4 Costly Financial Mistakes to Avoid in a San Diego Divorce (And Our CDFA Advantage)

The emotional weight of divorce often overshadows crucial financial details, leading many individuals to make costly, irreversible mistakes during the settlement process. Navigating property division, support, and asset valuation requires specialized knowledge far beyond standard legal advice. At San Diego Divorce Mediation & Family Law, we believe a peaceful separation must also be a financially sound one, which is why we integrate our Certified Divorce Financial Analyst (CDFA) expertise into every case we handle.

Underestimating the Impact of Tax Consequences

One of the most frequent errors we see is ignoring the future tax implications of asset division, especially regarding retirement accounts or the sale of the family home. An immediate 50/50 split may look fair on paper, but if one spouse receives a liquid asset and the other receives a pre-tax asset, the actual value is unequal. Our comprehensive CDFA financial analysis helps ensure your settlement secures true, after-tax equity.

Failing to Secure Professional Asset Valuation

For many San Diego families, the largest assets are often the hardest to value: a closely held business, stock options, or complex investment portfolios. Relying on rough estimates can leave significant money on the table. We stress the importance of professional appraisals and forensic accounting when necessary. Choosing an experienced divorce mediator is critical for ensuring full financial disclosure and proper, fair valuation.

Neglecting to Plan for Future Living Costs and Budgeting

Divorce fundamentally changes two households, often making two budgets more expensive than one. Many clients focus solely on the division of assets without creating a realistic future budget. Our approach helps clients model post-divorce finances, ensuring that spousal and child support figures are sustainable. We strive for long-term stability rather than a quick settlement that may cause future stress.

Overlooking the Need to Update Legal Agreements

The final mistake is treating the divorce decree as the final word and forgetting to update beneficiary designations, wills, and trusts. Additionally, if you have existing prenup and postnup agreements, they may need reevaluation or affirmation through the divorce process to prevent conflict. A thorough divorce lawyer in San Diego with a mediation focus ensures all legal documents are consistent with your new financial reality.

Avoiding these financial pitfalls is essential for achieving a successful, stable post-divorce life. This is precisely why utilizing a divorce lawyer in San Diego who also holds a CDFA designation, like the team at San Diego Divorce Mediation & Family Law, offers an incomparable advantage. To understand how we can help, contact San Diego Divorce Mediation & Family Law for a free consultation.

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TRANSCRIPT
Scott Levin Divorce Financial Analyst: 00:03
Hey everyone. This is Scott Levin, chief Peacekeeper. I’m a family law attorney that helps people mediate divorces. I’m here with Elizabeth Van Cleep and Ashlyn Downing today. How are you all Good?

Elizabeth Van Clief Esq: 00:15
Hi Fred.

Scott Levin Divorce Financial Analyst: 00:16
So this is going to be a really interesting conversation for those that are interested in the subject. So when you’re going through divorce and you have compensation for executives called restricted stock units, or if you have retirement assets that were earned before marriage but are partially earned before marriage, or there’s contributions after the data separation, there’s all these things that make assets partly community, which are what you divide in the state of California during divorce, and partly separate and, with the executive compensation, restricted stock units. Those two could be things that you divide during the divorce and then there’s a portion that become just separate property and then there’s a portion that are separate and shared. So it can get very complicated, and these two young ladies here are the people that you hire to figure things out as to what’s separate, what’s community and how do we divide these assets that are not always so straightforward. So, Elizabeth, let me pick on you for a second. Tell us what do you do on a daily basis. Did I describe that right? Is that pretty much where your work is?

Speaker 3: 01:31
Yeah, thank you, spad. So essentially what we do is we combine legal services with a little bit of forensic review of account statements to determine community property and separate property and a whole host of assets, and the main ones are restricted stock units, stock options and retirement benefits. So what you’ll see when you come to our firm is you’ll see us do an analysis of what’s community property that is available for division if we’re dividing community property equally which most of the time we do and what’s separate property which is going to be carved out and kept separate property for the person that earned the benefits and then we prepare the court order or whatever legal language Scott needs to put into the marital settlement agreement.

Speaker 3: 02:23
So it all connects together and only the community property interest is divided.

Scott Levin Divorce Financial Analyst: 02:31
So how do you get into that? So you’re an attorney with a financial kind of focus. How do you find yourself with the firm? How did you fit this section?

Speaker 3: 02:42
Yeah, so I’m actually a math major from college and then I went and got my degree at the University of San Diego School of Law and then I got a tax master’s.

Speaker 3: 02:53
And how I explain it is all these things that Ashlyn and I do together at the firm. It’s all kind of based in the internal revenue code because it has some sort of pre-tax or post-tax aspect to it and that way, in order for it to be pre-tax and have these attributes, it has to follow the rules of the internal revenue code. So if you think about retirement assets, they’re pre-tax for 1K plans and because of that they have to fall within certain requirements of the internal revenue code. So when you think about retirement benefits and stock options, it’s actually like a subset of being a tax law attorney, and so we kind of mix Ashlyn’s ability to do tracings and financial work with my ability to write the court order and understand that all of these assets have different tax requirements and you have to write the court order in a certain way so that when we divide stock options it doesn’t trigger a sale. When we divide retirement benefits, it doesn’t trigger a taxable distribution to the opposing side.

Scott Levin Divorce Financial Analyst: 04:04
Yeah, so really what Elizabeth does in terms of. So I’m a mediator, so when my clients work with me, we say, okay, here’s, here’s what we have. We have this asset and I think and one of them will say, I think you know, I earned part of it before marriage, so maybe we can figure out what that is so we send them to Elizabeth and Elizabeth does that math, or, in Ashlyn, the firm, and they figure out and they come back and say here’s how we would divide it pursuant to the law. And then they secondarily go another step and they give you, they give me, the language that we need to put in to the judges, to the judgment, so that the judge understands what, what that, what that division is. And secondarily, they then actually perform that division by sending it to the retirement, where the, where the funds are held, and to the company and they say here, here’s how you’re actually going to divide it. And that’s through what’s like all the quadro or you know other other instruments like that. It’s really like threefold. It’s the math, it’s the language that goes to the court and then it’s the actual performing of the division.

Scott Levin Divorce Financial Analyst: 05:06
And what’s great about this firm and why I wanted them on today is because you don’t have to do anything but give them the information, because they’re going to go off and do all the work, which is why I love them, because what I tell people is hey, I didn’t. I don’t remember my first or second or third year law school them teaching math because we didn’t do a specialty right, so. So that’s why we have math experts. Ashton, what’s your role at the firm? How do you? How do you come into play here?

Elizabeth Van Clief Esq: 05:34
So I’m our financial data analyst, so I do a lot of the Excel work and so I’m the one to request statements. Typically I analyze the statements, I do the data entry and the analysis for a whole range of the services we offers. We do we do the retirement accounts, we do the equity compensation. We will assist with Smith Osler support which goes along with the stock option compensation. We will occasionally do post separation accountings of checking savings accounts, especially in cases where you know the parties separated several years prior and sort of co mingled funds for a couple of years Before they really divided their finances up. So we get called into kind of take apart some of the more complicated cases where you have all of these different accounts that are all tied together. That’s a lot of what we do.

Scott Levin Divorce Financial Analyst: 06:38
Interesting. So what percent? So I, as a media, I don’t litigate anymore. I haven’t for over a decade, elizabeth, what percentage of your? I mean, do you have a percentage of cases that are litigation and versus mediation focused, or is it? Is it hard to say?

Speaker 3: 06:54
Well it’s. It’s interesting because I would say about 90% to 95% I’m jointly retained. Five to 10% I’m retained just by one party and normally that indicates that there’s some sort of concern that the other party might not cooperate, or or it’s at the beginning of the case and a family law attorney really wants a independent advisor that’s going to be with them the entire case and ask confidential questions and things like that. So but however, in terms of how many times we go to trial, I would say about 10 trials a year. And the one thing I wanted to mention is that even when I’m jointly retained, sometimes it can still be a conflict or a trial situation because I can be retained as a 730 expert.

Speaker 3: 07:48
So I prepare a report, I do the interview, you know we attach Ashland’s analysis and present it to the parties, answer questions. If they both agree, then we don’t have a hearing. I implement what the report says. If the report has great areas like there’s 10 years where we couldn’t get statements and so we did a good faith estimate but the party still want to go in and talk to the judge about, you know, burden of proof and should it be a little bit less or more than I will go and testify, still as a neutral party, but because they need a little bit of the court’s assistance in resolving it or in mediation. But it is relatively rare to have to go to court because the report is normally sufficient to enable people to have trust and understand that it’s likely the outcome that it would be in court anyway, and so it can really foster resolution and eliminate a lot of the disagreement between the parties when we get involved and present what you know financially exists out there.

Scott Levin Divorce Financial Analyst: 08:55
Yeah Well, I mean, we could go on forever. I don’t want to get too in depth, but really I think that the Van Cleef, you know Elizabeth, ashland, this firm they’re the most in demand law firm that I know of. I mean any other referral source I have, you know they are good but not as in demand as Elizabeth has become. So I think it’s awesome that you were able to take the time for me today, thank you. I hope that people will understand that when you have these sort of financial issues that are going on during or after divorce, that you really should reach out to the firm and give them a call and see how they can help, because they’re really the go-to experts in this field. I fear that Ashland will now be pitched by a lot of family law and and and and and you know David asset division firms for her expertise.

Elizabeth Van Clief Esq: 09:55
But now just teasing.

Scott Levin Divorce Financial Analyst: 09:56
But thanks so much for joining me, guys, and I’ll post all the contact information in the description, but I really appreciate you about being here.

Elizabeth Van Clief Esq: 10:02
Thanks for having us.

Scott Levin Divorce Financial Analyst: 10:04
Thank you, soon.

Elizabeth Van Clief Esq: 10:06
Bye, bye.