The Neutral Financial Professional in Collaborative Divorce: Saving Your Family Time and Money

Are you considering divorce? If so, you’re likely familiar with the emotional strain that comes with it. But amidst the whirlwind of emotions, it’s easy to overlook the importance of your family’s financial future when considering your divorce options. That’s where a Neutral Financial Professional steps in as an invaluable member of a Collaborative Divorce team. Let’s delve into what a Financial Professional does in this process and how they can help your family save money while preserving your financial well-being.

Collaborative Divorce

First and foremost, it’s essential to understand the Collaborative Divorce approach. Unlike traditional litigated divorces, where trial lawyers are retained and there is the constant threat or reality of a court battle, Collaborative Divorce emphasizes transparency, cooperation, and durable resolutions. The Collaborative Team typically comprises of specially-trained lawyers for each spouse, a team leader known as a Neutral Facilitator, and a Neutral Financial Professional. All professionals, once the process starts, can only help with out-of-court dispute resolution, and they are prohibited from being used to fight in court.  The Collaborative Approach fosters open communication, leading to more amicable resolutions and, compared to litigated court battles, significant cost savings.

Role of the Neutral Financial Professional

Now, let’s shine a light on the role of the Neutral Financial Professional on the Collaborative Divorce team. As a Collaborative Lawyer, I often emphasize the pivotal role they play in ensuring fair and sustainable financial outcomes for both spouses. Here’s how they do it:

1. Financial Clarity

Divorce involves complex financial matters, from asset division to spousal support and child support. A Neutral Financial Professional brings clarity to this complexity by helping each of you analyze your financial situation.   This is important, as it is common in divorce for one spouse to be less knowledgeable about the family’s finances than the other spouse.  This disparity in knowledge oftentimes causes one spouse to freeze in the face of making long-term decisions out of fear of making the wrong decision, causes long delays and increased fees for both spouses.

Accordingly, the Financial Professional helps explain your family’s assets, liabilities, income, and expenses to provide a clear picture of your financial standing. This clarity is crucial for making informed decisions during negotiations, preventing surprises down the road.

2. Budgeting and Your Financial Future

One of the keys to a successful post-divorce life is considering your financial future. A Financial Professional helps you develop a realistic budget tailored to your new circumstances. By helping you consider future expenses and income, they assist in crafting financial agreements tailored to each of your interests. This proactive approach lessens the likelihood of financial strain and oftentimes creates mechanisms in the event that circumstances change, preventing the need to run to court for modifications in the future.

3. Tax Implications

Divorce can have significant tax implications that often go overlooked. A Financial Professional may be a Certified Public Accountant who is well-versed in tax laws and can advise on the tax consequences of various options. By bringing up considerations on how to minimize tax liabilities and maximize tax benefits, they can help preserve your assets and optimize your financial situation. This perspective can save you substantial sums in taxes over the long term.

4. Asset Division Strategies

Asset division is a central aspect of divorce discussions, and it’s essential to approach it strategically. A Neutral Financial Professional may be a Certified Financial Planner, and they can help you and your spouse evaluate different asset division scenarios, considering factors such as liquidity, tax implications, and long-term financial implications. They work with you, your spouse, and your Collaborative Lawyers to devise equitable distribution strategies that prioritize your financial well-being while minimizing conflict.

5. Financial Neutrality

Unlike the Collaborative Lawyers who advocate, albeit peacefully and respectfully, for their respective clients, Financial Professionals maintain neutrality in the Collaborative Process. They act as impartial professionals, working in the best interests of both spouses and their children, if any. This neutrality fosters trust and cooperation, setting the table for smoother negotiations and greatly reducing the likelihood of costly litigation (accordingly to research from the Florida Academy of Collaborative Professionals and International Academy of Collaborative Professionals, clients in the Collaborative Process reach a full resolution 85-86% of the time; my own cases show a success rate of around 92%).

How Neutral Financial Professional Can Help Save You Money

Now, you might be wondering how these services translate into cost savings for your family. So the first thing to know is that Collaborative Divorce is not cheap; divorce is not cheap.  But it can be less expensive than fighting it out in court.  Here’s how:

Efficient Resolution

Collaborative Divorce typically resolves disputes more efficiently than traditional divorce court battles. As a Neutral Financial Professional helps foster transparency in financial disclosure, open communication, and interest-based negotiations, the process minimizes delays and eliminates the litigation games, repetitive motion practice, and deposition and trial preparation that can balloon fees and costs in a court battle.

Reduced Legal Fees

The Collaborative Approach encourages spouses to work together to reach mutually beneficial agreements.  The Financial Professional helps clients focus on their interests and the interests of the children (if any) rather than engage in zero-sum positional bargaining.  With Financial Professionals providing essential guidance, discussions are streamlined, leading to quicker and more cost-effective resolutions as compared to court battles.

Long-Term Financial Security

By helping you make informed financial decisions during the divorce process, Financial Professionals help lay the groundwork for long-term financial security. This proactive approach helps to bring peace of mind and mitigate against future disputes and legal battles, saving you significant sums in legal fees and emotional distress.

In conclusion, enlisting the expertise of a Neutral Financial Professional in your Collaborative Divorce team is a wise investment in your family’s future. Their comprehensive financial explanations, strategic option-building discussions, and neutral guidance can help you navigate the complexities of divorce with confidence while saving you time, money, and unnecessary stress. So, as you consider your divorce options, remember that you do not need to do this alone or in an adversarial way—your your Neutral Financial Professional is here to support you and your spouse every step of the way in a Collaborative Divorce.

Adam B. Cordover is co-author of an American Bar Association book on Collaborative Divorce.  He is a member of the Board of the International Academy of Collaborative Professionals and recipient of the inaugural Visionary Award of the Florida Academy of Collaborative Professionals.  Adam represents clients virtually throughout the State of Florida, and he has offices in Tampa, Saint Petersburg, and Sarasota.