How to Choose Divorce Financial Analysis Software: A CDFA's Guide

Your analysis is what clients pay for, and it's only as good as the numbers under it. So judge divorce financial software first on how it handles inputs and assumptions, and only then on how good the charts look.

When a spreadsheet is enough, and when it isn't

A well-built spreadsheet is flexible and fully yours. For a simple engagement it may be all you need. It starts to cost you when:

• You're on the fifth scenario and can't be sure every formula was carried over
• Support, property and cash flow live in separate files
• An attorney asks where a figure came from, and the answer takes an hour
• Someone else needs to check or continue your work

What to evaluate

Inputs you can trust

Can every line be traced to its statement? Is there one set of inputs, so every scenario draws on the same data? Can you see which statements are still missing before you start?

After-tax comparisons

Two divisions can look equal before tax and be far apart after it. Check how the tool treats pre-tax accounts, embedded capital gains, filing status changes and the tax treatment of support under current law.

Assumptions you control

A pension's present value turns on its discount rate, mortality table and retirement date. A long-range projection turns on returns and inflation. You should be able to see and change each one, and it should appear on the report. Watch for any tool that hides these behind a single answer.

Scenarios that stay separate

Can you branch a scenario, change one assumption, and compare the results side by side, without losing the earlier version?

Hard assets

Try your harder cases: coverture fractions, defined-benefit pensions, RSUs and stock options, business interests and deferred compensation.

Output that holds up

Reports should show their assumptions and be readable by a client, and by an attorney who may have to defend them. Check that they export in formats others can use.

Questions to ask any vendor

1. Show me how a number on the final report traces back to its source statement.
2. Which assumptions can I change, and which are fixed?
3. How do you update for tax law changes, and who checks the math?
4. Can I export the working data, or only the finished report?
5. Can I keep working scenarios private until I choose to share them?
6. How does my work reach the attorneys without being retyped?
7. Who can open client statements, and is access logged?

Test it against your own work

Take a finished engagement where you trust your numbers, and rebuild it from the original statements. Any difference tells you something: either the tool handles something differently, or you've found something worth knowing. Check both pre-tax and after-tax results, and try one late change to see how much breaks.

Keep your judgment in the loop

Software should run the math. Choosing the assumptions and forming the opinion stay with you, which matters all the more if you may be asked to explain your work. Whatever you choose, make sure you could explain any figure without the tool in front of you.

Common questions

Should a CDFA stop using spreadsheets?

Not necessarily. They're fine for simple work. Consider dedicated software when versions multiply, or when others need to check or rely on your numbers.

What matters most in divorce financial software?

Inputs that trace back to statements, assumptions you can see and change, and after-tax comparisons across scenarios.

How should I test divorce financial software?

Rebuild a finished engagement from the original statements, and compare the results with work you already trust.