Understanding assets, liabilities and cash flow helps to create a solid foundation for a good negotiation. When it comes to financial disclosures and information gathering in divorce, a neutral financial professional is often used in mediation and collaborative law because it can be beneficial for both parties.
What is a neutral financial professional in the context of a divorce? An NFP is usually a certified public accountant or certified financial planner who assists in a mediation or as a member of the Collaborative Divorce Team. This person may also be certified as a divorce financial analyst (CDFA) which means that he or she has additional training for the collaborative setting.
The NFP’s role is to work with the parties to set goals and ensure that the parties understand issues related to the marital finances and tax considerations. Because the NFP is a neutral party, trust can be built and each party can be confident that their needs are being met.
The processes of mediation and Collaborative divorce seek to create an environment centered on open communication rather than hostility. With this in mind, it is important that financial matters are met with understanding and cooperation. The NFP handles the gathering of financial information and works with the parties to discuss goals and objectives. The NFP is able to provide the parties with financial analysis and the implications of divorce on the finances. This specialized knowledge is important to have so that both parties come away with a thorough understanding of where their finances may stand.
There are numerous benefits to having a neutral financial professional on your collaborative team. Finances tend to be one of the most contentious issues between parties. However, using an NFP through the collaborative process is beneficial because it utilizes the same strategy of the overall collaborative process in order to foster a respectful and productive environment. The experienced NFP will be able to walk the couple through a series of possible scenarios and provide guidance on different courses of action. While parties may already have a solid understanding of the financial balance, the NFP can bring much added insight into the mix with his or her professional analysis.
Additionally, while the NFP is in a different role than a mental health professional or psychologist, his expertise allows him to reduce fears and tensions in a different way. Through providing information in an understandable way and providing future projections and budget needs, the NFP addresses some of the more delicate issues of divorce (i.e. money and spending) in a way which fosters understanding.
Very often one of the partners is not as financially savvy as the other. With agreement of the parties, the NFP can help the less savvy partner participate in the negotiation in a more meaningful way by helping him or her better understand the family finances. This usually helps take the pressure off of both parties. When both parties understand the finances the focus can moves towards viable options and creative solutions.