Financial divorce specialist: what they do and how to become one

Updated October 23, 2024

On top of the emotional distress that families go through during a divorce are the financial hurdles that they must overcome. Amidst all these complications, professionals come in, such as lawyers and financial divorce specialists.

But what can a financial divorce specialist do for their clients? What is the process if lawyers want to become one? We’ll answer these and more in this article, which can be used by specialists, lawyers, and even law students who want to break into this profession.

What is a financial divorce specialist in Canada?

A financial divorce specialist provides services at any stage of a separation and divorce by evaluating the finances of the family and giving them objective financial projections. These projections will be helpful for the separating couples, the court, and their lawyers, especially when the procedures for a fair settlement are ongoing.

Professionals called “financial divorce specialists” can also refer to either of the following:

• professionals who are not lawyers: lawyers and courts sometimes engage the services of a financial divorce specialist, who may or may not be a lawyer
• specific role divorce lawyers can take on: family and divorce lawyers can become a financial divorce specialist as their specialization, in addition to their other functions related to family law

In Canada, the use of the title “financial divorce specialist” are regulated, since only those who are accredited can provide such services. However, lawyers are just one of the many professions who can be accredited to become a certified financial divorce specialist.

Here’s a video of a financial divorce specialist explaining her roles in helping clients who are going through a separation:

We’ll discuss the roles of financial divorce specialists in more detail below. In any case, you can also consult with the best family lawyers in Ontario as ranked by Lexpert to learn more about becoming a financial divorce specialist. Lexpert is one of our sister publications, along with Canadian Lawyer Magazine.

What are the roles of a financial divorce specialist in Canada?

Financial divorce specialists collect financial information from the divorcees and use it to show one’s financial future or outcomes after the divorce. They are engaged either by:

• both spouses
• one of the spouses
• the lawyer of either spouses
• the mediator or arbitrator in the settlement process

Financial forecasting

The main role of financial divorce specialists is financial forecasting, which goes beyond the allocation of assets between the divorcing spouses.

“Asset division is what it is,” says Reesa Heft, a family lawyer and the principal of Heft Law in Toronto. “You can do different deals, but the math is still the same. It’s based on a fixed date — the date of separation — when it’s possible to identify the assets.”

However, while there are no variables in assets, there will always be variables with income, she adds. “The payor could have a catastrophic health episode, take retirement, or die, or the economy could have a horrible downturn. If you take the assets and invest them wisely, a financial person can do a calculation of what sort of return you will get.”

How to do financial forecasting

There are many factors to consider in making projections, says Linda Cartier, president of the Academy of Financial Divorce Specialists (AFDS). The AFDS is an educational body that provides training for financial planners, specifically called the Chartered Financial Divorce Specialists (CFDS).

These factors in financial forecasting include:

• rates of return
• cost of living
• tax implications
• family dynamics particular to the parties

“There might be more debts than assets. Just the fact that you’re taking one residence and now having to look after two residences means that the same dollars for a family that were together need to be stretched,” she says.

“We do a very complete cash flow analysis on spending and create as many analytical spreadsheets as possible. It’s more important to keep testing and forecasting the older they are.”

Financial advising to divorcing couples

After dealing with forecasting, a specialist interprets these numbers to their clients, helping them decide for themselves and their families. These numbers will also justify any proposed settlement, clearing the way for a peaceful and less hostile divorce proceeding.

“When they understand exactly where the money is going, it can help them to decide how to divvy things up — whether they can keep the house or need to sell it,” says Marion Korn. She has set up a mediation business called Mutual Solutions based in Toronto in partnership with Chartered Financial Divorce analyst Eva Sachs.

“We cut through the emotional background so they understand their position and reconsider a deep attachment to things they can’t afford.”

Helping people in grey divorces

Nowadays, people of all ages undergo divorce, and it seems no specific age range is safe. But admittedly, couples in grey divorces are more impacted financially, compared with couples who are middle-aged. Grey divorces refer to those which are sought later in life, where couples are already in their late 50s or above 60s.

“When you get to grey divorces, people’s finances are a lot more complicated than when they are in their twenties. It’s really helpful to have someone unravel some of the issues that are beyond a lawyer’s scope,” Heft says.

Because situations in grey divorces are unique and tend to be more complex, choosing a family lawyer along with a financial divorce specialist are valued in these cases. However, financial divorce specialists are also not confined to the retirement sector, although those tend to be the clients with the most money and complexity.

“Grey is a growing sector, but there are a lot of middle-aged couples, too,” Cartier says. “They may have embedded capital gains, estate planning concerns, second, or third mortgages. Children may or may not be connected to both parties.”

Help in divorces that involve large assets

Hiring a financial divorce specialist would be an additional cost for the separating couple for sure. But when there are huge assets or debts involved, it’s better to have one than none.

“There has to be enough money to warrant having a financial specialist come in,” Heft says. “It’s also very helpful for people who just can’t wrap their head around doing the financial piece. Many clients are very used to having other people do things for them. They almost need a financial babysitter.”

As such, the services of a financial divorce specialist may be needed for those who can’t decide for themselves. Practically, these can be those who relied too much on their significant other for financial decisions. But now that they are splitting ways, it’s important that these indecisive individuals can decide on their own, with the help of data-backed analysis from specialists.

What are the differences between financial divorce specialists and divorce lawyers?

We can say that being a divorce and family lawyer is the general designation and becoming a financial divorce specialist can be one’s specific role in a divorce case. However, a financial divorce specialist is also an accredited profession, separate from being a lawyer.

Here are some of the differences in the role of divorce lawyers and financial divorce specialists:

• Legal advice: Financial divorce specialists cannot offer legal opinion or advice as to their clients’ divorce proceedings. They’re only limited to evaluating and advising clients on their divorce’s financial matters.
• Separation of assets: Family lawyers can divide a couple’s assets equitably at a set point in time. Specialized financial professionals can make projections that show how that division translates into long-term income.
• Financial advice: “Lawyers are very familiar with legalese and don’t tend to put it in layman’s terms. We provide a bridge. We also do a lot of work in budgeting and financial management,” Cartier says.

Merging these two roles does not only help divorcing spouses throughout the process, but also upscales their abilities making them more in-demand and valuable.

What are the ways that lawyers can protect their clients’ money in a divorce?

Aside from guiding their clients through the court procedure of divorce, there are many ways that a lawyer can protect their clients’ money during these times. One of which is to help clients review the legally mandatory financial disclosures. If the lawyer is not a financial divorce specialist, then hiring one would be another option.

Reviewing financial disclosures

One of the things required for spouses during a divorce is to provide financial disclosure, according to instances under the law. In Ontario, a spouse in a divorce proceeding must:

• provide a financial disclosure within 30 days after the request of the other spouse
• provide an updated financial disclosure whenever the court requires them to do so

This means that it’s mandatory for spouses to disclose their financial circumstances through a disclosure before the divorce, during the proceeding, and after its termination. Disclosures are important since these are black-and-white bases in accounting the assets and liabilities of the family, and what happens next for their finances. It will also be a factor for the spouses to reach a fair settlement for their financial setup after the divorce.

For a quick rundown on the importance of financial disclosure in family law cases, here’s a video from Canadian Lawyer Magazine:

You can learn more about these financial disclosures by reaching out to the best lawyers in the field of family law. You can check out this Special Report from Canadian Lawyer on the Best Law Firms for Wills, Trusts, and Estates.

How can a lawyer become a financial divorce specialist?

There are two general things that a lawyer must have to become a financial divorce specialist:

• knowledge of Canadian divorce laws
• background in financial accounting

“Everyone working in this area has a certain percentage of their practice going through marriage breakdown and have seen the devastating effects in that situation,” Cartier says.

Licensing authorities and their designations

There are two Canadian authorities that monitor and provide the licenses for those who want to become a financial divorce specialist, among others. Each of these authorities issue their own respective certifications:

• Academy of Financial Divorce Specialists (AFDS):
  • issues the Chartered Financial Divorce Specialist (CFDS)
  • requires a prior and existing financial designation, specifically CFP, IQPF, CPA, CA, CGA, CMA, RFP, CIA, CIM or FOFP, CLU, or QAFP
• Institute for Divorce Financial Analysts (IDFA):
  • issues the Certified Divorce Financial Analyst (CDFA)
  • requires three years’ experience (either as a financial professional, accountant, or family lawyer) and a bachelor’s degree
  • requires a prior and existing financial designation similar to that of a CFDS applicant, including PFP, M.Acc., DABFA, EA, ChFC, CFA, PFS, CFE, CFF, CFM, CPCU, CIMA, CIMC, CBV, CVA, or ASA

Either of these designations are for professionals who want to work with lawyers, mediators, arbitrators, and spouses for either pre- or post-divorce financial planning. They can be hired by lawyers in order to help their clients, or they may also be directly hired by the separating spouses.

These bodies work both as a licensing and regulatory authority for professionals who hold these certifications. Here’s a rundown on what these authorities can do:

• set the certification’s qualifications (e.g., education and professional experience)
• train applicants who would like to be certified
• provide continuing education programs for certificate holders

These are just two of the many financial certifications that lawyers may acquire from similar or different authorities.

Financial divorce specialist: an expert in law and financial affairs

Tempering down the strong feelings during a divorce is hard, but with the help of lawyers and financial divorce specialists, couples can go through these hard times with more ease. With the availability of these professionals today, it just shows that legal and financial support are available for those needing it most.

For more resources on helping clients going through a divorce, either as a financial divorce specialist or a divorce lawyer, head over to our page on Family law practice area.