Collaborative Divorce: How Hiring More Professionals Can Save You Money (Part 1: The Neutral Financial Professional)
When learning about the Collaborative Divorce option, a common and understandable concern of clients is the cost of hiring multiple professionals to help settle their divorce. However, if you consider how each professional contributes to the settlement process, you will find that the money you spend on a divorce can be done so very efficiently, and maybe even save you money in the long run. Here’s how hiring a Neutral Financial Professional (Neutral FP) on your Collaborative Divorce Team can save you money.
One service the Neutral FP provides is an obvious cost-saver – gathering all of your financial information. In virtually any divorce, whether litigation, mediation, or relatively amicable settlement discussions between lawyers, your entire financial estate is reduced to a two- or three-page spreadsheet. In the Collaborative Divorce process, it is the Neutral FP who pulls all of this information together, confirms the information, and creates the spreadsheet that you, your spouse, and each lawyer will use in the settlement discussions. That’s one professional doing all of the financial work at one hourly rate. In any other legal process, each lawyer or their hired experts do all of that work. That’s two people doing identical work at two hourly rates to create two spreadsheets that look virtually identical. And with Neutral FPs typically charging a lower hourly rate than attorneys, that Neutral FP’s work is typically more than 50% less that what the two attorneys would be charging for the same work.
It is very common in marriages to “divide and conquer” responsibilities. As a result, one spouse often manages all of the finances and the other has little understanding of their financial situation simply because he or she was managing other duties in the relationship. The Neutral FP can provide an invaluable service by helping to educate a spouse about the current financial situation or helping both spouses with future budget forecasting. How does this help to save money for the clients? It helps prepare clients to make informed decisions, eliminating emotion from money. Armed with knowledge, clients have the ability to make quicker, smarter decisions once the time arrives to actually settle the case. And a faster process more often means a less expensive process.
Developing Options for Settlement
Another service the Neutral FP can provide is helping the clients to develop different settlement options to evaluate. A traditional litigated or mediated case will have the clients focus on one settlement scenario that they “tinker” with throughout the settlement negotiations. In a Collaborative Divorce, the Neutral FP can help the clients prepare several different settlement scenarios to compare side-by-side and see which one is preferred by both. Again, how does this save the clients money? Similar to the comments above, the lawyers could do this work – two lawyers at two hourly rates. But the Neutral FP working at one hourly rate – and with a finance background – is certainly a cost savings using any math formula.
When it comes to financial education and the process of developing settlement options, there is also an added value that is almost impossible to quantify. When divorcing clients rush through a case to divorce as fast as possible with as little help as possible, they can end up with a case of “buyer’s remorse” and no way to go back and change it. Utilizing the services of a Neutral FP provides information that enables clients to make smart decisions based in fact, not emotion. The result is a financial settlement that allows each client to move forward with as much financial security as possible after dividing their community estate. It’s hard to put a price tag on security.
Look for Part 2 of this series on the Neutral Mental Health Professional.
Rhonda Cleaves is a Credentialed Collaborative Divorce Attorney in Plano, Texas. She represents divorce clients in Collin County, Dallas County, Denton County, and Tarrant County.