In his April, 2016 column for Forbes, Avoid the Financial Pitfalls of Divorce, Certified Financial Planner Michael F. Kay notes that financial planning at the time of divorce may be “the key to safely navigating this life transition.” He also notes that good financial decision-making and emotions rarely mix well.
Divorce litigation does not generally provide the right environment for constructive planning. As Kay puts it:
Some couples (usually seething with anger and hurt), seek to hire the toughest and most aggressive “shark” attorney who will look to pound their adversary into pulp. The attorneys proceed to slug it out with letters, court orders and threats. Meanwhile their billing clocks are running and fees pile up astronomically faster than you might imagine possible. At the end of this lengthy and expensive process, their private lives are laid open to public scrutiny. While this might be the only recourse, it should probably not be your first.
On the other hand, Kay, points out that the Collaborative Divorce Process does create that environment. A Collaborative Divorce can help:
- Stabilize difficult situations through a temporary agreement.
- Make the exchange of all necessary information voluntarily.
- The parties agree on legal procedures to keep costs down and speed up the process.
- Negotiate the settlement that works for each party.
- Create a process for post-divorce decisions.
An interdisciplinary Collaborative Divorce is the most effective method to better make the legal, emotional and financial transitions incident to a divorce. A financial neutral is available to assist gathering the information which the couple has committed to provide cooperatively. The financial neutral can also provide budget analysis and planning, and long-term projections. The Family Specialist makes sure that the emotions don’t get in the way of of the decision-making process. The collaboratively-trained lawyers for each party will make sure that all the “i”s are dotted and “t”s crossed when the couple needs to reduce their plan to the necessary written agreement.
Transitioning through divorce is hard enough. The divorce process used to get through should make that transition, decision-making and future planning easier and better.
Filed in: Finances and the Financial Neutral, The Collaborative Team