In the first joint meeting with collaborative clients, it’s important to describe the journey that they are about to undertake with their collaborative team. We normally do this by reviewing and discussing the “Roadmap to Resolution” that we follow in the collaborative process. This “roadmap” is a classic problem-solving methodology where we attempt to identify the client’s goals and interests in this first meeting.
After this initial meeting, the clients are usually off and running, collecting financial documents for the neutral financial professional and starting to have off-line meetings with the neutral mental health professional regarding the parenting plan. The general agenda for the second full joint meeting, with everyone present, is what has become to be known as the “Walk around the Estate” meeting. This is where the neutral financial professional begins to review and educate the group regarding the client’s financial estate, based on the documentation provided by the clients.
As the collaborative team and clients come together for this second joint meeting, the financial professional needs to provide an introduction as to the purpose of the estate walk-around, what the team is specifically looking for, and why. Although critically important, the clients often find the first meeting to be a lot of paperwork and sometimes very difficult from an emotional standpoint, seeing their spouses in a real live “divorce meeting” for the first time. And although they may know their own attorney and may have already spoken with the neutral MHP, as one client shared with me, “There are now complete strangers involved in almost every aspect of our lives!”
Introducing the walk-around meeting is important for several reasons. First of all, clients are NEVER in the same position when it comes to financial knowledge, the understanding of their own estate, or their own viewpoint and relationship with money. Every client comes to this meeting with a certain level of anxiety for a whole host of reasons, not unlike the first meeting, but for different reasons. It is the team’s job to help alleviate this anxiety as much as possible. A solid introduction to the walk-around can help.
I have found over the years that providing an outline of what we are going to talk about, and what are we NOT going to talk about in the WAE meeting is helpful. Referencing the roadmap, I point out that we are in the data gathering portion of the process, and that we will NOT be looking at options to settle their estate, nor will they be making any binding agreements. It is a meeting where the neutral FP will present the assets and liabilities of the clients as a first pass towards full transparency and full understanding of the estate, BEFORE we move forward with the next step in the process. With this discussion, we are providing safety and hopefully an environment where both the clients and team can learn and ask relevant questions.
I then discuss the elements of the walk-around the estate meeting so that the clients can clearly understand what we will be discussing and why. These include three elements: Inventory, Valuation and Characterization.
- Inventory - In my introduction, I explain that we are going to review an estate spreadsheet that lists all of the assets and liabilities that I am aware of, noting legal ownerships from the information they have provided so far. I also explain that the spreadsheet format follows the general inventory categories that most family law attorneys in the state of Texas are familiar with. Included is a listing of all asset categories, so that we make sure we cover ALL possible items that a client may own, having them verbally communicate their existence or not, and whether further research is necessary. I usually tells them that from the documents provided, I know they don’t have a military pension or a timeshare, for example, but it’s on the spreadsheet until they confirm the non-existence. You would be surprised how many times such a discussion triggers a memory and a long-forgotten asset or liability.
- Valuation – Describing how we determine valuations is also important and how often we might need to update values is an often-asked question. I normally discuss the various types of assets, liabilities and accounts and how each one of them may have unique valuation issues. For example, a bank account is easy because the valuation is easily attainable, and the value is true and apparent on a daily basis. Not so with a small business, a piece of real estate, or a unique illiquid investment. I remind them that determining value is a fluid process and depending on the asset or liability, the determination of that value is a process of discussion, investigation and ultimate agreement between the clients. We also may need to bring in valuation specialists and other resources to provide needed data points and education for perspective and context.
- Characterization – The concept of community and separate property is a topic best left to the legal professionals in the meeting. However, it is important to point out to the clients that part of the walk-around the estate is meant to identify any possible separate property issues so that these issues can be discussed and understood before looking at options for settlement. The assumption by the financial professional should be that all property is considered community until by agreement they are identified otherwise.
Providing a detailed introduction to the “walk around the estate” meeting is a valuable service that the financial professional can provide to the clients and the team. Attorneys can also provide this information to their clients in advance, as regular and consistent communications among the professionals can support the collaborative process and create a safe environment for the clients.