Financial issues are a part of every divorce even when the parties are not particularly wealthy, and the divorce is not adversarial. Going from one household to two means dividing up assets and debt as well as determining how to pay expenses going forward. If there are children, there are added concerns as parents try to maintain their child’s lifestyle. Financial experts are helpful in any divorce, but they are an essential component of a successful collaborative divorce.
The collaborative process involves a team approach to divorce. Each side has an attorney, while financial and mental health professionals are brought in to assist the parties in coming to an agreement. The role of the financial professional is to provide a neutral analysis of the parties’ situation and help the parties make well-informed choices as they negotiate a financial settlement.
The financial professional can help in the following areas:
- Gathering financial information
- Preparing a statement of net worth for each spouse
- Valuing assets
- Budgeting and financial planning during and after divorce
- Analyzing the tax impact of support payments and division of property.
This information is invaluable to the divorcing couple as well as to other members of the collaborative team.
The parties benefit from independent and clear guidance regarding how their finances will be impacted by divorce and what changes they may need to make in their lives to accommodate their new circumstances. This is particularly important in situations such as where a spouse has been out of the workforce for many years or has little financial knowledge, or the family was living an extravagant lifestyle that can no longer be afforded once the parties live in separate households.
Good financial information also helps the parties’ attorneys in negotiating a settlement. The financial expert can evaluate the effect of different settlement options.
Mental health professionals can also use the financial information to assist the parties in focusing on the practical aspects of their situation, rather than the emotional issues, which may keep them from finding agreement.
Finances are an added reason for stress and anxiety in divorce. A financial expert cannot eliminate those feelings but can provide valuable guidance so the parties understand their new reality and can prepare for it effectively.
If you are considering divorce, contact me for a consultation.