CDFA Divorce Exam - Avantax Approved UPDATED ACTUAL Questions and
CORRECT Answers
When should a QDRO (Qualified Domestic Relations Or- At the time of divorce or immediately after the divorce is
der) be filed? finalized.
No. Even if they have significant financial expertise, they
Can an attorney testify on behalf of their clients?
cannot.
It is an IRS rule that allows for you to withdraw funds from
What is a 72T election with regard to divorce? a qualified retirement account without penalty at the time
of divorce.
It can help people arrive at a settlement that is fully under-
What can pre-divorce financial counseling by a CDFA pro-
stood by all involved (and that is fairly distributed between
fessional help do?
parties).
1. D (Dividing Property): Understanding the short and
long-term effects of dividing property
2. T (taxes): Understanding tax issues
3. PV (present value): Analyzing pensions and retirement
plans, and calculating the present value of a pension
4. H (home): Determining if the client can afford the mar-
tial home on one salary and if not, what type of dwelling
What are the main roles of a CDFA professional (8)? the client can afford.
5. CB (cost basis): Determining the cost basis and capital
gains on the sale of the marital home (and investments)
6. I (insurance): Evaluating the insurance needs of the
client and determining if COBRA is applicable
7. E (earnings): Determining earning capabilities
8. P (projections): Establishing assumptions for projecting
inflation and rates of return on investments
1. An attorney
2. A business appraiser
A CDFA professional IS NOT (6)
3. Pension valuator
4. Actuary
, 5. CPA/tax preparer
6. Mediator
Although a CDFA professional can prepare pension esti-
What is a CDFA professional not a pension valuator? Who
mates, only an actuary can prepare a true pension valua-
is?
tion.
Giving legal advise is "You should..." versus providing in-
What is the difference between giving legal advice and
formation is "If you were to receive..., this would be the
providing information (i.e. what I can do as a CDFA)?
financial result."
Once the closing letter has been sent after the divorce is
finalized. Otherwise, I may not be able to testify on my
When can a CDFA professional work on a client's financial client's behalf because of the conflict of interest.
assets?
To get around this, I can assign clients to another FA on my
team in the meantime, until the divorce case is closed.
1. Strategist before the case is even filed
2. Financial expert in the court case
3. Data collector for the financial afldavit and budgets
What are the 5 supportive roles of the CDFA in a divorce?
4. Evidence presenter in court to show the financial impact
of different settlement options
5. Client expectations manager during the divorce process
Which of the following is a common mistake divorcing
couples make?
A. Failing to consider the tax consequences of an early
withdrawal from a retirement account.
B. Dividing a joint checking account to obtain an equitable A. Failing to consider the tax consequences of an early
distribution of assets withdrawal from a retirement account.
C. Using the cost basis to determine taxes on the sale of
the property
D. Failing to consider the taxes due on child support
payments
CORRECT Answers
When should a QDRO (Qualified Domestic Relations Or- At the time of divorce or immediately after the divorce is
der) be filed? finalized.
No. Even if they have significant financial expertise, they
Can an attorney testify on behalf of their clients?
cannot.
It is an IRS rule that allows for you to withdraw funds from
What is a 72T election with regard to divorce? a qualified retirement account without penalty at the time
of divorce.
It can help people arrive at a settlement that is fully under-
What can pre-divorce financial counseling by a CDFA pro-
stood by all involved (and that is fairly distributed between
fessional help do?
parties).
1. D (Dividing Property): Understanding the short and
long-term effects of dividing property
2. T (taxes): Understanding tax issues
3. PV (present value): Analyzing pensions and retirement
plans, and calculating the present value of a pension
4. H (home): Determining if the client can afford the mar-
tial home on one salary and if not, what type of dwelling
What are the main roles of a CDFA professional (8)? the client can afford.
5. CB (cost basis): Determining the cost basis and capital
gains on the sale of the marital home (and investments)
6. I (insurance): Evaluating the insurance needs of the
client and determining if COBRA is applicable
7. E (earnings): Determining earning capabilities
8. P (projections): Establishing assumptions for projecting
inflation and rates of return on investments
1. An attorney
2. A business appraiser
A CDFA professional IS NOT (6)
3. Pension valuator
4. Actuary
, 5. CPA/tax preparer
6. Mediator
Although a CDFA professional can prepare pension esti-
What is a CDFA professional not a pension valuator? Who
mates, only an actuary can prepare a true pension valua-
is?
tion.
Giving legal advise is "You should..." versus providing in-
What is the difference between giving legal advice and
formation is "If you were to receive..., this would be the
providing information (i.e. what I can do as a CDFA)?
financial result."
Once the closing letter has been sent after the divorce is
finalized. Otherwise, I may not be able to testify on my
When can a CDFA professional work on a client's financial client's behalf because of the conflict of interest.
assets?
To get around this, I can assign clients to another FA on my
team in the meantime, until the divorce case is closed.
1. Strategist before the case is even filed
2. Financial expert in the court case
3. Data collector for the financial afldavit and budgets
What are the 5 supportive roles of the CDFA in a divorce?
4. Evidence presenter in court to show the financial impact
of different settlement options
5. Client expectations manager during the divorce process
Which of the following is a common mistake divorcing
couples make?
A. Failing to consider the tax consequences of an early
withdrawal from a retirement account.
B. Dividing a joint checking account to obtain an equitable A. Failing to consider the tax consequences of an early
distribution of assets withdrawal from a retirement account.
C. Using the cost basis to determine taxes on the sale of
the property
D. Failing to consider the taxes due on child support
payments
