Divorce is one of the most financially consequential events in a person’s life. And increasingly, it’s happening later in life, to people with more assets, longer time horizons, and less room to recover from costly mistakes. Finivi’s Katie Moore, a Certified Divorce Financial Analyst® (CDFA®) and financial planner, works with clients and their attorneys to untangle the financial complexity of divorce and help them come out the other side financially secure. Below, Katie shares the trends she’s seeing, the biggest mistakes people make, and how a CDFA fits into the divorce process.
What trends are you seeing in divorce right now?
The overall divorce rate in the U.S. has fallen to a 50-year low, but that headline number hides a much more important story for my clients. Divorce among people over 50, what researchers call ‘gray divorce,’ is climbing in the opposite direction. Studies out of Bowling Green State University’s National Center for Family & Marriage Research show the divorce rate for adults 50 and older has roughly doubled since 1990, and for adults 65 and older it has nearly tripled.1People 50-plus now account for roughly a third of all U.S. divorces, up from under 10% in 1990, and that 65-plus group is the only age segment where divorce rates are still rising.
That matters enormously for financial planning. A 30-year-old going through divorce has decades to rebuild. Someone divorcing at 58 may be five or ten years from retirement, with a house, a pension, a 401(k), and Social Security timing decisions that all need to be divided correctly the first time, because there often isn’t time for a do-over.
I’d also point to two other things I see constantly in my practice. Research consistently shows that women initiate somewhere close to two-thirds of all divorces, and that share is even a bit higher specifically within gray divorces.2 Second marriages are also riskier than first ones. They end in divorce noticeably more often. A lot of my clients are navigating the financial complexity of a second divorce, which usually means blended-family assets, prior support obligations, and estate plans that need to be completely rebuilt.
What are the biggest financial challenges couples face during divorce?
Untangling and equitably dividing the different types of assets a marriage has accumulated. That’s the challenge, hands down. It sounds simple in theory: split everything fairly. In practice, a dollar isn’t always a dollar.
Retirement accounts are a perfect example. On the surface, “we’ll split the retirement accounts 50/50” sounds straightforward. But an active 401(k), a rollover IRA, a Roth IRA, an inherited IRA, and a defined-benefit pension are all governed by different rules, with different tax treatment, different withdrawal restrictions, and different survivor provisions. Dividing an employer-sponsored plan like a 401(k) or pension legally requires what’s called a Qualified Domestic Relations Order, or QDRO. That’s a separate court order that the plan administrator has to approve before any money can move.3 IRAs use a different mechanism entirely. Get the mechanics wrong, or treat a pre-tax 401(k) dollar as equivalent to a post-tax brokerage dollar, and one spouse can walk away with far less real, spendable wealth than the settlement appears to give them on paper.
Then there’s the harder-to-value stuff: business ownership, restricted stock and equity compensation, and, for the growing number of gray-divorce clients I work with, Social Security claiming strategy and health care costs before Medicare eligibility. When there are children still in the picture, college funding adds another layer. Once you start unwinding all of this, the goal isn’t just “equal.” It’s after-tax equitable, which is a much harder problem.
It sounds simple in theory: split everything fairly. In practice, a dollar isn’t always a dollar.
What about the house? Should someone keep it or sell it?
The house is usually the biggest asset in the marriage, and it’s also the most emotional one, so people often make that decision with their heart before they’ve run the numbers. I ask clients to look at both sides.
The case for keeping it. Stability matters, especially with kids still in school, and staying put avoids the cost and hassle of moving twice. If the mortgage rate is well below today’s market rate, that’s real value too. Someone who refinanced at 3% doesn’t want to trade that for a 7% rate on a smaller place. There can be a buyout instead of a sale: one spouse keeps the house and offsets the other spouse’s share with retirement assets, investment accounts, or cash.
The case for selling it. The math has to work on one income, not two. I’ve seen people fight hard to keep a house they love and then realize a year later they can’t cover the mortgage, taxes, insurance, and upkeep on their own. Selling also converts an illiquid asset into cash that can be split cleanly and invested, rather than tying up most of one spouse’s net worth in a single property. There’s a tax angle too: a couple who sells while still legally married can exclude up to $500,000 of home-sale gain from capital gains tax. Once the divorce is final, each ex-spouse is limited to a $250,000 exclusion on their own, so timing the sale can matter quite a bit if the home has appreciated significantly.4
There’s no universal right answer. It depends on cash flow after the divorce, how much home equity is tied up versus other assets, what the mortgage and tax situation look like, and whether keeping the house means one spouse is otherwise under-diversified. That’s exactly the kind of decision a CDFA should model out with real numbers before anyone signs anything, instead of deciding based on attachment to the house alone.
Why would someone hire a CDFA instead of just relying on their attorney?
A CDFA and a divorce attorney do fundamentally different jobs, and you generally need both. Attorneys provide the legal framework, negotiate on your behalf, and get the settlement finalized in court. They’re not trained to model out what a settlement means for your retirement income at age 75, or which spouse ends up in a higher tax bracket after the divorce, or how liquidating a specific asset today compares to keeping it.
A CDFA brings the financial analysis: modeling short- and long-term outcomes of different settlement scenarios, understanding the tax character of each asset, valuing complex holdings like stock options or a closely held business, and translating all of that into numbers the attorney and the court can use. It’s a real credential, not just a title. Candidates need a bachelor’s degree plus several years of relevant experience in financial planning, family law, tax, or a related field, and they have to pass a rigorous exam through the Institute for Divorce Financial Analysts.5 That combination of financial planning training and divorce-specific expertise is what lets a CDFA sit at the table with attorneys and speak both languages.
I always tell people engaging a CDFA is an investment, not an added expense, and it very often lowers the total cost of the divorce.
When should someone consider working with a CDFA?
Three situations come up again and again in my practice.
Financial complexity. If one spouse owns a business, values need to be established and an equitable buyout or offset structured. Stock options and other equity compensation have vesting schedules and tax treatment that a family law attorney typically isn’t equipped to evaluate. And as I mentioned, retirement accounts that look simple on a net-worth statement are anything but simple once you dig into how each type is taxed and divided.
Limited financial experience. Many clients, often the spouse who wasn’t the primary financial decision-maker during the marriage, haven’t managed investments, built a household budget, or planned toward long-term goals on their own. A CDFA can build that foundation before, during, and after the divorce, so decisions aren’t being made from a position of uncertainty.
Amicable divorces. This one gets overlooked. When both spouses are willing to cooperate, working jointly with a single CDFA to value assets and build a proposed settlement, before either side even retains an attorney, can meaningfully lower legal fees and preserve more of the marital estate for both people, rather than spending it on billable hours.
What are the real benefits of working with a CDFA?
Three stand out. First, clarity about the financial future, not just the day the divorce is finalized, but five, ten, twenty years out. Many clients have never built a post-divorce budget or retirement projection, and a CDFA builds that roadmap.
Second, an after-tax view of the settlement. It’s tempting to look at a spreadsheet and see “$500,000 to each spouse” and assume that’s equal. If one $500,000 pile is a pre-tax 401(k) and the other is a Roth IRA or after-tax brokerage account, they are not remotely equivalent in spending power. A CDFA models each spouse’s expected post-divorce tax bracket and shows the real, after-tax picture, which can change how assets should be divided to be fair.
Third, and this surprises people, using a CDFA typically reduces overall divorce costs. Clients who arrive financially organized ask sharper, more efficient questions, which reduces expensive back-and-forth with attorneys. When a CDFA works with both spouses on a neutral basis, the savings compound, and more of the marital estate stays with the family instead of going to legal fees.
When is the right time to bring in a CDFA?
As early as possible. Ideally, as soon as divorce is even being considered, before an attorney is retained. A CDFA can help someone understand what the financial process will look like, gather the right documentation up front, and think through different paths forward before any legal proceedings begin. Waiting until the settlement is nearly final to bring in financial expertise is one of the most common, and costly, mistakes I see.
How does a CDFA work alongside a divorce attorney?
The relationship is complementary, not competitive. Attorneys handle the legal strategy, negotiation, and court process. That’s their expertise, and a CDFA should never attempt to give legal advice. A CDFA handles the financial modeling, asset valuation, and tax analysis that inform the negotiation. Together, the team brings clarity to some of the most consequential financial decisions a person will ever make, during a period that’s often the most emotionally difficult of their life. When both professionals are engaged early and communicate well, clients end up with settlements that hold up financially for decades, not just on the day the ink dries.
What should someone do with their estate plan once the divorce is final?
Update it immediately. This is one of the most overlooked steps in the entire process, and skipping it can be dangerous. A divorce decree does not automatically update a will, a trust, a power of attorney, or a beneficiary designation. Those documents and forms still say whatever they said on the day they were signed, sometimes decades earlier, until someone actively goes in and changes them.
Beneficiary designations are the part that catches people off guard. Retirement accounts, 401(k)s, IRAs, and life insurance policies pass to whoever is named on the beneficiary form, regardless of what the divorce decree says or what the will says. I’ve seen cases where someone forgot to update an old 401(k) beneficiary form, and years later an ex-spouse was legally entitled to inherit an account the client assumed would go to their children. The U.S. Supreme Court has confirmed this: for employer plans governed by federal law, the beneficiary form on file controls, even when a divorce decree says otherwise.6
Beyond beneficiaries, a full post-divorce review usually covers the will, any trusts, health care proxies, and powers of attorney, since an ex-spouse is often still named in all of them by default. For anyone with minor children, this is also the moment to name a guardian and think through how and when children should inherit, rather than receiving a lump sum at 18. I work alongside a client’s estate attorney to walk through every document line by line and swap out the ex-spouse wherever they’re still named as executor, agent, trustee, or beneficiary.
Beyond divorce, what other services can a CDFA like you offer?
Divorce is where my specialized training comes in, but it’s one piece of a much bigger practice. Most of my clients come to me during a life transition, and divorce is just one kind. The others need the same comprehensive planning.
Retirement income planning. Figuring out how to turn savings into a paycheck that lasts, including Social Security timing, required minimum distributions, and which accounts to draw from first so a client doesn’t run out of money or overpay in taxes.
Financial planning. Building the full picture: cash flow, savings rate, insurance coverage, and long-term goals, so every decision fits into one strategy instead of being made in isolation.
Risk management. Reviewing life, disability, and long-term care insurance to make sure a client and their family are protected if the unexpected happens, not just optimizing for growth.
Business succession planning. Helping business owners think through how and when to transition out of the business, whether that’s a sale, a transfer to family, or a buyout, and how that event fits into their broader retirement and estate plans.
College funding. Building a savings and funding strategy for a child’s or grandchild’s education that works alongside retirement savings rather than competing with it.
Wealth transfer and estate planning. Making sure wills, trusts, and beneficiary designations name the right people, and building a plan for what a client wants to leave behind and how to do that efficiently. As I mentioned, updating these documents is especially critical right after a divorce.
Whatever the situation, the goal is the same: bring every piece together into one coordinated plan instead of a client juggling separate, disconnected conversations with different professionals.
Sources
- National Center for Family & Marriage Research, Bowling Green State University,bgsu.edu/ncfmr.Pew Research Center gray-divorce analysis, October 2025.
- Michael Rosenfeld, Stanford University, American Sociological Review.AARP research on divorce initiation.
- U.S. Department of Labor, Employee Benefits Security Administration,QDRO guidance.
- IRS,Topic no. 701, Sale of your home and Publication 523, capital gains exclusion rules under IRC §121.
- Institute for Divorce Financial Analysts (IDFA), CDFA certification requirements.
- Kennedy v. Plan Administrator for DuPont Savings & Investment Plan, 555 U.S. 285 (2009); Egelhoff v. Egelhoff, 532 U.S. 141 (2001), confirming ERISA preemption of state divorce-revocation statutes for employer-sponsored retirement plans.
This article is provided for informational and educational purposes only and does not constitute legal, tax, or financial advice. The information contained herein is general in nature and may not apply to your specific situation. Divorce involves complex legal, financial, and tax considerations that vary based on individual circumstances, state law, and applicable federal regulations.
The content in this article should not be construed as a solicitation or offer to buy or sell any security or financial product, nor should it be interpreted as personalized financial, legal, or tax advice. You should consult with a qualified attorney, CPA, and financial advisor before making any decisions related to divorce proceedings or settlement agreements.
References to tax rules, IRS publications, Social Security Administration guidelines, and retirement account regulations are provided for general informational purposes only and are subject to change. Finivi does not provide legal or tax advice. Tax and legal information discussed in this article may not reflect the most current developments and should be verified with appropriate professional counsel.
Certified Divorce Financial Analyst (CDFA®) is a professional designation granted by the Institute for Divorce Financial Analysts (IDFA). Use of this designation does not imply a specific level of investment or advisory services.
