Collaborative Divorce from the Neutral Perspective

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Imagine you receive an email from the forensic accountant you hired to assist in the divorce of Mary C. It included a string of emails between Mary and her husband Tom about the incredibly high American Express bill for the month of February.  This had followed two months of bills that were thousands higher than before the parties had decided to divorce. The forensic accountant agreed that the wife appeared to be spending about $5,000 a month more over the past three months than in the prior six months. In an email to his wife, Tom had told her she would now be limited to $10,000 a month instead of the outrageous $15,000 she was spending.

If you are a litigator, your first reaction would be to fire off an inflammatory letter to the opposing counsel demanding that no limit be set on the account, arguing that the husband must maintain the status quo, and if the response isn’t immediate, “I’ll see you in Court!”

But this is a Collaborative Divorce, and the email from the forensic accountant was sent to both attorneys and the mental health facilitator. It was a plea for help from one member of the team to the others in settling this problem. What happened didn’t matter. It was our job to determine how to help this couple solve the problem without significant costs and with both parties satisfied. We weren’t there to fan the flames; we are the team of firefighters. On our phone conference, it was the husband’s attorney who suggested a way to solve the real underlying issue. The wife did not want to be limited in what she could spend (there is plenty of income), and the husband just gets agitated when he sees the spending. So, money would be pre-distributed for discretionary use of each of the parties, and spending paid for with marital funds would remain at status quo levels that were agreed upon. A win-win solution.

The Collaborative Divorce Process is an alternative dispute method in which the spouses and the professionals pledge in writing to the open sharing of information and ideas and not to go to court. The Collaborative team focuses on problem-solving and finding respectful resolutions based on the needs of the family. It is a cost-effective method that avoids a long, difficult, and expensive court battle. The Process is a respectful, private, and often economical way to help families preserve relationships.

I went to lunch with both lawyers and the facilitator in that completed Collaborative Case. It was a very successful collaboration. It took five months and probably cost the parties about one-half to one-third the cost of litigation.

Both parties leave the marriage with a part of their relationship still intact. The husband is even going to assist his now ex-wife with investing her funds. Their children have been spared any heartache.

So, what was strange about this lunch? It involved the attorney for the husband and the attorney for the wife at the same lunch celebrating their victory! They had BOTH achieved their client’s goals!

Financial Mediation Provides Transparency To Marriage Dissolution

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Edward Sachs CPA/ABV CFF

The financial aspects of divorce pose an important obstacle to couples going through dissolution proceedings. Financial Mediation provides an opportunity to get the numbers on the table, identify areas of agreement and to zero in on potential areas of dispute outside of an adversarial setting.

Financial Mediation provides you with the two things you may need most to reach an agreement with your spouse regarding your divorce settlement.

Financial insight and understanding, not only of the issues you face now, but also the foreseeable issues you may face in the future because of what you agree to at this time, are critical. If you are negotiating the division of property and assets, all of which have value, it makes perfect sense that you understand all there is to know about those values. And likely future values. This settlement will shape the rest of your financial life.

Having a financial mediator, who understands the financial subject matter, and can illustrate the long and short-term outcomes of what is being considered, provides two benefits from one professional.
No advice is provided to either you or your spouse during a financial mediation. As a financial mediator, I will simply show both of you the impact, upon each of you, of the various possible settlement conditions you are considering. That is informed decision making.

Together we will work to achieve as much of each parties’ goals as possible. My objective is a win-win solution for both parties.

Don’t Let Your Case Get Hijacked

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By: Ed Sachs CPA/ABV CFF

Whether you are the Neutral Financial Professional (NFP) or any other member of the Collaborative Team, you must have a conceptual understanding of how the brain functions. That concept was made very clear to me a number of years ago by Dr. Lana Stern. The two major causes of stress, discord, and disagreement in a divorce revolve around children and financial issues. If a Neutral Financial Professional is able to assess the reactions and behaviors of the parties, then he or she should be able to help recognize and properly react to the potential for what Dr. Daniel Goleman coined as the Amygdala Hijack.

According to Dr. Goleman, the amygdala is the trigger point for the fight, flight, or freeze response. These circuits in the brain perceive a threat and flood the body with stress hormones that prepare us for an emergency. These hormones effect how the mind functions. A person’s attention fixates on the thing that is bothering, upsetting, frustrating, or angering them. That means they can’t pay attention to whatever it is they’re supposed to be doing.

Dr. Goleman states, “It is important to understand that the impulses that come to us when we’re under stress—particularly if we get hijacked by it—are likely to lead us astray.”

Understand the Two Sides of the Brain

To further understand the dynamics of the brain that are key to our work, the Neutral Financial Professional should understand the concepts of right brain/left brain. The right brain is the creative and emotional part of the brain; the left brain is the more analytical. Our role in the Collaborative Process is mostly left brain work, or analytical and focused. Our job is to educate the parties on all financial issues and facilitate the financial portion of the settlement.

We can use this knowledge of how our brain works to figure out that if one or both of the parties become sidetracked by emotional issues (right brain), the Neutral Financial Professional can redirect the parties to left brain thinking by focusing the discussion on a basic financial issue. For example, this is when I like to change everyone’s eye focus and present something on a whiteboard or in a schedule we are using.

Prepare for Extreme Reactions

When dealing with a party in the Collaborative Process, the Neutral Financial Professional must be prepared for extreme reactions when the party doesn’t understand your role, doesn’t understand why you are asking particular questions, or just doesn’t agree with what you are saying.

I have gone from “devil” to “saint” with one party in a matter of 48 hours. I have also had one of the parties go back to her Counsel after my first meeting with her and demand I be replaced. How dare I ask her if she has a full understanding of the parties’ joint tax returns before signing? This was after she had already raised questions of whether her husband reports everything. It is a perfect example of when the team cannot allow one party to hijack the case. A professional team meeting must address the situation, and the team must trust each other.

Provide Different Perspectives

High conflict clients need to be recognized for their contributions to the Process and acknowledged for positive behavior. Frame issues and proposals so that it appears to be more advantageous to them.  They probably need help in seeing the other side’s perspective. The Neutral Financial Professional is in the best position to provide different perspectives to the myriad of issues.

If you receive an extreme reaction to something you present, listen carefully, reassure the party that you understand their position, ask him or her to suggest some options with consequences, and consider reframing the issue and trying to determine what the party is trying to achieve. 

Establish Rapport

In order to be effective, the Neutral Financial Professional must establish rapport with the parties as early as possible. He or she must create an atmosphere of trust and neutrality. Continually remind the parties that you are there to help, to paint the financial picture, and to answer questions and explain anything and everything financial. Remember that one or both of the parties is most likely scared to death about their future. Calm their fears and doubts as best as possible. Be truthful and honest. Don’t paint a rosy picture when the parties are really floundering in the weeds.

Avoid Confrontation

Just as important, don’t be confrontational, and remember you aren’t the authority. You have expertise, but your opinion should always be couched by the premise that anything can happen in a Collaborative settlement. I have settled long-term marriages with no alimony and short-term marriages with long-term financial payouts. Don’t be too technical, rigid or inflexible. Remember we are educators, advisors, and facilitators. Don’t quote the law, and don’t indicate that something can’t be done, unless of course, it is illegal.  Again, I have been involved in many settlements in which parties agreed to things the law would never allow a Court to do.

Always Remain Neutral and Accessible

Do not appear to take sides. That may sound pretty basic, but while it is fairly easy to remain neutral, appearing neutral is extremely difficult. You will often find yourself delivering results of your work to one party that aligns with the other party’s positions.   

Finally, as a Neutral Financial Professional you must always be accessible to the parties. As an educator, you must simplify the complex issues and use non-technical financial terms to explain. Be friendly, clear, and concise. Use visual aids whenever possible.