Saturday, July 28, 2007

Adding a Financial Professional in a Collaborative Divorce

While there are several different versions of Collaborative Law utilized around the country (and now, the world), in Texas we usually at least suggest, and often insist, on bringing a Financial Professional (FP) into the process either at the outset or very early. Understandably, the initial reaction of some people is that they can’t afford the cost of another professional. In reality, there is usually a cost savings as a result of the help provided by the FP. That savings is a result of several factors.

First, a qualified FP who is trained in Collaborative Practice can be invaluable in coordinating the gathering, organization and analysis of the financial facts in the case. Generally, the FP starts out with more knowledge of finances than either of the attorneys and can help the parties focus on the important information, help them locate the information and then put the information into a format that is easy for all to work with. That usually turns out to be a more efficient process than one where the attorneys gather and organize the information.

Second, having a single, neutral FP managing the financial information means that one professional, often charging less than either attorney, is carrying out a major part of the Collaborative process. There is no duplication of effort and the clients end up saving a lot of money. Additionally, one of the major roles of Financial Professionals is to analyze and explain the tax consequences of various courses of action. As a result, the parties can make sensible decisions where both can benefit and save money. Who doesn’t enjoy saving money?

Third, a good FP can not only save time and money – sometimes they save the process and make it possible to successfully complete the case. An FP provides a neutral voice with expertise. Occasionally, near the end of the process when the issues and options have been narrowed, it helps to have a neutral trusted advisor who can explain things to both parties. Sometimes, it is necessary to explain the same issue in different ways to each party so that each understands it. A well-trained FP can recognize that need and will have the Collaborative communication skills to be able to do so. Often a suggestion or question coming from an FP can have a much greater impact than if the same suggestion or question had come from one of the attorneys. The neutral Financial Professional may be in the best position to get the parties to reach an agreement on the final issues when negotiating is often the toughest.

It is important for the parties in a Collaborative Divorce to understand that bringing in a trained Financial Professional will pay off for them in many ways. They can save a lot of time by allowing the FP to efficiently manage the financial information. They can save money by allowing a single professional to handle a lot of the work that otherwise would be done by two expensive attorneys. Finally, they can avoid the cost of failing to reach a final agreement and having to hire new attorneys and go to litigation. Generally, a trained FP can help the parties understand the financial issues and see the benefits of reaching agreements on various issues. Adding a Financial Professional makes success more likely and less stressful for the parties.

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