Financial Professional’s Role in the Collaborative Process

Divorcing couples are often unaware of the financial implications of various settlement options.  The Neutral Financial Professional is a licensed Certified Financial Planner (CFP) or Certified Public Accountant (CPA)* who also has been certified as a Divorce Financial Analyst (CDFA) who helps the couple evaluate their financial situation, provides tax consequences of different division of assets and debts options, and develops creative solutions to complex financial problems.  As a neutral, the financial professional has greater credibility in providing information and fostering a dialogue than an advocate.  This makes it easier to reach mutually satisfying agreements.

* See IACP Collaborative Practitioner Minimum Standards – October 2018 for other noted licensed financial professionals. 

KEY AREAS TO CONSIDER:

  • Supporting two households on income that previously supported one
  • Sustainable budgeting
  • Workable property division
  • Tax issues, planning, liabilities, and funding
  • Business and pension valuations
  • Real estate values and issues
  • Recognizing that financial topics often involve very strong emotions

THE NEUTRAL FINANCIAL PROFESSIONAL HELPS PARTIES TO:

  • Gather information about the family finances
  • Get finances organized
  • Identify, clarify, and prioritize financial needs, goals, and concerns
  • Educate themselves about their financial situation
  • Validate emotions when they arise
  • Analyze income and expenses and assets and liabilities
  • Prepare legal declarations of disclosure
  • Prepare workable budgets
  • Address the financial arrangements necessary to support healthy children
  • Consult with additional neutral specialists when necessary
  • Evaluate possible settlement options with respect to short and long term consequences
  • Assess tax consequences for different scenarios
  • Make informed decisions on a level playing field
  • Generate creative solutions to financial problems
  • Communicate with the team and clients on financial matters

THE NEUTRAL FINANCIAL PROFESSIONAL:

  • Gathers all relevant financial documents
  • Identifies and prioritizes financial needs
  • Prepares detailed financial reports for all members of the Collaborative team which also serve as the clients’ legal declarations of disclosure
  • Educates one or both clients regarding the family’s financial position
  • Assists with developing a client’s budget
  • Raises awareness of need for other financial specialists
  • Facilitates discussion of settlement options and analysis including tax consequences
  • Prepares projections based on the different settlement options, if needed
  • Brings the voice of financial reality to the discussions
  • Reviews marital settlement agreement for accuracy as it relates to team financial discussions

Other kinds of financial professionals also serve in roles that benefit families.