.png)
When navigating divorce, most people focus heavily on finding the right attorney. While legal representation is essential, there's another professional who could significantly impact your financial future: a Certified Divorce Financial Analyst (CDFA). In our recent conversation with Josephti Cruz from The Wealth Garden Financial Services, we explored how specialized financial guidance can transform your divorce experience and long-term financial wellbeing.
Subscribe to The Divorce Planner's newsletter and get divorce prep tips and tools delivered right to your inbox!
Understanding the CDFA's Role in Divorce
A Certified Divorce Financial Analyst specializes in the financial aspects of divorce. Unlike general financial advisors, CDFAs have specialized training in divorce-specific financial issues and understand how to navigate the complex intersection of divorce law and financial planning.
As Josephti explained during our conversation, "A CDFA basically is the number cruncher on a divorce team. A lawyer does legal stuff. They know basics of divorce finances. And then a CDFA knows the financial part of a divorce and knows the basics of the legal stuff. So if you get both of them together, that's a powerhouse team. If you only have one or the other, you might be missing something."
Josephti's own experience highlights why this expertise matters: "I voluntarily gave money away because I missed something. My consulting attorney gave me the wrong financial information. Based on that incorrect information, because she's a legal person, not a financial person, I gave money away."
The Timing Question: When to Involve a Financial Expert
One of the most valuable insights from our discussion was learning about the optimal time to engage a CDFA.
"You bring them in as early as possible," Josephti advised. "When you have all your documents... I would say if you're really trying to save money, try to prep your documents yourself or with Alex. So that's what you could do for yourself, and then once you have a complete financial picture, then try to bring in that CDFA to talk about settlement options, property divisions, separate property tracing, all that stuff."
She emphasized that waiting too long can lead to costly mistakes: "The most costly financial mistake—it's been happening a lot actually—people reach out to me after they've already partially settled their assets. It's like, 'Alright, I already got X, I got half a million from this house, what else do I need to do?' And it's like, 'Well, I don't know if that was the right asset for you to get... it's done already.'"
Alex Beattie added, "Before the ink is dry, before you've even signed anything, I think that it's good to start early."
Attorneys and CDFAs: Complementary Expertise
During our conversation, Josephti highlighted an important distinction that many divorce clients miss: attorneys and CDFAs serve different but complementary roles.
"A lawyer does legal stuff, so they know basics of divorce finances. And then a CDFA knows the financial part of a divorce and knows the basics of the legal stuff," Josephti explained. This distinction becomes particularly important when making decisions about complex assets or evaluating settlement offers.
Critical Financial Considerations in Divorce
Perhaps the most insightful part of our discussion centered on common financial oversights during divorce when people don't have proper financial guidance.
The Family Home Decision
The family home often represents both significant financial value and emotional attachment, but keeping it isn't always the best financial decision.
Josephti shared her own experience: "I was like, I'm gonna take this house, I can afford it, and then five minutes later after his name was off of the title, I realized like, I might have to sell this and now I've lost half of that capital gains exclusion."
This led to a discussion about creative solutions: "These are the types of things that we talk about together... Is it advantageous for one person to take the whole house and lose $250,000 of those capital gain exclusions only to find out a year later that you can't afford the house?"
Sometimes, creative solutions might include "keeping the spouse on just for technicalities, just for this exclusion, for a year or two."
RESOURCE ALERT: Before making any decisions about keeping your family home after divorce, read "Four Questions to Answer Before Keeping the Family Home" on The Divorce Planner blog. This guide will help you make this significant financial decision with clarity and confidence.
Understanding Complex Assets
Our conversation also touched on retirement accounts, pensions, and other assets that require specialized knowledge to divide properly.
When asked about difficulty getting pension information, Josephti noted, "I can calculate that stuff too, and then the QDRO specialist, from my understanding, is the one that writes out the document to send to the pension."
Alex emphasized the importance of full financial disclosure: "You can't negotiate assets that are hidden because you don't have all the information, all of that needs to come out during the financial discovery process."
RESOURCE ALERT: Concerned about hidden assets in your divorce? Check out our in-depth interview with Josephti Cruz about "How to Find Hidden Assets During Divorce" on The Divorce Planner blog for practical strategies to ensure all marital assets are properly identified.
Looking Beyond the Settlement: Financial Independence
Josephti's approach to divorce financial planning doesn't stop at the settlement. As both a CDFA and wealth management advisor, she takes a long-term view.
"The way I view when I help clients through a divorce is I'm really looking long term for you," she explained. "I help clients, should they want to be helped, through divorce and beyond divorce. Like, let's leave that divorce behind you and let's start this new life and get you on solid financial footing and get you living the life, a new life that you're going to love and appreciate."
She continued, "I look at it from both ways. Let's get you through this divorce fairly, equitably, and realistically, and then beyond that, okay, what are you going to end up with? Let's maximize that so that you'll be able to have fun with your kids, retire someday, and not be financially scared anymore and be more financially empowered going forward."
Alex agreed with this forward-looking approach: "Divorce is really an opportunity to set the foundation for what your life is going to look like after divorce... We're not here just to help you during the divorce process. We're giving you the blueprint for your life after so that you understand what your budget is, you anticipate any kind of gaps that you're going to have in advance so that you're not panicking."
Managing Emotional Overwhelm During Financial Planning
Financial planning during divorce doesn't happen in an emotional vacuum. When asked about feeling overwhelmed by the financial aspects of divorce, Josephti offered practical advice:
"Take it one step at a time. Part of the divorce team is a therapist. I leaned heavily on my therapist at the time because I just needed to spill my guts out, whether it was rational or irrational, logical or illogical. You know what? Who cares, let's not even judge ourselves."
For the financial aspects specifically, she recommended, "Another way to help yourself not be as overwhelmed is, you know, just take it one step at a time. What are you spending today? You could take 30 days, 45 days, and just track every single day, 'What did I spend my money on today?' Instead of trying to piece together a one-month budget in an hour."
Alex added, "It is all overwhelming, and here's the news: you don't have to be an expert in everything. All you have to do is take one little step. Even by listening to this conversation, you're already investing in educating yourself, and that's part of it."
RESOURCE ALERT: Not sure if divorce is the right decision for you? Read "18 Questions to Answer If You're Considering Separation or Divorce" on The Divorce Planner blog to gain clarity on this important life decision.
An Exciting New Approach to Divorce Financial Planning
Looking ahead to spring 2025, Alex shared an exciting development: "I'm excited to tease that Josephti and I are actually building out a package where you get the two of us at a much more reasonable cost than normal that we'll be launching in the next few weeks, so stay tuned for that."
This innovative offering will provide clients with seamless support for both the emotional and financial aspects of divorce—a holistic approach to navigating this challenging life transition.
Taking Control of Your Financial Future
As our conversation with Josephti made clear, divorce represents not just the end of a marriage but a critical financial transition point. The decisions you make during this process will shape your financial reality for years to come.
From understanding the true value of assets to planning for long-term financial security, working with a CDFA provides expertise that complements legal advice and helps secure your financial future beyond divorce.
Resources Mentioned in This Conversation
To help you navigate your divorce journey with confidence, check out these valuable resources:
Four Questions to Answer Before Keeping the Family Home - Essential guidance for making this significant financial decision
How to Find Hidden Assets During Divorce - Strategies for ensuring all marital assets are properly identified
10 Questions to Answer If You're Considering Separation or Divorce - Clarity for those at the decision-making stage
Subscribe to The Divorce Planner Newsletter - Get regular tips, tools, and resources delivered directly to your inbox, including announcements about upcoming interviews and resources
Watch the full interview with Josephti Cruz to gain even more insights into protecting your financial future during divorce.