In a collaborative divorce, spouses who can communicate with a neutral financial professional is key to helping them understand their current financial situation. This helps them reach a settlement agreement that is in the best interest of both parties.
There is often an imbalance in that one spouse has less financial knowledge than the other. The collaborative process works to bring them both up to speed before they make their financial decisions.
How Communication with a Financial Professional Helps
The process begins with a team meeting where the members of the collaborative team are given the tasks they need to perform. The steps the financial professional takes are generally:
- Identifying the financial issues for which the spouses need help.
- Gathering the information by providing the spouses a list of documents that the professional needs. Even if it is expected that only one spouse has access to the documents requested, for example, if one spouse owns a business and the documents are kept at the business location, the request goes to both parties. This way, in the collaborative process, both parties are aware of what is happening with all financial documents.
- Interviewing the parties. Even if an interview is with only one spouse, the other is invited so there is no appearance of a conflict of interest by meeting unilaterally with just one party. Interviews may be done in-person, but are now more commonly via Zoom.
- Meeting with the entire team after documents are provided and evaluated. Often, reports are sent in advance of the team meeting so the spouses can have their questions ready.
Any power imbalance is addressed by spending more time with the non-financially educated person. The pace is slowed down to provide time for questions to be answered.
All the information is put out there concerning asset division, Social Security income, retirement plans, selling the house, etc. The financial professional runs all these variables, creating alternate scenarios, such as selling the house now, selling the house in five years, or not selling the house. When the spouses see these variables, they can make informed decisions about their property division and support and understand what their future looks like.
A Financial Professional is a Vital Member of the Collaborative Team
The collaborative process works well to help both parties understand their financial situation and to help them build models of what their post-divorce financial life will look like.
For more information about how a financial professional can assist your collaborative law team, contact Ron J. Anfuso, CPA/ABV, An Accountancy Corporation.