Divorce Divorce Financial Planning

Question 1

What is a 'Certified Divorce Financial Analyst' (CDFA)?

Accepted Answer

A financial professional trained to help clients understand the long-term financial impact of divorce settlements

Answer

An attorney who specializes in divorce law

Answer

A court-appointed accountant for dividing assets

Answer

A tax attorney who handles divorce-related tax issues

Question 2

Why is it important to consider tax implications when dividing assets in a divorce?

Accepted Answer

Different assets have different tax consequences, meaning a $100K IRA may be worth less than $100K in cash after taxes

Answer

Tax implications are irrelevant in divorce proceedings

Answer

Taxes are automatically forgiven upon divorce

Answer

Only assets over $1 million have tax implications

Question 3

What is a 'financial disclosure' requirement in divorce?

Accepted Answer

Both spouses must fully disclose all assets, debts, income, and expenses to the court

Answer

A requirement to hire a financial advisor

Answer

A court order freezing marital accounts

Answer

A report prepared by the divorce attorney

Question 4

What is the danger of 'hidden assets' in a divorce?

Accepted Answer

One spouse may receive an unfair settlement if the other conceals assets from the court

Answer

It is only a civil issue with no consequences

Answer

Only assets worth over $50,000 must be disclosed

Answer

Hidden assets are automatically discovered by the court

Question 5

What is a 'QDRO' used for when dividing retirement assets?

Accepted Answer

A court order that transfers a portion of a retirement account to the other spouse without tax penalties

Answer

Qualifying a spouse for government benefits after divorce

Answer

A document required to close joint bank accounts

Answer

An order requiring an employer to pay alimony directly

Question 6

What does 'liquidity' mean when planning finances after a divorce?

Accepted Answer

How easily an asset can be converted to cash to meet immediate financial needs

Answer

The total value of marital assets

Answer

The amount of debt owed after divorce

Answer

The monthly income available after alimony