The Financials of Divorce

GOAL OF COLLABORATIVE PRACTICE:   

The goal of Collaborative Practice is to help separating and/or divorcing couples work successfully within a Collaborative Process toward achieving a positive resolution.  This positive resolution will hopefully minimize the negative economic, social, and emotional consequences the family experiences in the traditional adversarial separation and/or litigated divorce process.    

In order to accomplish the goal of a positive resolution, three independent disciplines work together as a team to integrate the Financial, Emotional, and Legal aspects of separation and divorce.      

TWO DISTINCT APPROACHES TO A COLLABORATIVE PRACTICE:   

The Mediator-Based Collaborative Practice, our work, allows the team to evolve on an as needed basis.  A qualified Mediator, trained and experienced in Divorce & Family Mediation, first meets with the separating or divorcing couple.  No charge is incurred for this initial meeting.    

During this initial meeting, the Mediator and the couple, working together, agree upon the approach that would best serve their unique situation:  Mediation or a Collaborative approach.  Both approaches are fully explained.  If the couple chooses Collaborative, your Mediator heads up and coordinates the team.  A Mediation & Confidentiality Agreement is presented for review and fees are openly discussed.  An agenda based upon the couple’s interests and concerns is developed to describe what needs to be discussed and in what order during future meetings.  If Collaborative, what other professionals should be engaged and when?  For instance, if the children are the couple’s greatest immediate concern, perhaps a Child Care Specialist should be engaged?  The couple’s choice; we can offer several referrals.  Many times the couple is already working with a Child Care Specialist; these professionals typically can be brought into the process.  Please keep in mind if the couple decides to engage a Child Care Specialist, or any consultant for that matter, they are responsible for interviewing, engaging, and paying the specialist.  Note:  We strongly recommend each spouse retain outside legal counsel to act as their advocate.  We offer recommendations to such attorneys familiar with the Mediation and Collaborative divorce processes. 

Work Product: What will you get from us when all is said and done?  The Separation Agreement has three primary components integrated into a single document, and might include some support documentation.  The first component describes the Terms & Conditions surrounding the separation or divorce:  Date of Separation, Child Support, Spousal Support and so forth.  The second, if children are involved, offers a Parenting Plan detailing visitation and custodial issues.  The third component includes the Property Settlement. This settlement is predicated upon the divorcing couple’s Statements of Income & Expenses, Budgets, and Assets & Liabilities.  An equitable distribution of property is proposed based upon formal or “best efforts” valuations of real as well as financial assets including pensions and so forth.  Computer generated scenarios are developed as needed. The Financial Consultant generates these Statements based upon information provided by the clients. Valuations are based upon sources we consider reliable but are not guaranteed.   

The Attorney-Based Collaborative Practice differs significantly in higher costs, structure & time invested, as well as the complexity of the process.

This video (courtesy of MogersTV) provides an understandable, perhaps somewhat simplified, overview of the Collaborative process:  

1. Two divorce attorneys trained in Collaborative Practice, one for each spouse
2. Two Divorce Coaches/Mental Health Professionals (Licensed Clinical Social Workers L.C.S.W., or Psychologists), one for each spouse
3. One CPA, CFP or CFA also called The Financial Specialist, trained in the Collaborative Process

If needed a Child Care Specialist is also engaged as a member of the team.  Team teleconferences are held as needed either prior to or post-team meetings.  Full-team meetings lasting well over an hour are common and held as needed, perhaps each month, although that schedule is quite flexible.  Keep in mind the divorcing couple might also be called to meet with these professionals outside formal team meetings.   The Financial Specialist on the other hand, does not necessarily attend each meeting.  Is there a need for a Financial Specialist to always attend a meeting on parenting visitation plans?   

As a consumer of these services, please be aware that in Maryland, from our experience, attorneys trained in Collaborative Practice each take a retainer of from $3,500-$7,500 and bill roughly from $350/hr.  The Mental Health Professionals charge in the $175/hr range.  Finally, generating the financial documents including Statements of Income & Expenses, Assets & Liabilities, and any optional Financial Scenarios can start at $1,500 and increase in cost as a function of complexity as well as the level of cooperation offered by the divorcing couple.  Collaborative team members should at the onset, each disclose their fees and billing policies in detail, prior to your signing any Collaborative Agreement.  Before signing an Attorney-Based Collaborative Agreement, please visit the following link to the  American Bar Association.   

Work Product is quite similar for either practice; variance will occur based upon the unique circumstances involving each separation and divorce.    

The following video is so to the point.  Reproduced here with the approval of James R. Coben, Professor of Law and Senior Fellow of the Dispute Resolution Institute at Hamline University School of Law in St. Paul MN. Copyright © 2006 Mediate.com.  Reproduced here with permission.   

THE ROLE OF THE FINANCIAL CONSULTANT AND THE FINANCIAL SPECIALIST:   

Barry M. Weissman, CDFA™, acts as both your Financial Consultant and Mediator in the Mediation-Based Collaborative Team.  The Financial Specialist works with the attorneys in the attorney-based process   

THE RESPONSIBILITIES OF THE CLIENT:   

Each party involved in the separation/divorce agrees:    

A.   In the case of the Parties with children, the Parties Agree:    

1. To make every effort to reach amicable solutions that promotes the children’s best interests
2. To not hesitate and act quickly to mediate and resolve differences relating to the children
3. To promote a caring, loving and involved relationship between the children and both parents
4. That inappropriate communication regarding their dissolution can be harmful to their children
5. That Settlement issues will not be discussed in the presence of their children
6. That any discussion or communication regarding Settlement issues will occur only if and when appropriate and done by mutual agreement and/or with the advice of the Child Advocate
7. Not to make any changes to the residence of the children without first obtaining the written agreement of the other party

B.   To maintain the confidentiality of all content, both written and oral, of the collaborative sessions , and further agrees that under no circumstances will any of this content be used in any future adversarial process    

C.   To work for the best interest of the family as a whole    

D.   That pending Settlement:    

1. Neither Party will dispose of any assets except by an agreement in writing
2. Neither Party may harass the other Party
3. All in force insurance protection will be maintained and continue in force without change in either type and amount of coverage, ownership, or beneficiary designation

CONFIDENTIALITY:    

All information provided the Financial Consultant and the Financial Specialist during Collaborative Sessions is treated as confidential.  No information obtained during Collaborative Sessions will be given to any outside person or organization without the concurrence of both Parties, unless there are allegations of child abuse.  TheFinancial Consultant and the Financial Specialist will inform both Parties at the next Collaborative Session of any contact outside the Collaborative Session with either of the Parties, their attorneys, or other involved professionals.    

1. Both Parties agree to sign confidentiality waivers with the Financial Consultant or the Financial Specialist
2. All material not specifically mentioned or assumed covered by the waivers are considered to be closed and confidential, as if the waiver applied

Confidentiality may be waived given the following situations:    

1. If there is reason to believe that one of the Parties is in danger of hurting oneself or others
2. If one of the Parties express an intent to hurt the other Party or others
3. There exists reasonable suspicion that a child, under the age or maturity, is being subject to abuse

Should either party elect to move from the Collaborative process to a formal courtroom, adversarial or litigious process, all materials, including all written and oral content of the Collaborative sessions remain confidential and may not be used in any court proceedings