during this time, it’s necessary for your psyche to have a plan of action to cope. This doesn’t mean turning to a bottle of Proseco or editing your Bumble profile. Instead, focus on nurturing yourself by having multiple self care methods in your tool shed and ask for help when you need it.

Physical Health

Self-care involves taking care of your physical self as much as it does your mental. By eating a healthy diet, getting sufficient rest, and exercising at least three times per week, we can prevent our nervous system from hyperactivity, or getting stuck in a constant mode of flight or fight. A hyper vigilant nervous system is in a state of reactivity, rather than response, and remaining in this condition for too long can lead to stress-induced symptoms like inflammation, GI tract issues, skin rashes, or auto-immune system flair-ups. 

Performance at Your Job

Making time for your self care in your off hours immeasurably paves the path of least resistance during your work hours. If you’re feeling tired from a lack of quality sleep or suffering from a lot of negative internal rumination, it will ultimately show up in your interactions and relationship with your work. By taking the time necessary to practice self-care, you’re reinforcing your ability to compartmentalize the divorce from your employment. This can prevent you from emotionally spiraling and threatening your job security when you surely need it most.

Quality of Your Relationships with Friends and Family

Now’s the time to restrict who has access to you. If you have toxic family members or friends who feed on drama, a solid dose of distance during your divorce can prevent unreliable points of view from clouding your judgement. If you’re around people who push you to be a better person, you will be. If you’re around a cohort who deal with their emotions using drugs, alcohol, and risky sexual behavior, however, the consequences can be disastrous to your divorce proceedings and custody plea. 

Hopefully this list not only offers advice after a breakup but gives you some blueprints on how to design your own divorce self-care routine. These rituals will serve you best if you approach them with a sense of curiosity; these practices should not be punishments. If you’d like to check out other guides on how to survive your divorce, download my free ebook here.