Tags
Related Posts
Share This
Money and Divorce
“Divorce is one of the most financially traumatic things you can go through. Money spent on getting mad or getting even is money wasted.” – Richard Wagner
The collaborative process uses a team based approach to help you and your spouse come to a mutually acceptable agreement, stay out of the courtroom, and move forward with your lives. You may decide, in consultation with your attorneys, to use a financial neutral within the collaborative process to help you reach agreement about the financial issues. Just how can the financial neutral help you?
Financial Mistrust
The financial neutral can help address issues of financial mistrust. The financial neutral will help identify the necessary and appropriate data needed to ensure full disclosure of all relevant financial information. Trust increases when you are comfortable that all the assets and liabilities have been disclosed. The financial neutral also has the expertise needed to review tax returns, bank, investment and retirement plan statements, and other financial documents to evaluate individual transactions, changes in account balances, and/or terms and conditions of complex financial instruments. Trust also increases when you are comfortable that you understand your complete financial picture and have had your questions answered.
Financial Fears
The financial neutral can help allay some of your financial fears and anxieties. It’s commonplace for one spouse to handle the family’s finances and for the other spouse to take on some other family chore. A lack of familiarity with the family finances contributes to worry and anxiety about the future. If all the parties agree, the financial neutral will spend some extra time with the spouse who has not been intimately involved with the finances. This extra time may be devoted to creating a new budget, understanding the composition of the family’s finances, or reviewing a projection of income, taxes and expenses. The increased education and understanding diminishes some of the anxiety and concern.
Financial Futures
The financial neutral can help you move forward with your lives. Along with your attorneys, the financial neutral can help you answer specific questions: When do we close the joint bank account? When do we close the joint credit cards? Who can I call to get information about refinancing? How do we handle the payment of unanticipated, one-time expenses for the children? The financial neutral can also help you estimate and review your after-tax income and budget, so that you can develop a plan to save, avoid debt, and pursue your future financial goals.
Financial Security
The financial neutral can help you reach an agreement that you both can live with. The financial neutral can help you evaluate the implications of a financial option that is under consideration. If there is an option to refinance the marital home, how does that change the housing budget and the mortgage interest tax deduction? If there is an option to ‘buyout’ the other spouse’s marital interest in the house by ‘trading’ a retirement account, how is the retirement account valued, since it is taxable? If there is an option for alimony, how does alimony impact the after-tax cash flow for each person? Receiving information about the implications of an option provides the level of understanding needed to make decisions and reach agreement.
The support of a financial neutral in the collaborative process can help increase trust, reduce worry and concern, increase knowledge and understanding, and assist you in reaching a durable and lasting financial agreement.
Share your thoughts here and in your network.