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CDFA Module 2 Exam Questions And
Answers Updated 2024/2025
Asset most likely to be couple's most valuable? - answer✔Family Home
Separate Property - answer✔Property a person brings into the marriage; inherits during the
marriage; or receives as a gift during the marriage.
Marital Property - answer✔Everything acquired during the marriage, regardless of which
spouse owns the property (including the increase in value of property in some states).
Key documents for collecting financial information - answer✔financial affidavit, and
asset/liability comparison worksheet
Ways in which assets are traditionally hidden: - answer✔1) person denies existence of
asset; 2) assets transferred to third party; 3) person claims asset was lost or dissipated; or
4) person creates false debt
First place to look for hidden assets? - answer✔Tax returns; good idea to look over past 5
years.
Appraisal - answer✔procedure for determining FMV of asset when it is sold or divided
Arbitration - answer✔submitting dispute to someone who is not a judge; decision is usually
binding and final
Arrearages - answer✔Difference between amount of spousal/child support paid, and
amount required under court order
Assets - answer✔
Assets - answer✔Cash, property, investments, goodwill, and other items of value (as
defined by state law) that appear on a balance sheet indicating the net worth of an
individual or a business.
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Asset Inventory - answer✔Collection of financial data that includes information on assets
and liabilities. Key documents used are the Financial Affidavit and Asset/Liability
Comparison worksheet.
Bankruptcy - answer✔See Chapter 7 Bankruptcy and Chapter 13 Bankruptcy.
Best Interest of the Child - answer✔A discretionary legal standard used by judges when
making decisions about custody, visitation, and support for a child when the parents are
divorcing.
Bunching Deductions - answer✔Tax strategy that involves "bunching" itemized deductions
so that they are high in one year and low the following year. The standard deduction can be
used on the alternate year.
Career Asset - answer✔Assets tied to one's career (health insurance, stock options,
retirement plans, etc.)
Certified Business Appraiser (CBA) - answer✔An individual who is certified in business
valuations. Change of Venue: A change of judges or geographical location, requested by a
party to the action who feels that the change is justified by state law.
Chapter 7 Bankruptcy - answer✔Type of bankruptcy filing that allows you to liquidate all of
your assets and use the proceeds to pay off your debts, erasing your debts that cannot be
paid off in full. All unsecured debts are forgiven and all assets over statutory minimum
protected amounts are forfeited.
Chapter 13 Bankruptcy - answer✔Type of bankruptcy filing that allows you to develop a
pay-off plan over a three-year period. Some of the debts may be discharged.
Childcare Credit - answer✔(dependency exemption) a nonrefundable childcare tax credit
available to the custodial parent who pays for child or dependent care expenses so that
they can be gainfully employed.
Child Contingency Rule - answer✔States that if any amount of spousal support specified in
the divorce decree is reduced: (a) upon the happening of any contingency related to the
child; or (b) at a time that can be clearly associated with a contingency related to the child,
then the amount of the reduction will be treated as child support, rather than spousal
support. These payments will be considered child support when the payments begin. (IRS
Code Section 71(c)(2))
Child Support - answer✔The amount of money paid by a non-custodial parent to the
custodial parent for a child's day-to-day expenses and other special needs. Each state is
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required by Congress to have written child support guidelines and enforcement
procedures.
Child Support Guidelines - answer✔A series of mathematical formulas used to calculate
the amount of child support to be paid in some cases. Congress has mandated that states
adopt child support guidelines and support enforcement procedures.
COBRA - answer✔Consolidated Omnibus Budget Reconciliation Act (COBRA) law passed
in 1986. It allows an ex-spouse to continue to receive health insurance coverage from
his/her former spouse's employer if the employer has at least 20 employees, for up to
three years after the divorce. Premiums for this coverage are typically higher than when
they were covered under the employer's plan. It should be noted that the normal COBRA
provision states that if an employee leaves or is fired from a job, he or she can get health
insurance from that company for 18 months. However, in the case of a divorce it is
extended to three years or 36 months.
Collaborative Divorce - answer✔A team approach to divorce in which divorcing couples
obtain professional help from specialists in the legal, financial, and mental health fields;
when needed, additional professionals (including child/parenting experts) may be called in
to help the couple settle their case.
Collaborative Law - answer✔Collaborative Law is a new dispute resolution model in which
each party retains their own attorney who has gone through specialized "Collaborative
Law" training. The lawyer's only job is to help settle the dispute. All parties agree to work
together respectfully, honestly, and in good faith to try to find "win-win" solutions to the
legitimate needs of both parties. No one may go to court, or even threaten to do so. If that
should occur, the Collaborative Law process terminates and both lawyers are disqualified
from any further involvement in the case.
Collusion - answer✔An agreement between two or more persons where one of the parties
brings false charges against the other. In a divorce case, the husband and wife may agree
to use adultery as a ground in order to obtain divorce more quickly, knowing full well that
adultery was not committed. Collusion is illegal.
Common Law Marriage - answer✔A judicially recognized marriage in some states, usually
based on cohabitation where no formal marriage ceremony has taken place. See page 35
for more details.
Community Property - answer✔In community property states, any property not deemed
"separate" (i.e., owned before the marriage or obtained by gift or inheritance) is
"community" property and will likely be subject to a 50/50 division. Any property acquired
in a community property state retains its community property status no matter where the
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couple moves. There are currently eight states that have adopted community property
laws: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, and Washington.
Alaska has an optional community property act (AS 34.77.090), and Wisconsin is
essentially a community property state, but there are exceptions to the typical community
property rules. Most other states follow the rule of "equitable distribution" of property.
Complainant - answer✔The one who files the suit; same as plaintiff.
Complaint - answer✔This is a legal document filed by the plaintiff to start the divorce
process. It states that the marriage has ended and lists the grounds and claims for the
divorce. In some states it is also known as a petition.
Condonation - answer✔The act of forgiving one's spouse who has committed an act of
wrongdoing that would constitute grounds for divorce. Condonation generally is proven by
living and cohabitating with the spouse after learning that the wrongdoing was committed.
It is often used as a defense to a divorce.
Contempt of Court - answer✔The willful failure to comply with a court order, judgment, or
decree by a party to the actions. Contempt of Court may be punishable by fine or
imprisonment.
Contested Divorce - answer✔Any case where the judge must decide one or more issues
that are not agreed to by the parties. All cases are considered contested until all issues
have been agreed to.
Corroborative Witness - answer✔A person who testifies for one of the parties and backs up
their story.
Cost Basis - answer✔The original value of an asset for tax purposes.
Court Order - answer✔A written instruction from the court carrying the weight of law.
Orders must be in writing. Anyone who knowingly violates a court order can be held in
contempt of court.
Coverture Fraction - answer✔Used to separate the portion of the benefits in a pension plan
earned during marriage from the portion earned outside of the marriage. Under this
approach, the alternate payee's share of the benefit is based on the participant's benefit at
the participant's date of retirement (when it is highest). Once the participant's final benefit
is calculated, the marital portion is determined by multiplying the accrued benefit by a
coverture fraction: the number of years married while earning the pension divided by the
total number of years of service under the plan until retirement. The alternate payee would
then be entitled to half of the marital portion of the ultimate pension.
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