In the last twelve months, with the pandemic impacting many families’ financial bottom line, I have had more people concerned about the financial impact of a divorce or separation. The financial strain of job loss or impact illnesses has had on families is evident. The pandemic has created financial chaos for many people. Families that have been used to having their finances run smoothly are out buying groceries and their credit cards get denied. The result is embarrassment, confusion and anger that may be directed at their partner.
Short of custody and visitation issues, financial issues are at the top of concerns to be resolved in any divorce. It is common to learn that one member of the couple knows about every penny in the estate and the other knows little to none. This in-balance of knowledge adds to the anxiety and stress of a divorce.
In the Collaborative Divorce process, the financial neutral is incredibly helpful in helping both parties become organized and fully educated about the finances. They gather all the financial information. Independently analyze and inquire of both parties so that they are certain all questions are answered. The financial neutral is available to run a cashflow analysis, look at income available for child or spousal support, and help to analyze the financial goals of the couple. They can even help with retirement planning. They pull out every tool they can to help resolve the financial concerns and division of assets.
An important part of the Collaborative Divorce process is not just planning financially for today, but also looking forward to the next 5, 10, or 15 years, or even longer. A judge in a traditional litigated divorce is focused only on today without consideration for the impact their orders may have in the long run. The Collaborative Divorce process is designed for both parties to emerge from the divorce with a financial plan that will serve them well not only in the present but for years to come. It is not uncommon for the team to get creative and look to Social Security benefits or a unique division of assets to allow for financial security in the future.
As the team leader the financial neutral supports the whole collaborative process. If necessary, the financial neutral will meet with one spouse more than the other spouse because they need that time for a full understanding of the family’s assets and debts. The team discusses why this additional time is necessary and everyone is on the same page. As a neutral they are ensuring that both parties are making educated decisions. With a full education, a team of professionals searching for a win-win result, the collaborative dissolution provides for asset protection and a secure financial future.
