More often than not, divorce is a stressful and emotional time for couples to go through, and decision making can be easily jeopardized. If you or someone you know are going through a divorce, it is important to carefully review all of the financial aspects, including:
Current and projected budgets
What to do with the house
Retirement accounts and pension plans
Child Support and Alimony
These are just some of the main points to review, but there are many more areas that are often missed during divorce negotiations. A Certified Divorce Financial Analyst (CDFA) can assist you and your divorce team in creating detailed budgets, reviewing assets and insurance, and most importantly, providing projected outcomes of various property divisions through analysis of tax consequences, cash flow, etc.
An increasingly popular approach to divorce is to participate in a Collaborative Divorce as opposed to the more traditional courtroom divorce setting.
What is a Collaborative Divorce?
Collaborative Divorce is a team approach to divorce. A team will consist of attorneys (one for each spouse) and various other professionals such as financial, mental-health, medical and child experts.
Taking a collaborative approach means that both you and your spouse agree to reach a settlement outside of court. If no settlement is reached and resulting in going to court, your retained professionals must remove themselves from the case and the parties must proceed to retain new professionals in order to remove the conflict of interest.
A Collaborative approach can reduce the time, stress, humiliation, and cost that comes with a divorce.
- Allows for an environment where both spouses are open and honest rather than creating an atmosphere where spouses fear what will be used against them and at what cost emotionally and financially.
- Removes or postpones the need to serve papers to your spouse. This step alone may reduce the anger, humiliation, and fear that the receiving spouse begins to harbor the moment they are served.
- Prevents hurtful, embarrassing information from becoming public record. In many divorces, the spouses feel threatened and fear what will result from the divorce. Many times, untrue or spiteful accusations are made. Regardless of the truth to an accusation, it can be included in discovery. Interrogatories and Request for Production (or discovery) are filed with the court and are generally public information. By working together, formal discovery filings with the court may be avoided.
- The discovery process involves both spouses providing information to the other. Many times a party may not feel it necessary or want to give up information, especially when it comes to assets such as investments or accounts. When this happens, the discovery process can be drawn out, investigators may need to be hired, depositions taken, among other actions there by lengthening the process and cost to each party.
- Reduces duplicate costs of each spouse retaining their own financial analyst, accountant, or other professional (non-attorney). By working with a neutral party, they can review, analyze, and report on the discovery and work directly with the spouses’ attorneys.
- Creates a learning environment for each spouse and enables them to work together to resolve problems. This can easily rollover to post-divorce issues and reduce future arguments.
Contact Allegiant to learn more about divorce planning or how the collaborative process works.Lauren Estes is NOT AN ATTORNEY AND DOES NOT PROVIDE LEGAL ADVICE. All information (s)he provides is financial in nature and should not be construed or relied upon as legal [or tax] advice. Individuals seeking legal [or tax] advice should solicit the counsel of competent legal [or tax] professionals knowledgeable about the divorce laws in their own geographical areas. Divorce financial planning is a fee-only process that does not involve investment advice or securities or insurance transactions.