When Ishould Ia IQDRO I(Qualified IDomestic IRelations IOrder) Ibe Ifiled? I- I I I IAt Ithe Itime Iof
Idivorce Ior Iimmediately Iafter Ithe Idivorce Iis Ifinalized.
Can Ian Iattorney Itestify Ion Ibehalf Iof Itheir Iclients? I- I I I INo. IEven Iif Ithey Ihave Isignificant
Ifinancial Iexpertise...
CDFA Divorce Exam - Avantax Approved
| LATEST WITH COMPLETE SOLUTON
When should a QDRO (Qualified Domestic Relations Order) be filed? - At the time of
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divorce or immediately after the divorce is finalized.
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Can an attorney testify on behalf of their clients? - No. Even if they have significant
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financial expertise, they cannot.
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What is a 72T election with regard to divorce? - It is an IRS rule that allows for you to
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withdraw funds from a qualified retirement account without penalty at the time of divorce.
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What can pre-divorce financial counseling by a CDFA professional help do? - It can
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help people arrive at a settlement that is fully understood by all involved (and that is fairly
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distributed between parties).
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What are the main roles of a CDFA professional (8)? - 1. D (Dividing Property):
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Understanding the short and long-term effects of dividing property
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2. T (taxes): Understanding tax issues
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3. PV (present value): Analyzing pensions and retirement plans, and calculating the
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present value of a pension
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4. H (home): Determining if the client can afford the martial home on one salary and if not,
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what type of dwelling the client can afford.
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5. CB (cost basis): Determining the cost basis and capital gains on the sale of the marital
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home (and investments)
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6. I (insurance): Evaluating the insurance needs of the client and determining if COBRA is
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applicable
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7. E (earnings): Determining earning capabilities
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8. P (projections): Establishing assumptions for projecting inflation and rates of return on
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investments
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A CDFA professional IS NOT (6) - 1. An attorney
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2. A business appraiser
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3. Pension valuator
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4. Actuary
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5. CPA/tax preparer
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6. Mediator
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What is a CDFA professional not a pension valuator? Who is? - Although a CDFA
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professional can prepare pension estimates, only an actuary can prepare a true pension
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valuation.
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, What is the difference between giving legal advice and providing information (i.e. what I
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can do as a CDFA)? - Giving legal advise is "You should..." versus providing
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information is "If you were to receive..., this would be the financial result."
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When can a CDFA professional work on a client's financial assets? - Once the closing
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letter has been sent after the divorce is finalized. Otherwise, I may not be able to testify
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on my client's behalf because of the conflict of interest.
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To get around this, I can assign clients to another FA on my team in the meantime, until
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the divorce case is closed.
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What are the 5 supportive roles of the CDFA in a divorce? - 1. Strategist before the case
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is even filed
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2. Financial expert in the court case
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3. Data collector for the financial affidavit and budgets
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4. Evidence presenter in court to show the financial impact of different settlement options
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5. Client expectations manager during the divorce process
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Which of the following is a common mistake divorcing couples make?
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A. Failing to consider the tax consequences of an early withdrawal from a retirement
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account.
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B. Dividing a joint checking account to obtain an equitable distribution of assets
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C. Using the cost basis to determine taxes on the sale of the property
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D. Failing to consider the taxes due on child support payments - A. Failing to consider
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the tax consequences of an early withdrawal from a retirement account.
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Jacob is divorcing his wife, Andrea. Jacob hired a CDFA to help. What actions are
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appropriate for the CDFA?
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A. Only to analyze Jacob's financial information
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B. Only to analyze Andrea's financial information
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C. To analyze Jacob's financial information and audit Andrea's.
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D. To analyze both Jacob and Andrea's financial information. - D. To analyze both
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Jacob and Andrea's financial information.
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___________________________ is a good way to get a sense of how the law is applied I I I I I I I I I I I I I I
in your state. - Reviewing the statutes
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Will most CDFA professionals work with a couple that don't have attorneys? - No
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because of the liability if assets are missed or hidden, and one of the parties finds out
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after the divorce is finalized.
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Approximately ________% of the parties in a divorce do not hire an attorney. - 50% I I I I I I I I I I I I I II II
What is a pro se divorce? - Without attorneys. Literally means "in one own's behalf."
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