CDFA Module 2 UPDATED ACTUAL
Exam Questions and CORRECT Answers
Asset most likely to be couple's most valuable? - CORRECT ANSWER - Family Home
Separate Property - CORRECT ANSWER - Property a person brings into the marriage;
inherits during the marriage; or receives as a gift during the marriage.
Marital Property - CORRECT ANSWER - Everything acquired during the marriage,
regardless of which spouse owns the property (including the increase in value of property in
some states).
Key documents for collecting financial information - CORRECT ANSWER - financial
affidavit, and asset/liability comparison worksheet
Ways in which assets are traditionally hidden: - CORRECT ANSWER - 1) person denies
existence of asset; 2) assets transferred to third party; 3) person claims asset was lost or
dissipated; or 4) person creates false debt
First place to look for hidden assets? - CORRECT ANSWER - Tax returns; good idea to
look over past 5 years.
Appraisal - CORRECT ANSWER - procedure for determining FMV of asset when it is
sold or divided
Arbitration - CORRECT ANSWER - submitting dispute to someone who is not a judge;
decision is usually binding and final
Arrearages - CORRECT ANSWER - Difference between amount of spousal/child support
paid, and amount required under court order
,Assets - CORRECT ANSWER -
Assets - CORRECT ANSWER - Cash, property, investments, goodwill, and other items of
value (as defined by state law) that appear on a balance sheet indicating the net worth of an
individual or a business.
Asset Inventory - CORRECT ANSWER - Collection of financial data that includes
information on assets and liabilities. Key documents used are the Financial Affidavit and
Asset/Liability Comparison worksheet.
Bankruptcy - CORRECT ANSWER - See Chapter 7 Bankruptcy and Chapter 13
Bankruptcy.
Best Interest of the Child - CORRECT ANSWER - A discretionary legal standard used by
judges when making decisions about custody, visitation, and support for a child when the parents
are divorcing.
Bunching Deductions - CORRECT ANSWER - Tax strategy that involves "bunching"
itemized deductions so that they are high in one year and low the following year. The standard
deduction can be used on the alternate year.
Career Asset - CORRECT ANSWER - Assets tied to one's career (health insurance, stock
options, retirement plans, etc.)
Certified Business Appraiser (CBA) - CORRECT ANSWER - An individual who is
certified in business valuations. Change of Venue: A change of judges or geographical location,
requested by a party to the action who feels that the change is justified by state law.
Chapter 7 Bankruptcy - CORRECT ANSWER - Type of bankruptcy filing that allows you
to liquidate all of your assets and use the proceeds to pay off your debts, erasing your debts that
cannot be paid off in full. All unsecured debts are forgiven and all assets over statutory minimum
protected amounts are forfeited.
,Chapter 13 Bankruptcy - CORRECT ANSWER - Type of bankruptcy filing that allows
you to develop a pay-off plan over a three-year period. Some of the debts may be discharged.
Childcare Credit - CORRECT ANSWER - (dependency exemption) a nonrefundable
childcare tax credit available to the custodial parent who pays for child or dependent care
expenses so that they can be gainfully employed.
Child Contingency Rule - CORRECT ANSWER - States that if any amount of spousal
support specified in the divorce decree is reduced: (a) upon the happening of any contingency
related to the child; or (b) at a time that can be clearly associated with a contingency related to
the child, then the amount of the reduction will be treated as child support, rather than spousal
support. These payments will be considered child support when the payments begin. (IRS Code
Section 71(c)(2))
Child Support - CORRECT ANSWER - The amount of money paid by a non-custodial
parent to the custodial parent for a child's day-to-day expenses and other special needs. Each
state is required by Congress to have written child support guidelines and enforcement
procedures.
Child Support Guidelines - CORRECT ANSWER - A series of mathematical formulas
used to calculate the amount of child support to be paid in some cases. Congress has mandated
that states adopt child support guidelines and support enforcement procedures.
COBRA - CORRECT ANSWER - Consolidated Omnibus Budget Reconciliation Act
(COBRA) law passed in 1986. It allows an ex-spouse to continue to receive health insurance
coverage from his/her former spouse's employer if the employer has at least 20 employees, for
up to three years after the divorce. Premiums for this coverage are typically higher than when
they were covered under the employer's plan. It should be noted that the normal COBRA
provision states that if an employee leaves or is fired from a job, he or she can get health
insurance from that company for 18 months. However, in the case of a divorce it is extended to
three years or 36 months.
Collaborative Divorce - CORRECT ANSWER - A team approach to divorce in which
divorcing couples obtain professional help from specialists in the legal, financial, and mental
health fields; when needed, additional professionals (including child/parenting experts) may be
called in to help the couple settle their case.
, Collaborative Law - CORRECT ANSWER - Collaborative Law is a new dispute
resolution model in which each party retains their own attorney who has gone through
specialized "Collaborative Law" training. The lawyer's only job is to help settle the dispute. All
parties agree to work together respectfully, honestly, and in good faith to try to find "win-win"
solutions to the legitimate needs of both parties. No one may go to court, or even threaten to do
so. If that should occur, the Collaborative Law process terminates and both lawyers are
disqualified from any further involvement in the case.
Collusion - CORRECT ANSWER - An agreement between two or more persons where
one of the parties brings false charges against the other. In a divorce case, the husband and wife
may agree to use adultery as a ground in order to obtain divorce more quickly, knowing full well
that adultery was not committed. Collusion is illegal.
Common Law Marriage - CORRECT ANSWER - A judicially recognized marriage in
some states, usually based on cohabitation where no formal marriage ceremony has taken place.
See page 35 for more details.
Community Property - CORRECT ANSWER - In community property states, any property
not deemed "separate" (i.e., owned before the marriage or obtained by gift or inheritance) is
"community" property and will likely be subject to a 50/50 division. Any property acquired in a
community property state retains its community property status no matter where the couple
moves. There are currently eight states that have adopted community property laws: Arizona,
California, Idaho, Louisiana, Nevada, New Mexico, Texas, and Washington. Alaska has an
optional community property act (AS 34.77.090), and Wisconsin is essentially a community
property state, but there are exceptions to the typical community property rules. Most other states
follow the rule of "equitable distribution" of property.
Complainant - CORRECT ANSWER - The one who files the suit; same as plaintiff.
Complaint - CORRECT ANSWER - This is a legal document filed by the plaintiff to start
the divorce process. It states that the marriage has ended and lists the grounds and claims for the
divorce. In some states it is also known as a petition.
Exam Questions and CORRECT Answers
Asset most likely to be couple's most valuable? - CORRECT ANSWER - Family Home
Separate Property - CORRECT ANSWER - Property a person brings into the marriage;
inherits during the marriage; or receives as a gift during the marriage.
Marital Property - CORRECT ANSWER - Everything acquired during the marriage,
regardless of which spouse owns the property (including the increase in value of property in
some states).
Key documents for collecting financial information - CORRECT ANSWER - financial
affidavit, and asset/liability comparison worksheet
Ways in which assets are traditionally hidden: - CORRECT ANSWER - 1) person denies
existence of asset; 2) assets transferred to third party; 3) person claims asset was lost or
dissipated; or 4) person creates false debt
First place to look for hidden assets? - CORRECT ANSWER - Tax returns; good idea to
look over past 5 years.
Appraisal - CORRECT ANSWER - procedure for determining FMV of asset when it is
sold or divided
Arbitration - CORRECT ANSWER - submitting dispute to someone who is not a judge;
decision is usually binding and final
Arrearages - CORRECT ANSWER - Difference between amount of spousal/child support
paid, and amount required under court order
,Assets - CORRECT ANSWER -
Assets - CORRECT ANSWER - Cash, property, investments, goodwill, and other items of
value (as defined by state law) that appear on a balance sheet indicating the net worth of an
individual or a business.
Asset Inventory - CORRECT ANSWER - Collection of financial data that includes
information on assets and liabilities. Key documents used are the Financial Affidavit and
Asset/Liability Comparison worksheet.
Bankruptcy - CORRECT ANSWER - See Chapter 7 Bankruptcy and Chapter 13
Bankruptcy.
Best Interest of the Child - CORRECT ANSWER - A discretionary legal standard used by
judges when making decisions about custody, visitation, and support for a child when the parents
are divorcing.
Bunching Deductions - CORRECT ANSWER - Tax strategy that involves "bunching"
itemized deductions so that they are high in one year and low the following year. The standard
deduction can be used on the alternate year.
Career Asset - CORRECT ANSWER - Assets tied to one's career (health insurance, stock
options, retirement plans, etc.)
Certified Business Appraiser (CBA) - CORRECT ANSWER - An individual who is
certified in business valuations. Change of Venue: A change of judges or geographical location,
requested by a party to the action who feels that the change is justified by state law.
Chapter 7 Bankruptcy - CORRECT ANSWER - Type of bankruptcy filing that allows you
to liquidate all of your assets and use the proceeds to pay off your debts, erasing your debts that
cannot be paid off in full. All unsecured debts are forgiven and all assets over statutory minimum
protected amounts are forfeited.
,Chapter 13 Bankruptcy - CORRECT ANSWER - Type of bankruptcy filing that allows
you to develop a pay-off plan over a three-year period. Some of the debts may be discharged.
Childcare Credit - CORRECT ANSWER - (dependency exemption) a nonrefundable
childcare tax credit available to the custodial parent who pays for child or dependent care
expenses so that they can be gainfully employed.
Child Contingency Rule - CORRECT ANSWER - States that if any amount of spousal
support specified in the divorce decree is reduced: (a) upon the happening of any contingency
related to the child; or (b) at a time that can be clearly associated with a contingency related to
the child, then the amount of the reduction will be treated as child support, rather than spousal
support. These payments will be considered child support when the payments begin. (IRS Code
Section 71(c)(2))
Child Support - CORRECT ANSWER - The amount of money paid by a non-custodial
parent to the custodial parent for a child's day-to-day expenses and other special needs. Each
state is required by Congress to have written child support guidelines and enforcement
procedures.
Child Support Guidelines - CORRECT ANSWER - A series of mathematical formulas
used to calculate the amount of child support to be paid in some cases. Congress has mandated
that states adopt child support guidelines and support enforcement procedures.
COBRA - CORRECT ANSWER - Consolidated Omnibus Budget Reconciliation Act
(COBRA) law passed in 1986. It allows an ex-spouse to continue to receive health insurance
coverage from his/her former spouse's employer if the employer has at least 20 employees, for
up to three years after the divorce. Premiums for this coverage are typically higher than when
they were covered under the employer's plan. It should be noted that the normal COBRA
provision states that if an employee leaves or is fired from a job, he or she can get health
insurance from that company for 18 months. However, in the case of a divorce it is extended to
three years or 36 months.
Collaborative Divorce - CORRECT ANSWER - A team approach to divorce in which
divorcing couples obtain professional help from specialists in the legal, financial, and mental
health fields; when needed, additional professionals (including child/parenting experts) may be
called in to help the couple settle their case.
, Collaborative Law - CORRECT ANSWER - Collaborative Law is a new dispute
resolution model in which each party retains their own attorney who has gone through
specialized "Collaborative Law" training. The lawyer's only job is to help settle the dispute. All
parties agree to work together respectfully, honestly, and in good faith to try to find "win-win"
solutions to the legitimate needs of both parties. No one may go to court, or even threaten to do
so. If that should occur, the Collaborative Law process terminates and both lawyers are
disqualified from any further involvement in the case.
Collusion - CORRECT ANSWER - An agreement between two or more persons where
one of the parties brings false charges against the other. In a divorce case, the husband and wife
may agree to use adultery as a ground in order to obtain divorce more quickly, knowing full well
that adultery was not committed. Collusion is illegal.
Common Law Marriage - CORRECT ANSWER - A judicially recognized marriage in
some states, usually based on cohabitation where no formal marriage ceremony has taken place.
See page 35 for more details.
Community Property - CORRECT ANSWER - In community property states, any property
not deemed "separate" (i.e., owned before the marriage or obtained by gift or inheritance) is
"community" property and will likely be subject to a 50/50 division. Any property acquired in a
community property state retains its community property status no matter where the couple
moves. There are currently eight states that have adopted community property laws: Arizona,
California, Idaho, Louisiana, Nevada, New Mexico, Texas, and Washington. Alaska has an
optional community property act (AS 34.77.090), and Wisconsin is essentially a community
property state, but there are exceptions to the typical community property rules. Most other states
follow the rule of "equitable distribution" of property.
Complainant - CORRECT ANSWER - The one who files the suit; same as plaintiff.
Complaint - CORRECT ANSWER - This is a legal document filed by the plaintiff to start
the divorce process. It states that the marriage has ended and lists the grounds and claims for the
divorce. In some states it is also known as a petition.
