The concept of a financial neutral is not novel to collaborative divorce. In litigation, the parties and their attorneys frequently mutually agree to retain the same financial professional or the courts will appoint an expert to serve on their behalf. If the financial professional is independent and without bias, as professional standards require they be, then this can be a great cost savings to the parties. That is not to say that there will not be dissention in the ultimate findings of the neutral or that the results won’t be challenged, but, in theory, if two financial professionals are provided with the information, their results should be relatively consistent.
The problem with litigation is the attorneys and the courts do not always fully understand the parties’ finances before embarking on an expedition of discovery. For example, there may be a business to be appraised, but all they know is there is a medical practice, nothing more about the complexities of ownership. Likewise, one party might be a wage earner, where the other is a consultant. And, most frequently, one party has assumed the role as the family’s bookkeeper, leaving other tasks to their spouse, neither knowing what the other really does. This ambiguity and uncertainty can lead to a host of document demands, motion practices, and court appearances, simply to establish the scope of what the financial neutral is tasked to do before they can even begin to assist the parties.
In the collaborative approach, the financial neutral is brought on as a team member at the beginning of the process. They participate in the initial meetings and assist the parties with setting forth their planning objectives. In this early involvement, they gain an understanding of the parties’ finances, streamline document requests, help gather information, ask relevant questions and work with the couple to come up with a plan that works best for them. In collaborative, the couple agrees to transparency in all aspects of the process, including their finances. The financial neutral professionals of the LICDP have been working with divorcing couples for many years and use their vast experience to bring focus and clarity to otherwise complex concerns. Regardless of your personal financial situation, the collaborative process can help you come to a resolution that works best for your family.
Written by Nannette Watts, CPA, ABV, CFF