CDFA Exam Study Materials 2025–2026 – Questions with Detailed and Verified Answers /100% Correct/ Graded A+)

1. What is the primary role of a Certified Divorce Financial Analyst (CDFA)? A. To provide legal advice to divorcing clients. B. To provide mediation services for custody disputes. C. To analyze the financial issues of divorce and provide data-driven recommendations for settlement. D. To act as a personal financial planner for post-divorce life. ANSWER: C. The CDFA's core function is to use their knowledge of tax, asset analysis, and financial planning to analyze the short and long-term financial impact of proposed divorce settlements. They provide objective financial analysis, not legal advice. 2. In which type of divorce process do both parties hire a single, neutral financial professional to provide analysis? A. Litigation B. Collaborative Divorce C. Mediation D. Arbitration ANSWER: B. In a Collaborative Divorce, both parties and their specially-trained attorneys agree to work together without going to court. They often use a neutral CDFA or other financial expert to provide financial analysis that all parties rely upon. 3. The "Automatic Temporary Restraining Orders" (ATROs) typically go into effect: A. After the final judgment is entered. B. When one party moves out of the marital home. C. Upon the filing of the divorce petition. D. Only if requested by one of the parties. ANSWER: C. ATROs are standard orders that automatically take effect when a divorce petition is filed. They prevent either party from unilaterally making significant financial changes, such as selling assets, changing insurance beneficiaries, or incurring large debts. 4. What is the purpose of a "QDRO" (Qualified Domestic Relations Order)? A. To divide a bank account. B. To transfer title of the marital home. C. To divide a qualified retirement plan without tax penalties. D. To establish child support payments. ANSWER: C. A QDRO is a legal order that recognizes the existence of an alternate payee's (e.g., the ex-spouse's) right to receive a portion of the benefits payable from a qualified retirement plan (like a 401(k)), allowing for a tax-free transfer. 5. For federal tax purposes, alimony payments are: A. Deductible by the payor and taxable income to the payee for divorce agreements executed after 2018. B. Always deductible by the payor regardless of the date. C. Not deductible by the payor and not taxable to the payee for divorce agreements executed after 2018. D. Only taxable if specified in the decree. ANSWER: C. For any divorce or separation agreement executed after December 31, 2018, alimony payments are *not* deductible by the paying spouse and are *not* included in the taxable income of the receiving spouse. 6. The "double-dipping" argument often arises when: A. A business is valued for both property division and as a source of income for support. B. A spouse tries to hide assets in two different locations. C. Child support is calculated twice. D. Both parties claim the same dependency exemption. ANSWER: A. Double-dipping occurs when the value of a business or professional practice is included in the marital estate for equitable distribution, and then the *same* income stream from that business is also used to calculate spousal support, arguably counting the same asset twice. 7. The standard used to determine the division of marital property in most equitable distribution states is: A. Community Property B. Equitable Distribution C. Title Theory D. Fair Market Value Division ANSWER: B. Most states are "equitable distribution" states, meaning the court will divide marital property in a manner that is fair and equitable, but not necessarily equal. A minority of states are "community property" states. 8. Which of the following is typically considered "separate property"? A. A 401(k) account contributed to during the marriage. B. The marital home. C. An inheritance received by one spouse during the marriage and kept separate. D. Wages earned during the marriage. ANSWER: C. Separate property generally includes assets acquired *before* the marriage, gifts and inheritances given solely to one spouse *during* the marriage, and any property traceable to these sources. 9. The "passive" appreciation of separate property during the marriage is usually: A. Always considered marital property. B. Always considered separate property. C. Marital only if both spouses' names are on the title. D. Divided based on who managed the asset. ANSWER: B. Passive appreciation (e.g., market forces increasing the value of a pre-marital stock portfolio) typically remains separate property. Active appreciation (e.g., value increase due to one spouse's direct efforts or marital funds) may be considered marital. 10. The first step in the financial analysis of a divorce is usually to: A. Value all assets. B. Calculate support. C. Prepare a budget and identify cash flow needs. D. File tax returns. ANSWER: C. Understanding the client's current and post-divorce income, expenses, and cash flow is foundational. This informs the analysis of what support is needed and what division of assets is sustainable. 11. A "Lifestyle Analysis" is conducted to: A. Judge the moral character of the spouses. B. Determine the standard of living established during the marriage for support purposes. C. Plan for retirement. D. Calculate child-related expenses only. ANSWER: B. The lifestyle analysis examines spending patterns during the marriage to establish the marital standard of living (MSOL), which is a key factor courts consider when awarding spousal support. 12. Which financial document is LEAST useful for conducting a lifestyle analysis? A. Personal tax returns (Form 1040) B. Business financial statements for a closely-held company C. Credit card statements and checking account records D. A prenuptial agreement ANSWER: D. While a prenuptial agreement is a critical legal document, it does not provide data on actual spending and cash flow, which is the purpose of a lifestyle analysis. Tax returns and bank/credit card statements are primary sources. 13. The "coverture fraction" is used to: A. Calculate child support. B. Determine the marital portion of a pension that accrued during the marriage. C. Divide a bank account. D. Value a business. ANSWER: B. The coverture fraction (Years of Service during Marriage / Total Years of Service) is a common method to determine what portion of a defined benefit pension is considered marital property. 14. In a Defined Benefit Plan, the participant is promised: A. A specific account balance at retirement. B. A specific monthly benefit at retirement, based on a formula. C. Variable payments based on investment performance. D. A lump sum only. ANSWER: B. A Defined Benefit Plan promises a specific monthly benefit at retirement age, often based on a formula involving years of service and salary (e.g., final average pay). 15. The "present value" of a pension represents: A. The total contributions made by the employee. B. The current lump-sum value of a stream of future pension payments. C. The monthly payment amount the employee will receive. D. The value of the pension at the employee's retirement age. ANSWER: B. Present value is a calculation that discounts future pension payments back to a single lump-sum value today, accounting for the time value of money, mortality, and interest rates. 16. When dividing a Defined Contribution Plan (like a 401(k)), the most critical date for valuation is typically the: A. Date of marriage. B. Date of separation. C. Date of divorce (date of judgment). D. Date the QDRO is submitted. ANSWER: C. For most defined contribution plans, the value is determined as of the date of divorce (or another date specified by law or agreement), as the account balance can fluctuate with market conditions. 17. The "Thrift Savings Plan" (TSP) is a retirement plan for: A. Corporate executives. B. Federal employees and uniformed services members. C. Self-employed individuals. D. State government employees. ANSWER: B. The TSP is a federal government-defined contribution plan, similar to a 401(k), for federal employees and members of the uniformed services. 18. A "Gray Divorce" refers to a divorce involving couples who are: A. In their 30s. B. Of any age with gray assets. C. Typically over the age of 50. D. Only involved in age discrimination cases. ANSWER: C. Gray Divorce refers to couples divorcing later in life, often after a long-term marriage. This presents unique challenges such as limited time to recover financially, complex retirement assets, and potential health care costs. 19. A major financial risk in a Gray Divorce is: A. The cost of college for children. B. The division of a small marital estate. C. Running out of money during retirement due to the splitting of assets. D. The increase in income from two households. ANSWER: C. Splitting a single retirement nest egg into two can severely impact the sustainability of both parties' retirement plans, especially given their shorter time horizon to save. 20. The "Social Security Deemed Filing" rule generally affects a divorced spouse who: A. Has never been married. B. Is applying for benefits before their Full Retirement Age (FRA). C. Remarries before age 60. D. Was married for less than 9 years. ANSWER: B. If a divorced spouse applies for benefits *before* their Full Retirement Age, they are "deemed" to be applying for both their own benefit and any spousal benefit they are eligible for, and will receive the higher of the two amounts.