The Role of Financial Neutral in Collaborative Practice

The process of dissolving a marriage and untangling two lives is fraught with emotions and expenses. People are generally familiar with the concept of going through the courts for a divorce, but many couples don’t realize there is a more affordable and less stressful way to end their marriage.?

In recent years, alternatives to courtroom divorce have gained popularity. Options such as divorce mediation and collaborative practice have made it possible for couples to separate with fewer bills from lawyers and walk away more satisfied.

Financial neutrals play an important role in collaborative practice. Read on to learn what a financial neutral is and how one can support your divorce proceedings.

What is Collaborative Practice?

Collaborative practice is an alternative dispute resolution model where a team of experts help parties remain “interest-focused” during their negotiations and provide guidance for the legal contract. This is best when both parties are still hoping to avoid litigation, but need additional support from attorneys, financial neutrals and mental health professionals to help finalize an agreement. In collaborative practice, each party hires a separate lawyer, but shares a financial neutral.

What does a Financial Neutral do?

A financial neutral is a member of a collaborative divorce team or a mediator who helps couples find, organize and understand their financial information and facilitates a process of educating, visioning and creating a plan for settlement. This expert is an impartial party that will examine the couple’s full financial status and ensure all parties understand the financial implications of the divorce.

Typically, the financial neutral gathers and studies detailed financial information from both parties. Using this information, they will then help clients uncouple their finances and figure out how to move from supporting one household to two. The financial neutral helps clients by providing a reality check of how their financial life will change through the process of separation.

In many relationships, one partner handles the finances. A financial neutral can help bring the other partner up to speed and educate them on their financial situation moving forward. This can include everything from financial coaching to developing specific budgets.

The Benefits of Using a Financial Neutral

There are a number of benefits to having a financial neutral as part of your collaborative team.

Reduced Costs

By using a financial neutral, parties can share the costs instead of separately hiring financial experts.

Clarity in your Financial Future

Financial neutrals not only help sort through today’s finances, but help clients create budgets and blueprints for their future financial life. There is also the opportunity to coach and educate clients on finances.

Compromise is the Goal

Lawyers in the collaborative process are solely focused on the best outcome for their individual client. A financial neutral can step in and advise lawyers on the financial impacts on both parties and come to an acceptable solution for all involved.?

Calms Emotional Decisions

For most couples, going through a divorce is a time of high stress and even higher emotions, much of which stems from financial concerns and worries. Having an unbiased party leading the financial decisions helps both spouses walk away satisfied with the outcome.

How to Select A Financial Neutral

The financial neutral will be a key member of the collaborative team working through a separation. It’s critical to find a professional who has experience in the financial and tax implications that come from decisions made in the divorce process.

Because this is an unbiased and impartial position, the financial neutral should be someone who has not previously worked with either spouse. Financial neutrals typically also agree not to work for either party in the future to keep any biases out of the decision-making process.

Sherry Jordan, CEO and founder of Jordan Financial Consulting and Coaching, has more than 20 years of experience in the areas of divorce mediation, business valuation, litigation support, financial forensics and business valuation.

Contact us today to learn more about our financial neutral services and how our team can support you during your divorce.