This is a video where I interview Jennifer Taylor with Square One Divorce in San Clemente who shares what a CDFA certification is and how her services as a Certified Divorce Financial Analyst plays a pivotal role in the divorce process.
Tim Blankenship: Hey everybody. This is Tim Blankenship with divorce661.com. Today we’re speaking with Jennifer Taylor. She is a CPA and a certified divorce financial analyst with offices in San Clemente, California and we’re going to learn all about what she does and what her service provides and how she can help you going through the divorce process. How are you doing today Jennifer?
Jennifer Taylor: I am doing well Tim. How are you?
Tim Blankenship: Doing well as well. That didn’t sound right. Doing well also. So, where do you want to start? We connected because you provide a service that my clients need and kind of vice versa many times.
Jennifer Taylor: Right.
Tim Blankenship: Maybe you could just start off with talking more about what the CDFA designation is and specifically what you do for those that aren’t aware.
Jennifer Taylor: Sure. Absolutely. So, it’s a somewhat known certification, but I would say it’s a lot lesser known than, for instance, a CPA or a CFP, a Certified Financial Planner. So, what I am is a Certified Divorce Financial Analyst and that is certified by the Institute of Divorce Financial Analysts.
So, what it really means is that I have received specialized training on divorce specific topics. So, tax implications of divorce, a lot of the nuances that you’ll find and looking at short term and long term impact of decisions that are often made around property division within the divorce process as well.
Within that certification, it requires you to have a financial background or to have at least acquired some experience within the field as either an accountant, a CPA or a CFP or there are some other designations as well. So, most of them you will find out in the field also have those designations.
Tim Blankenship: Got you. When it comes to, with what you do, it’s obviously specific to divorce. How does this, I don’t know if this is a good question or not. How does this interface with say, mediation? Do you consider yourself a mediator or how do you divide those lines?
Jennifer Taylor: Yeah, that’s a great question. So, there’s a natural kind of relationship between the services that I provide to my clients and the mediation process. I guess from an idealistic standpoint, I would love if the majority if not all of my clients were approaching me from a standpoint of wanting to be amicable, wanting to work together, wanting to take more of a mediation like approach.
The way that that gets incorporated into my services is that, and I’ll get into some of those details as we kind of move along in the podcast, but a lot of it has to do with looking at the goals and priorities that you and your spouse have if you’re working together and really trying to align property division outcomes to those goals that both you and your spouse have.
So, the ideal outcome is going to be that we’re checking off as many of those boxes for both of you as possible, but through that is a natural mediation process itself. So, I bring you 2 together, we discuss those goals and priorities, we look at property division settlement scenarios that address those and then we work together through what you would typically see in a mediation setting of the back and forth and the education and explanation and pros and cons and things of that nature. So, a lot of overlap there and a lot of similarities with the way that I approach it as a mediator would as well.
Tim Blankenship: Got you. Because you are a CPA and you’re also a Certified Divorce Financial Analyst, is that why you focused your marketing efforts more on the financial end of things as opposed to say, offering mediation? Mediation, like you say, obviously is going to play a role in all the clients that you’re dealing with, but you market yourself more as the financial end as opposed to mediation. Would that be correct?
Jennifer Taylor: That’s correct and I have received training as a divorce mediator, so I can provide assistance or guidance in some of the other areas, but I tend to like to practice on specifically the property division section of that and on that note, I end up really supporting, I actually have a client right now who I am representing as an advocate, meaning that I’m working with her specifically to put together proposals and to coach her through the mediation process.
So, that’s a little bit of a different play on that and we can get into some more of those details throughout the rest of the discussion, but it can take a lot of forms. It can look a lot of different ways. I think everyone’s got a very unique situation, but when it comes to, I would say more of the custody issues and things like that, I prefer to guide my clients to work with mediators that are trained specifically in that area and have more expertise than I do.
I want to make sure that they’re aligning to the best resources possible and I think that’s another area to point out that just because you go to work with a mediator doesn’t mean that you have to approach every aspect of the divorce process with them. So, it’s very easy to scope out working with 1 mediator to handle parenting plans or custody issues and you can carve out and scope out the property division with another mediator as well.
Tim Blankenship: So, you’ve kind of carved a niche in the mediation field related specifically to finance and division of property and things of that nature.
Jennifer Taylor: Yeah. I’d say that’s accurate.
Tim Blankenship: Got you. So, that said, and obviously I can see the value and that’s why I refer clients to you, the value that you bring to the table in helping people through these financial aspects. What would you say as far as situations that would make sense to use your service?
Jennifer Taylor: Yeah. So, property division can often be a very significant portion of the divorce process. You know? Custody issues can often be at play, but when you’re talking about the financial picture, this is going to be something that is going to impact all aspects of your life, including your children and your family environment.
So, for me, looking at, what I try to explain to people, there are some cases where I don’t think that you’ve got to worry too much about bringing in financial experts and that’s if you’ve got a lot of cash, liquid assets, you don’t have a lot of complexity at play.
So, you can probably manage that on your own, but as soon as you start to really introduce some complexity, for instance a marital home, if you’ve got home ownership and that’s going to be an area you’ve got concerns. For instance, maybe 1 party wants to stay in the home.
If there are significant parts of the marital basket that require valuations, so for instance a pension plan or retirement plans, executive compensation, stock options. If there’s a lot of concerns around separating out separate versus community property, if there’s a big imbalance of power or education or knowledge that exists between spouses.
I often find that to be a big area where I can add a lot of value. For instance, it’s very common to see that 1 spouse kind of controls the financial picture and often has most of the information and not that that’s necessarily intended to be a disadvantage, but I see it play out all the time where either someone is afraid to jump in and ask questions out of fear of sounding like they don’t know what they’re talking about.
Tim Blankenship: Right.
Jennifer Taylor: Or just dynamic between the couple and that can come into play with the entire divorce situation. I just find that if that imbalance exists, that this process can level the playing field and can help to provide education so that both parties feel like they’re making confident and informed decisions.
Tim Blankenship: That makes sense and that’s kind of a good segue into my next question, which is what are some of the most common financial mistakes people make during the divorce process as far as what you see with what you do?
Jennifer Taylor: Yeah. So, I alluded to a couple of those things where I can really provide the most value and I would say what I see most commonly is related to the marital home because there is often 1 of the 2 spouses or maybe both, maybe they haven’t decided who’s going to keep the home, but regardless, in today’s world especially, with where we’re at in the housing market and what happened not too long ago in terms of the contraction in the market, we’ve got a lot of situations where people aren’t necessarily willing from not only an emotional standpoint, but also a financial standpoint to walk away from the investments that they’ve made in homes and the equity that’s been built up knowing that it’s going to be very challenging to find something relatively similar or from a living standpoint, same kind of living expectations.
So, really understanding what you’re getting yourself into and whether that’s the right decision to make and whether it’s something that on the outside of divorce as you’re moving forward, is it something that you’re really going to be able to handle financially.
I think it’s a big aspect. So, part of what I do, I tend to work with both spouses and specifically that spouse that wants to keep the home to model out what their financial picture’s going to look like so that they’re truly confident and have a clear understanding that they’re going to be able to take on that financial burden of that decision. So, that marital home aspect is one of the biggest mistakes that I see people making because they’re not really clear on what that looks like and can find themselves in a bit of a pinch.
Tim Blankenship: Can I ask you, regarding mistakes?
Jennifer Taylor: Sure.
Tim Blankenship: In the home, related to keeping a home perhaps when they shouldn’t or what like, for me, the reason I’m asking this, it seems most of the time, at least 9 times out of 10, 1 spouse will want to keep the home, whether or not they’ve even, and usually they have not discussed or even considered what that looks like, meaning the ability to refinance.
Jennifer Taylor: Exactly.
Tim Blankenship: The ability to qualify, what that payment’s going to look like and then alternatively, what is that buyout going to look like? Is it going to come from an offset from a pension or are they going to try to pull some cash out and do they really even need the home that large to begin with?
Jennifer Taylor: Absolutely.
Tim Blankenship: Yeah. Then the down side, I was at a wedding on Saturday, talking to some folks who we know. We talked about what we do. Of course, everyone says oh, I’m divorced or what have you, so came the conversation where a spouse said she really wanted to keep the house. I did a buyout. It was at the top of the market. The market crashed. Now she’s upside down because of the buyout. I think that was kind of what you were alluding to a bit. Know what you’re getting into, some of the down sides.
Jennifer Taylor: Exactly. As another example, one of my clients right now that I’m working with, they are in a position where they are not wanting to sell the house right now because they’re not able to get on the market what they believe the home is worth.
So, we’re working out some creative options with them on future sale of the property and what the terms would look like for them to do that and almost doing a sort of rent back scenario to where you’re looking at the home on the market as if it were a rental property, so there’s some really creative things you can do to avoid making those kind of impulsive decisions because I guess the need is or the feeling is that you need to make those decisions in the midst of the process rather than planning for the best outcome, which could look a little different.
Tim Blankenship: Yeah, I think people don’t realize that there are other options other than just selling and buying out, although those are probably the 2 main ones we see. We’ve had either, like you said, financial reasons starting at a later point, have that with several investment properties with clients where they’ve decided to keep and maintain it and share in the cost and all that until a point when they can sell. Or we’ve had several people that, unrelated to finance or the market, they wanted to keep one of the spouses in the home so the children could remain there until they graduated from high school.
Jennifer Taylor: Exactly.
Tim Blankenship: Disrupt as much as it normally would.
Jennifer Taylor: Right. Right. Some of the other areas that I tend to see some bigger mistakes being made goes back to the valuating assets. If you pick up for instance, a pension statement, 9 times out of 10, you’re not going to be able to look at that and really see what the value is.
I caution my clients just to pay for the cost of valuing assets like a pension or even executive stock options. A lot of people don’t know that you can actually have rights to options that haven’t yet vested due to certain situations.
I just encourage them to put everything out on the table so that we can talk about what really needs to be valued, especially if it’s considered to be something worth a significant proportion of what that marital basket looks like because if they don’t value that right, it could definitely come up as a surprise down the road.
Then along those lines too, as I’m sure you’re well versed with all of the work that you do on the documentation side, but just ensuring that those retirement accounts are treated correctly throughout the divorce.
If a QDRO is needed, then ensuring that those are taken care of and done the right way because I can’t tell you how many times I’ve had people call me that are divorced and did not handle that accurately and are now trying to figure out how to go about fixing that, so that they get the proper rights to the assets that they believed that they had access to.
Tim Blankenship: Yeah and it happens more often than people think. I say the majority, well maybe 50 percent of the QDRO’s we handle come from people who have divorced years in the past.
Jennifer Taylor: Right.
Tim Blankenship: And not with us because we’ll make sure when we have clients that we know, into the judgment we know that they’re going to need one, we’ll let them know of their options.
Jennifer Taylor: Right.
Tim Blankenship: But because most, in my experience, family law attorneys don’t handle the QDRO’s, they refer them out to a QDRO attorney or someone like us that the clients, they’re done with their divorce. They’re happy or unhappy or whatever the case might be, but they think they’re completely done and then they realize 5, 10, I’m working on a 20 year old divorce case where they never did the QDRO and now they don’t know where the other party is.
So, it can be a bit more complicated just to get those types of things, get everything shored up when you’re dealing with it and not let some of those things lie. Because we don’t want people calling me saying we’ve, I just realized my spouse retired 5 years ago and I haven’t been getting paid because we never did the QDRO.
Jennifer Taylor: Yeah. I’ve got a client who called in and her ex husband’s actually going through a 2nd divorce, so they’re trying to weed out what belongs to her and what belongs to the 2nd divorced spouse. It’s tough. I mean it gains complexity as time passes. The sooner you take care of it, the better.
Tim Blankenship: It sure does. Let’s change gears here a bit. I want to talk more about your kind of process, procedure, intake, that type of thing.
Jennifer Taylor: Yeah.
Tim Blankenship: I work with you in the essence of if we get into a kind of financial quagmire, if you will. There’s issues that go beyond my level of expertise or even comfort level where I feel.
Jennifer Taylor: Right.
Tim Blankenship: They should speak to someone in your shoes. They can give them the correct answers, so we’re not playing the guessing game. Plus, it allows me to keep them kind of with my services. They’re not having to go to attorneys and go somewhere else if I can help it. Someone, say here’s your top 2.
It makes me look better as well. But how, as far as the service you provide, is it different when say someone calls you on their own accord? Like, they’re not working with an attorney, someone like myself or they are doing their own divorce or they have attorneys, does your service change? How does that impact how you help someone?
Jennifer Taylor: Yeah. I kind of look at it in 3 primary buckets as to how I’m helping clients that come in, depending on what that approach looks like. So, from a more DIY or self represented side, you do not need to have an attorney to work with me and at the end of the day, these are people that are either working together with their spouse or they are amicable and I’m representing them from a 3rd party financial neutral standpoint.
They’ve got financial complexities. They want to make sure they’re making the right decisions, so I’m either helping them in the context of helping to value certain assets that they need on a standalone basis to reach agreements that they have.
So, those are more 1 off limited scope type services or I have my divorce financial planning, slash mediation packages, which are the more full service comprehensive start to finish. Meaning that we’re not done until you and your spouse have reached an agreement on the property division and you fully understand what that looks like.
So, that’s where, at the end of the day, I sit down with them. We do that same analysis that I was referring to earlier about the goals, priorities, what that looks like and do my best to work with those clients all the way through to the end to ensure that they’re obtaining or achieving as much of that as possible. From a mediation standpoint, if couples are working with an outside mediator, then I can also provide services where I’m either again, representing both of them as a neutral or I play the role of advocate.
If there’s 1 that wants to seek information to bring in to mediation or that mediator needs a financial expert that can be relied upon for some of these specifics or valuations or scenarios that they can then bring in or they can bring me into mediation. I’ve done that in the past as well. So, that looks a little different. Then finally, the litigated cases.
That’s really where I’m going to be representing 1 of the 2 parties and I’m either, most predominantly contracted directly from the attorney to really represent that particular individual’s case and to ensure that we’re getting the most optimized outcome possible given the details of that case. Really those 3 buckets. The DIY, mediated and litigated. They’re all a little different, but my either ala carte evaluation type services or the full comprehensive divorce financial planning packages are best suited for those.
Tim Blankenship: Got you. Yeah. Your service works great for me as far as a complement to what I do because I can either, if they have a completely financial related, like I’ve got many clients who are 20 years married. They’re getting divorced and the children are grown, so it’s not a custody issue. It’s financial.
Jennifer Taylor: Yep. Exactly.
Tim Blankenship: They can either, I can send them to you to get the financial situation handled. You either, as you say, treat it more like a DIY, where they have mediate and paperwork in the background, but they need some additional financial assistance on that end.
Or if they come to me and right off the bat, they want to be amicable, but they’re becoming frustrated because they’re not able to come up with an agreement, they can use even your more comprehensive mediation package. Once you’ve got those issues settled, you just come right back to me.
Jennifer Taylor: Exactly. It’s a pretty seamless process because at the outset of it, we’re really sitting down and terming out all of those property division agreements that are made. So, once both they and their spouse are comfortable that they’ve reached the proper agreement, then I’m just literally handing that over to you and then it’s that seamless process into the divorce paperwork and filings that you do.
Tim Blankenship: Exactly. Exactly. I was reading an e book or a book, not a book on tape, but an audible book called the E Myth. I don’t know if you’ve ever?
Jennifer Taylor: I think I’ve heard of that.
Tim Blankenship: Yeah. Not to give any details, but one of the, he has one that’s specifically related to attorneys and that type of field. It was interesting. It said one of the most important things they recommend attorneys do is they come up with some kind of flat fee pricing one way or another.
Jennifer Taylor: Right.
Tim Blankenship: I was, this book maybe 2 months ago, but when I started my business, I decided to go on a flat fee rate for all of our services we provide mostly because I want people to know what they’re getting into up front and I didn’t want to have to deal with billing.
Jennifer Taylor: Absolutely.
Tim Blankenship: I was just clicking around your site before we had this call and I saw that you’ve also taken kind of a flat fee approach. Can you talk more about your, how you do your pricing for your services?
Jennifer Taylor: Yeah. I couldn’t agree with you more. I think the most frustrating thing, I have been through my own divorce and one of the things that bugged me the most was that retainer process with an attorney and you’ve got up front that initial amount and then cross your fingers and hope that you’re not going to be severely exceeding that and that you’re going to get good communication along the way on what you are.
That was one of the things I just did not want to do and as a financial professional and having the expertise in my line of business, I feel that I should be able to estimate the type of time it’s going to take me and for me to take that risk for my clients to ensure that I’m committing to them. That I’m going to work with them in partnership to reach that agreement that they’re looking for and what’s comprised in that for me.
For me, a flat fee service is just providing my clients with that transparency and that commitment that they’re going to get my full service package and on my website it shows all that’s included in that scope, but at the end of the day, they need to know what they’re getting and that they’re not going to be surprised by new costs or added costs along the way.
I think we’re very clear through the process on what those could look like and what they may be. That flat fee, to me is the way to go. I think it’s the way that most industries are moving these days and it’s the probably most transparent and clear way to be with your clients.
Tim Blankenship: Yeah and this probably rang true for you as well as it does for me. In this book it said, if you are the professional you think you are, you should be able to come up with some fees where it’s going to pencil out at the end of the day. Yes, you may take a hit on one, but some are going to be easier on occasion for that same fee.
That’s how it is for me. We have our flat fees. Sometimes it’s much more than I expected, but I never have gone back to a client and said hey, this took longer, had a reason for asking for money. I’ve just took it on the chin and realized some were much easier. Some were just going to take longer. Are you finding that to be true with you as well?
Jennifer Taylor: I completely agree. I think it’s a demonstration experience when you see flat fees because as long as you do your homework and you can check out that they’re not so good to be true or on the other end of the scale, they don’t seem so high that you’re seeing these people build in a lot of buffer, then you’re going to get good service and it should be demonstrating of the experience that professional has.
Tim Blankenship: Exactly. One of the other questions I want to ask you is how your flat fees compares kind of to other divorce professionals and we kind of touched on the retainer situation. I have done countless podcasts and videos on how that works because I’ve seen awful situations, people coming to me after putting 5,000 dollars as a retainer with a divorce attorney and they come to me because their money is gone and when I look at their case online, all they had was the case filed, a few emails and you know, at 4, 500 dollars an hour, it’s 10, 12 hours of work and that’s it.
That money’s gone and the misunderstanding people have with retainers is I don’t know if they’re not reading the retainer agreement or not, but many of them have what’s called an evergreen.
Jennifer Taylor: Clause, yeah.
Tim Blankenship: Yeah, which means once that 5,000 is spent, they don’t have to ask for more money. They continue working past that retainer.
Jennifer Taylor: And surprise. Yeah.
Tim Blankenship: Yeah. I worked for a law firm years and years and years ago before I started this business and we got more people wanting to settle at billing because they’d get their new bill for another 10 or 15,000 dollars and they just can’t figure out how that happened.
Jennifer Taylor: Right.
Tim Blankenship: It’s very dangerous.
Jennifer Taylor: It absolutely is and I think you can attest to this with your line of business too, is attorneys can definitely handle a gamut of aspects of the divorce process, but seeking specialists that are aligned to the line of work that you need and the caliber of work that you need, for instance if it’s legal document preparer and you’ve got everything handled, you don’t need a high caliber attorney to handle that for you.
Same for the financial aspects of things is, often times an attorney is well versed enough in the financial aspect of divorce. They’re most likely going to be charging the highest end of the spectrum that you can find because a lot of them are not necessarily comfortable doing that, so on a really rough basis, when you’re considering the average hourly fees of family law attorneys in California, your average CDFA is going to come in around half of that on an hourly basis.
Of course I’m in a flat fee field, but if you were to break it down, you’re going to find that we are very affordable alternatives and more specialized alternatives when it comes to property division.
Tim Blankenship: I always tell folks, ideally, unless one of the spouses are being really inappropriate and hiding assets where you really need an attorney to litigate and protect your quote, unquote rights. I mean, ideally if someone’s looking for a more financially sound way of getting through a divorce, use someone like me for the back end in dealing with the courts.
Use someone like you to handle the financial decisions and get that shored up and then if you want to have a judgment drafted based on this comprehensive discussion that you have and the paperwork that I take care of, they can always take it to have it reviewed by an attorney if they want, see if there’s any out points.
Jennifer Taylor: Absolutely.
Tim Blankenship: I think from a financial standpoint, that’s going to be the best route that someone could go.
Jennifer Taylor: Yeah, most cost effective for sure and without, not lacking quality either, so I think if you’ve got that all wrapped up, it’s a very easy review on an attorney and that you’re going to be able to more accurately manage from a time perspective.
Tim Blankenship: Exactly. Now, you are in San Clemente. Is that correct?
Jennifer Taylor: That’s right. Southern California.
Tim Blankenship: Yep, so with my business, I handle a lot of virtual clients. My service area, as far as what I consider, is all of California since the court process is relatively the same everywhere. So, that’s my area of expertise in California divorce and we deal, probably 90 percent of our business is virtual.
Jennifer Taylor: Right.
Tim Blankenship: With internet and people ask, well how am I going to get to you? I live in northern California. It’s this thing called the internet.
Jennifer Taylor: Right.
Tim Blankenship: I’m so surprised that people have issues or concerns with that, but you also provide services virtually over the phone, right? It’s not all, you don’t have to hang a shingle, or someone walk in or drop by?
Jennifer Taylor: Right. Yeah.
Tim Blankenship: I love that.
Jennifer Taylor: I know. I do too. Of course, I think we all do and the world’s gone virtual and divorce services are very much moving that direction. It all comes down to the comfort level of the clients and what they’re used to dealing with, but I will tell you that most of my clients I’ve encountered have not had any issues handling the process virtually.
Of course, when I’m working on more of my ala carte or focused services, those are pretty easy because they’re really kind of a back and forth or more linear dialog. On the divorce financial planning packages or mediation packages, those are a little more complex, but still completely manageable.
I use a platform called Zoom which allows us to share screens. I submit reports for them so that they can actually review those reports and those scenarios together with me via that platform. We have active dialog. We can do everything as effectively as if we were sitting in the same room. So, I don’t see it as any form of barrier.
Tim Blankenship: Yeah. The only barrier usually is the client coming on board to understand that there are things like Zoom and other software products where you can have a face to face without really being face to face.
Jennifer Taylor: Absolutely. So, there is a little set up sometimes and a learning to getting that set up, but usually it’s something that’s pretty easy to manage.
Tim Blankenship: Exactly. Well, I think we talked about a lot of the topics I wanted to hit on. Was there anything that I didn’t ask that I should have asked, or that you’d want to say?
Jennifer Taylor: No. I think this time was great. I think our services can be a very good compliment to each other and I, as you’d mentioned, I just would encourage anybody that’s got the financial complexities at hand to reach out to a CDFA. If it’s not me, a lot of us do free consults and use them. Use people to understand whether it’s a right fit for you and contact Tim or myself and we can get you taken care of.
Tim Blankenship: And on that note, let everyone know how they can get a hold of you. Maybe website, phone, and that sort of thing.
Jennifer Taylor: Yeah. You can reach me through my website at www.squareonedivorce.com or you can find me on Facebook at Square One Financial Services Inc. You can also find me on YouTube. I have a YouTube channel, Jennifer Taylor CDFA and I’m also on Instagram.