When selecting a financial professional for a collaborative divorce team, most attorneys look for colleagues who are competent, able to communicate effectively, are good teachers, able to see the big picture, can solve complex financial problems, are ethical and trustworthy, attend to the goals and interests of the collaborative clients, and sensitive to the different financial sophistication of each client.
Professional Competence. As you know, dividing assets is a central part of any collaborative divorce, and the collaborative attorneys and clients need to know the financial professional understands how to value assets, characterize property under Texas law, develop settlement options to present to the collaborative team and clients, and explain the tax implications of various asset divisions. Financial professionals must understand financial analysis and interpersonal relations to deliver quality service to clients. Typically, financial professionals are CPAs or Divorce Financial Planners who understand personal finance, taxes, and Texas divorce law.
Good Communication Skills. Because finances can be complex and confusing to many couples and some team members, it’s essential that the financial professional formulate and deliver clear financial analyses to collaborative clients and team members in simple, understandable language. Having the ability to communicate with clients and team members who have different levels of financial understanding is essential to ensure the team functions effectively. The financial professional will find that some team members and clients have a deep understanding of money and others who don’t know how to balance a check book.
Effective Teacher. In addition to being a good communicator, collaborative attorneys want a financial professional who can present his analyses in an easy to understand format and teach clients the concepts and skills they need to understand their finances. Dealing with asset division can be an overwhelming experience for the client who has never handled family finances. The financial professional must be sensitive to the needs of his clients and the other team members, and make them comfortable, so they can ask questions when they don’t understand something, which will happen often.
Able to Resolve Financial Disputes. Couples getting a divorce are often unable to resolve their financial disputes because they don’t understand what they own, they are too emotionally invested in one asset, such as the family home or “his” pension plan, or they don’t understand how the IRS can help pay for their property division. Collaborative attorneys want the financial professional to help resolve these disputes by educating the clients about financial options. For example, if part of the asset settlement is structured as spousal support or contractual alimony, these payments are deductible by the payer from his income at a high tax rate while the recipient pays taxes on the spousal support or alimony at a much lower rate. This allows the spouse who is managing the children to enjoy a stable income while allowing the payer to enjoy a tax savings and the financial professional can correct the payments for the taxes paid by the receiving spouse and the time value of money since he or she is receiving the asset settlement over time.
Ethical and Trustworthy. Collaborative attorneys look for financial professionals who can maintain neutrality at all times and honestly communicate financial information to the team and clients. Being trustworthy is especially important in the financial professional because he or she is dealing with the couple’s financial security. By remaining neutral, showing professional competence, and offering balanced settlement options to the clients, a financial professional can facilitate settlement of the divorce dispute.
Attentive to Client’s Goals and Interests. It’s essential for the financial professional to understand the client’s goals and interests so he or she can develop options that meet their essential needs. This is best done by working in conjunction with the collaborative attorneys and mental health professionals to formulate settlement options that meet the client’s goals.
Sensitive to Client’s Financial Understanding. In addition to being competent, ethical, and a good communicator, the neutral financial professional must be sensitive to the varying levels of understanding found among collaborative clients and team members. Some clients and team members have extensive business and financial experience and are able to understand subtle aspects of asset division. On the other hand, some collaborative clients and team members don’t know how to balance a check book, don’t understand the first thing about finances, and are often too frightened to admit that they don’t understand what the financial professional is talking about. To overcome this difficulty, the effective financial professional must be empathetic enough to appreciate these deficiencies in understanding and help the collaborative client or team member learn about money so everyone is on a level playing field during settlement negotiations. This is one of the financial professional’s most important jobs and one that’s often missed.
Collaborative attorneys and clients want a financial professional who is competent and can help them develop good settlement options. In addition, the financial professional must be able to communicate with clients and team members who have differing levels of financial understanding, to help them understand the couple’s finances. An effective financial professional can solve complex financial puzzles, stay neutral, and develop settlements that meet the goals and interests of the clients. Finally, the financial professional must be sensitive to the varying levels of understanding of financial matters among collaborative clients and team members to be effective.