The Financial Neutral in a collaborative law case is typically a seasoned financial professional with CDFA™ (Certified Divorce Financial Advisor) and CFP® designations (Certified Financial Planner) and focused financial planning experience. In addition, he/she has achieved a high standard of collaborative law-specific training.
The Financial Neutral is an unbiased financial expert working on behalf of both spouses to provide a detailed analysis of the financial aspects of their marriage and to help determine the immediate, short and long-term financial impact of proposed divorce settlements. The collaborative setting allows for spouses to engage cooperatively about their financial questions and concerns and for the Financial Neutral to consider and financially evaluate unique solutions not as likely to be proffered in an adversarial divorce.
- Gathering and cataloguing comprehensive financial documents and identifying gaps in information and missing assets.
- Reviewing tax returns for missing data with regard to investments and businesses.
- Analyzing qualified and non-qualified retirement plans and valuing defined benefit pension plans.
- Reviewing whether bonuses should be treated as income or as an asset and analyzing equity compensation methods such as stock options and RSUs.
- Providing multiple spousal support/child support scenarios and estimating need for spousal support versus ability to pay.
- Reviewing a support offer for alimony recapture.
- Reviewing for child support reclassification.
- Developing a fluid budget including long term changes to circumstance.
- Calculating the short- term and long-term effects of dividing property by providing projections of settlement offers to measure whether the offer over time is equitable.
- Analyzing the tax effects of property division including capital gains on investments and real estate.
Financial matters are a large agent of stress for anyone and they become especially pronounced in the situation of divorce. Furthermore, these decisions today can have a huge impact throughout the rest of each spouse’s life. Consequently, the inclusion of a Financial Neutral is paramount to the success of the collaborative process.
The goal of the collaborative process is to settle divorce cases through this team approach, thereby avoiding the cost and stress of a court procedure. Should this not be possible and should a court process become the only remaining avenue, then the team would be disbanded.