A Judge’s perspective on how including a Certified Divorce Financial Analyst on your team can lead to success.
By Jessica Pierce, Certified Divorce Financial Analyst®
The Honorable Kathleen M. McCarthy has served in the Family Division of the Wayne County Circuit Court since her election to the bench in 2000. Prior to taking the bench, she was a partner in her own law firm specializing in family law and personal injury litigation. Judge McCarthy is an active member and a past-president of the Wayne County Family Bar Association and a past-president of the Dearborn Bar Association. She is the 2006 recipient of the “Judge of the Year Award,” presented by DADS of Michigan and MOMS for DADS for her commitment to ensuring that children have frequent access to both parents, and recipient of the 5th Annual “Guardian of Justice Award,” presented by ADC of Michigan. In addition, Judge McCarthy is an adjunct professor at the University of Detroit Mercy School of Law and has taught advanced courses for the Institute for Divorce Financial Analysts (IDFA) since 2002.
Jessica Pierce, IDFA general manager, recently spoke with Judge McCarthy about how attorneys can achieve the best results in court by utilizing all available resources. Judge McCarthy offered her thoughts on the use of Certified Divorce Financial Analyst (CDFA) professionals, and the unique perspective they bring to each case.
JP: When and how did you first become aware of Certified Divorce Financial Analysts?
KM: I first became aware of Certified Divorce Financial Analysts early in my legal career – approximately 20 years ago – when one of the first CDFA professionals in Michigan marketed his services to me. It was perfect timing because I was a new, young divorce lawyer and was dealing with a complicated Social Security case. I needed the CDFA professional’s expertise to resolve the case.
JP: In your opinion, what value do you think CDFA professionals bring to the divorce process?
KM: A CDFA professional brings a detailed financial expertise to the case that divorce lawyers frequently lack. This includes knowledge of tax implications of various property distributions that all too often are not presented to a judge. Without that thorough financial information, inaccurate property and spousal support distributions are likely being made and being incorporated into final judgments, which then are nearly impossible to alter at a later date.
JP: Has the evidence provided by a CDFA professional in court, mediation, or arbitration helped you to understand the parties’ financial situations more clearly? Is it possible that having a CDFA on the team could affect the eventual outcome of a divorce?
KM: Evidence provided by a CDFA professional has absolutely assisted me many times in understanding the parties’ financial situations. Testimony from a CDFA professional can help a judge make more equitable final judgments. More often than not, cases with CDFA professionals involved settle without the necessity of a trial, because CDFA professionals make the numbers clear to the divorcing parties and their attorneys. Therefore, once the emotional aspect of the divorce subsides for the client, the attorneys are able to show their clients from an equitable standpoint where and how the case should be settled as a clear financial picture is present. The CDFA professional can show the attorneys the financial ramifications of various settlement proposals – which can reduce the parties’ anxiety and increase the chances of reaching a truly equitable agreement.
JP: In the past, traditional financial experts used in divorce setting were usually CPAs. Can you tell us something about how the CDFA professional’s expertise differs from that of a CPA – not only in settlement negotiations, but also as a testifying expert in court?
KM: For the past 20 years, the CDFA designation attracts and educates a variety of professionals, and each learns the best practices from the others, including lawyers, CPAs, CDFA professionals, judges, etc. This designation offers a CPA the opportunity to understand the legal side of divorce practice and apply that to their financial expertise. Many CPAs have never testified in court or worked in the legal area of family law. Being a CDFA professional exposes a CPA to this practical application, enhancing their financial background and servicing a much-needed area of legal practice.
JP: Based upon your experience with a Certified Divorce Financial Analyst as a qualified financial expert, is it fair to say that it’s time for qualified CDFA professionals to be more widely used in the divorce process?
KM: I absolutely believe that qualified CDFA professionals should be more widely used in mediation, arbitration, and litigation. Bringing in a CDFA professional as early as possible in the case is essential for proper discovery requests, document gathering, and document interpretation. It may be too late if the CDFA professional is brought into the case at the mediation stage in order to help to the full extent possible, especially if the discovery period is closed. Most cases settle at mediation, thus it is essential to have the financial expert on hand early to insure that a settlement can be reached at mediation and executed, that tax implications have been fully considered, and that the parties truly understand what they are agreeing to in the financial settlement.
To learn more about how a Certified Divorce Financial Analyst® can help you and your client address the financial issues of divorce, go to www.InstituteDFA.com/Lawyer. Founded in 1993, the Institute for Divorce Financial Analysts™ (IDFA™) is the most established and recognized designation in financial planning for divorce.To learn more about the CDFA designation or to find a CDFA professional near you, visit www.InstituteDFA.com.