In order to achieve the most positive settlement possible for their collaborative divorce clients, attorneys often develop a relationship with an experienced financial professional who has the expertise to calculate the future consequences of a proposed settlement. The team of attorney and financial planner combines legal experience and knowledge with financial experience and expertise. This combination serves to provide the highest level of service to the client, adding analysis of future financial security to the job of marriage dissolution and a peaceful divorce settlement.
Ideally, the financial planner has completed the training for Collaborative Divorce offered by Chip Rose, thereby understanding the process and the planner’s role. The planner must be totally neutral, creating tables for both parties, estimating pension values and providing explanations where necessary. This process lends itself to creative problem-solving among the divorcing individuals and their attorneys. The planner must provide services with absolute integrity, thereby giving the attorneys and clients confidence in the financial analysis.
While the attorney is always the “captain” of the team, the planner provides the tools to clarify the financial situation. Many clients need an eye-opener regarding their future financial situation. For instance, when a woman expects to be “taken care of” for the rest of her life, without change in her lifestyle, the planner can illustrate the future cash flows for coming years. This reality check can assist the attorney in settlement negotiations.
The attorneys provide the guidelines for the planner’s work, outlining proposed settlement offers and providing the financial data. A skilled planner can provide numerous scenarios, as requested. Attorney training doesn’t include cash flow planning, qualified plan valuation, or executive stock option analysis, since they have neither the time nor inclination for these studies. The planner fills this gap with years of experience and knowledge. Through the creation of graphs, tables and explanation the planner can outline the future financial situation for each party, thereby making the attorneys’ job of negotiating a settlement much easier.
Additionally, when one of the divorcing parties is relatively naïve concerning financial matters, the planner can be valuable in explaining the long-range effects of a settlement through tables and graphs, as well as one-on-one consultation. Budgeting is discussed, when needed, along with other financial skills necessary for managing money on their own. This can be very reassuring and comforting to the person and can often avoid a stalemate in negotiations. They can see how their reasonable needs will be met and that the future will be secure financially with a friendly divorce.
What do you look for in a financial planning professional?
- Strong financial background in comprehensive financial planning
- Good communication skills, both listening and articulating
- Ability to create spreadsheets and other illustrations
- Some knowledge of divorce process in Texas
- Able to act as an unbiased neutral in order to smooth negotiations, clarify long-range consequences and educate the client, the financial planner plays an important role in collaborative divorce.
Close communications between the attorney and financial professional allow parties to arrive at an informed decision rather than one based on speculation.