September 21, 2015

The Collaborative “Team”: The Role of the Financial Neutral

1The Financial Neutral often plays an invaluable role for the divorcing couple. Usually a Certified Financial Planner, and often also someone with the additional certification of Certified Divorce Financial Analyst, the Financial Neutral also has training specifically in the collaborative model.

The Financial Neutral begins working with the couple early in the process, typically after the first joint meeting. The first task will be for the couple to compile a list of a broad range of financial information, including account statements, mortgage information, values of assets, etc. The couple will also work on creating their budgets – one of the most important pieces of the financial puzzle – in order to look at “cash-flow” and creative options for moving from one household to two.

The couple usually meets with the Financial Neutral twice without their attorneys in the information gathering stage. They will review the documents and information provided, identify areas in which more information is needed, and the Financial Neutral will create what we call a balance sheet, as well as assist the parties with their budgets.

Utilizing a Financial Neutral is cost-effective – rather than paying both attorneys to gather and analyze financial information, they share the cost of just one Financial Neutral. Additionally, they are utilizing a specialist for their area of expertise. The Financial Neutral can help with things like maximizing the benefit of dependency exemptions, looking into the effect of taxes on spousal maintenance, advising the parties on social security, projecting future benefits on items such as a pension, and more. It is not only cost-effective, but added expertise that comprises an important piece of the puzzle.

After the initial two meetings with the parties and the Neutral, there are a number of 5-way meetings between the parties, their attorneys, and the Financial Neutral (6-way meetings if a Coach is being utilized). At these meetings, the team moves into the steps of generating and evaluating options for resolution. The couple’s goals are kept top of mind, with the team working together towards a settlement that meets as many of those goals as possible. Sometimes additional information will identified as needed at this stage. Usually there are anywhere from one to four team meetings at this stage, each time working towards settlement of the financial issues.

Once an agreement is reached, the financial neutral remains available as the attorneys are drafting the agreement, should questions arise, and is available to the parties as they are carrying out tasks such as dividing accounts, etc.

The financial neutral is an integral part of many collaborative cases, often saving the couple money in the long run by doing the work of two attorneys at once. Their expertise is usually well worth the cost.

 

Anna HagstromABOUT THE AUTHOR
Anna Hagstrom, Attorney and Mediator
Hagstrom Law & Mediation, PLLC

Anna is an attorney and mediator, and founder of Hagstrom Law & Mediation, whose mission is to create peaceful, collaborative resolutions by compassionately guiding people through major life events. She is experienced in alternatives to traditional litigation, and believes it is her role to empower her clients with knowledge and confidence to make educated decisions and move forward. Learn more at www.Hagstrom-Law.com

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