The emotional trauma of divorce is obvious. But the dissolution of a marriage also takes a financial toll that may be less apparent to those who have not been through the process before. In addition to dealing with the emotions that accompany divorce, you also must adjust your approach to economics.
Collaborative law can assist with this. It offers a nontraditional way to approach divorce, avoiding the courtroom in favor of agreements negotiated with the assistance of neutral third parties who specialize in areas such as mental health and finance. Using a financial neutral can help you navigate challenges that arise during a collaborative divorce.
Adjusting Expectations and Financial Goals During a Divorce
Let’s look at a typical financial situation we have seen people encounter. Just about every divorcing couple encounters this: changing a two-income household into a two, one-income households.
In most divorces, the couple’s overall income remains the same unless one person goes back to work, stops working or switches jobs. But that money has to go further than it did before. Instead of supporting one household with one mortgage or rent payment and utility bills, your combined income now needs to support two households, meaning two mortgages or rent payments and multiple utility bills. Whether you live comfortably now or you are struggling paycheck to paycheck, this is a significant adjustment.
Collaborative divorce can help you deal with this new reality. A financial neutral gathers information, such as looking over your tax and financial records, to help devise paths to financial success after your divorce. You do not have to use these plans if you don’t want to, but you do get informed advice taking your current debts, obligations, lifestyle and future goals into account.
Financial neutrals also educate couples. Some people are unaware of their financial options with divorce. A financial neutral can help you determine your most significant financial challenges and how to get through them. This may include paying out child support or prioritizing saving for a child’s higher education.
Benefits of Using Collaborative Divorce to Address Finances
The financial neutral looks out for your future. When you divorce, you still want to continue prioritizing the best interests of your family, not yourself. The financial neutral will get you organized and look out for that main priority.
Financial neutrals can also assist with another situation we have encountered — when one spouse lacks a good idea of their own financial picture, including assets, insurance and debts. They may not have handled the finances during the marriage, or they may lack an understanding of how certain financial issues work.
A financial neutral can gather and organize this information to give both parties a clear idea of where their finances stand. This assists in determining the divorce agreement and protecting your family. Both parties need a good understanding of what they owe, how to maintain good credit, and when their bills are due. It is in each party’s best interest in a divorce that the other party stays in good financial standing, which can impact each household’s ability to, say, pay for children’s expenses or stay current with bill payments.
Gain Better Control Over the Outcome of Your Divorce
Ultimately, whether you focus on financial or nonfinancial issues, you will maintain more control over what happens in your divorce when you use collaborative law. You have less control over courtroom activities. The amicable process of collaborative divorce focuses on cooperation and finding outcomes best for the family. It can also cost less and cause less stress than going to court.
Collaborative Professionals of Central Pennsylvania offers collaborative divorce services to help you navigate new financial situations. We invite you to contact one of the members in our Professional Directory today to schedule a free consultation.