When couples begin a marital dissolution and choose the Collaborative Divorce process, we often find that one person is thoroughly knowledgeable about their finances and the other one knows very little.
In these cases, one spouse has paid the bills during the marriage and has been in charge of investments. That person has taken care of all the financial obligations. Suddenly, when the divorce begins, the spouse who has been in the dark about the finances realizes she or he needs more information about the family’s financial situation.
The uninformed spouse often does not have a clue and says, “I trusted my spouse who took care of it all for us.” Now, that spouse needs to know everything about the finances in order to be informed as to a fair division of assets as well as analyze any support issues.
Neutral Financial Professional Advantages
In a Collaborative Divorce, it is assumed that since the parties’ goal is to have as amicable a divorce as possible, they will both be completely honest with each other. At the beginning of the process, they commit to being fair and open with each other. They also like the cost savings of not making court appearances.
At our first team meeting together, we give them a list of all the documents required to make a final property division and support agreement. We explain, in a clear and nontechnical way, what they need to know so they can enter into a reasonable conversation about financial issues in the case.
In some cases, we may need to do tracing to determine which assets may be separate, which are community property, and if some have prorated amounts of each. Our goal is to help the couple come to an efficient and expedient resolution.
Unfortunately, there are occasions in which one party withholds information. They seem to think they can “pull one over” on their soon-to-be ex-spouse by holding back important records.
When financial documents are shared, the financial expert, who is often a forensic accountant, can tell, almost immediately, if any financial information has been withheld. The attorneys and the spouse will be alerted to the lack of openness by one party, and they can all decide if they want to continue the collaborative process or go forward with traditional litigation.
The advantage of having a neutral financial professional such as a CPA is that because they are neutral, they can recommend options for a financial path forward for the parties to consider. That path forward will help to remove much of the parties’ financial anxiety about the future that makes the traditional divorce process more difficult.