Although divorce lawyers are required to remain current with their knowledge in all areas involving family law, this doesn’t negate the value of accessing external insight from other professionals during a divorce mediation or collaborative law procedure. I often find that divorcing couples seem unsure of their rights regarding financial matters during a divorce, and may be unaware of the financial implications posed by different settlement options. Just as a child specialist can be effective in helping couples to navigate the complexities associated with child-centric cases, a financial neutral can be beneficial in providing guidance regarding financial concerns. Specifically, financial neutrals can be particularly helpful in answering the question of how both sides in a divorce can manage the transition from one household, to two households, in a way that maintains financial stability.
Unlike collaborative cases – which often involve a team of professionals, most mediation sessions involve a divorcing couple, and a mediator. However, this doesn’t mean that mediation, like collaborative law, cannot be supported by independent parties. In fact, mediating coupes are regularly advised to seek out review attorneys who can review their mediated agreement and help them understand their rights. In the same vein, there’s nothing preventing other professionals from joining the mediation for the best interests of both parties involved. After all, during a litigated case, other experts are frequently retained and court ordered. In collaborative cases, financial neutrals, and neutral divorce coaches usually make up vital parts of the team.
Usually, financial neutrals are hired by the couple together – rather than one spouse or the other, as they do not work to represent either client’s best interests, but instead work towards helping both clients at the same time. Many divorce mediators and divorce attorneys will actually offer lists of names for clients to choose from if asked about potential financial neutrals. Once a professional has been hired, the couple can either choose to meet with the financial neutral individually, or together, in order to go over their finances. Using a financial neutral can be an economical choice for couples, as these professionals generally charge a lower hourly rate than attorneys, and can have more training in financial matters. Also, they can work with the couple outside of the presence of the lawyer for each. Their role largely revolves around helping clients to make informed decisions on how to allocate their cash flow, liabilities, and assets.
Divorce is difficult on a couple for many reasons. Not only is the dissolution of a relationship an emotional issue to deal with, but it can also open up a lot of concerns about money that clients may have trouble managing alone. For example, if one partner within the relationship has long had control over the family finances, the other partner may not understand how to manage their own money effectively. A financial neutral in a collaborative divorce or mediation case works carefully alongside the divorcing couple and other team members in an effort to bring understanding and clarity to the finances the family are dealing with. The idea is to help both clients achieve a settlement that is mutually agreeable and fair. Financial neutrals are not present to state what the law is regarding maintenance, divorce, and equitable distribution – as these domains belong to the lawyers, however they can be helpful in providing useful guidance during a negotiation and settlement process.
In an attempt to answer a number of crucial questions about money, a financial neutral can offer a number of different forms of assistance. For example, an initial step in many divorce cases is for both the Wife, and Husband to fill out net worth statements, or financial disclosures. Once those have been completed, both sides will have a better understanding of their own financial situation, and the cash the other client has access too. Financial neutrals can be helpful in this, as well as in:
- Budgeting – A financial neutral can help both spouses to develop budgets that reflect their existing and potential expenses. For instance, a budget may take into account paying for house bills, and looking after dependent children.
- Education – Financial neutrals can also be useful in filling in gaps of knowledge for both clients, so that they can better understand important tax and financial issues such as child support, maintenance, property division, debt reduction, and retirement plan options.
- Coordination – Financial Neutrals can also help to point out the need for, and then work alongside other financial experts who may be needed during a collaborative or mediation case, such as a business evaluator, real-estate appraiser, pension specialist, or mortgage broker.
At the request of the parties involved in the mediation or collaborative case, a financial neutral can prepare financial reports for the team that helps to underline the information required, as well as a list of liabilities and assets, family expenses and income, and more. When financial resolutions have been attained, the reports and scenarios that a financial neutral helped to create during the collaboration or mediation process can become working documents for the attorneys to use in drafting a settlement agreement.
Just as with many other professionals that can be accessed during a divorce case, a financial neutral comes with many unique benefits and advantages. For instance, with a financial neutral present during a collaborative or mediation procedure, clients can begin to focus on both of their needs and hopefully come up with an idea of how to manage their future in a safe and secure way. This atmosphere can help to foster an area in which creative financial solutions can be generated, so as to avoid people digging in their heels, or finding themselves in deep water at the end of a divorce. With objective, fair, and neutral solutions, a financial neutral helps each party to address their needs, come up with viable solutions, and determine how each potential settlement may affect their future financials.
For more information about mediation, collaborative law, or the complexities involved in divorce procedures, please schedule your free initial appointment with Darren M. Shapiro. Mediating couples are invited to come together for their free consultation. You can access us by filling in our online form, or contacting us via phone at: 516-333-6555.