If you’ve ever tried to split the bill after a shared dinner with friends, you know that finances are not a cut-and-dry subject. Everyone comes at them from a different direction informed by their own lived experience. Financial matters can become an even more fraught topic when you add in the emotional stress and pain of a divorce.
Money is often one of the biggest sticking points in a traditional divorce. But couples who opt for a collaborative divorce may have an easier time negotiating these critical issues by using a financial neutral.
What Is a Collaborative Divorce?
Collaborative divorce means using a process that avoids going to court to dissolve the marriage. The two parties rely on lawyers and other professionals to help them reach a mutually agreed-upon deal. The benefits include saving on court costs, keeping the process amicable, and communicating face-to-face rather than through attorneys.
What Is a Financial Neutral?
One of those “other professionals” involved in collaborative divorce is a financial neutral. This person possesses financial expertise and understands how divorce can impact taxes and other financial concerns. They can answer questions posed by either side about the implications of topics raised during the dispute resolution. As their title suggests, the financial neutral is a neutral party, so they have no interest in the outcome. They simply observe and provide advice.
To ensure the financial neutral truly lives up to their name, the couple should not choose anyone they have worked with in the past, such as a financial advisor. Even if both parties used this person, they may lack neutrality based on those interactions. Additionally, neither member of the couple can work with the financial neutral in the future.
How a Financial Neutral Can Aid With Collaborative Divorce.
Using a financial neutral has five main advantages.
1. Provides Unique Financial Insights
Having the right information helps with decision-making. Many people getting divorced ask their attorneys for financial and tax information. But a financial professional can draw on their personal experience to offer a better overview of the biggest financial concerns related to divorce. For instance, the financial neutral can provide guidance on tax concerns if a couple sells the house they bought together, including the impact of capital gains.
2. Puts Both Parties on the Same Page
When a professional works with both sides in a divorce, they ensure both people’s interests receive equal attention and concern. They work to achieve a balanced agreement.
3. Makes Divorce More Affordable
In traditional divorces, each party often hires separate financial advisors to assist them. But they only have to pay half the cost when both use the same financial neutral.
4. Streamlines Gathering of Financial Data
Divorce requires loads of paperwork, much of it related to finances. Having a financial neutral to wrangle the financial data eases the process for both parties. They can report on joint assets, individual debt and much more.
5. Create Financial Projections
Divorce is not just about the past. Both parties also need to look to the future, especially when children are involved, to ensure everyone stays protected. A financial neutral can weigh in on the long-term implications of proposed agreements and make easy-to-understand models covering child support, property division, retirement and other critical financial concerns, depending on the couple’s current chapter of life.
Reach Out Today to Learn More
Collaborative Professionals of Central Pennsylvania specializes in collaborative divorce. Are you interested in pursuing this approach, or would you like to learn more about the financial neutral? Schedule a free consultation with one of the members listed in our Professional Directory today.