What Does a Financial Neutral Do in a Divorce?
Debt and disagreements over money and assets are major sources of contention in many divorces in the United States. An estimated 54% of Americans believe that debt is a solid reason to divorce, and 35% of Americans say that finances are the leading cause of stress in their marriages. If your marriage has come to an end, working with a financial neutral in addition to a divorce lawyer could help you set up a more secure and less stressful future.
What Is a Financial Neutral?
A financial neutral is an independent, third-party expert or professional who focuses on the financial aspects of a divorce. They do not represent either of the spouses and thus does not advocate for one party or the other. If there is future litigation, neither party can contract with the financial neutral for future representation. The financial neutral may be retained by the divorce lawyer or by the couple if they both agree to the collaborative process.
What Are the Qualifications of a Financial Neutral?
The qualifications for a financial neutral encompass a wide range of degrees, certifications, and experience. Some of the certifications held by financial neutrals include certified public accountant, business appraiser, certified fraud examiner, certified divorce financial analyst, or certified financial planner. Most financial neutrals participate in many hours of annual continuing education in order to maintain their license to practice accounting and to maintain their certifications. A financial neutral usually holds a bachelor’s or master’s degree in business, finance, accounting, or a related field of expertise.
Which Services Can a Financial Neutral Provide?
During a collaborative divorce, these professionals focus on the financial aspects of the divorce. Their role often begins with information gathering. They may gather information from both parties. The financial neutral usually asks for documentation of income, debt, retirement savings, taxes, bank accounts, investments, and other assets and liabilities. They do not duplicate the efforts of the divorce attorney. The financial neutral provides copies of information to both parties as requested by the attorneys. After reviewing what both parties provide, the financial neutral may identify missing documents and overlooked debts or assets and request them before the divorce process can proceed.
How Does a Financial Neutral Participate in a Collaborative Divorce Process?
A financial neutral meets with spouses on an individual basis as well as during joint sessions. The spouses’ respective family law attorneys are usually present during joint meetings in order to represent the best interests of their clients. If one spouse plans to request spousal or child support, the financial neutral participates by creating budgets for one or both parties. They may also perform cash flow analyses for each spouse in consideration of what their post-divorce financial futures will look like.
Who Would Benefit From Working With a Financial Neutral?
Any divorcing couple in disagreement over the distribution of assets would benefit from working with a financial neutral. Divorcing spouses who do not have any major areas of contention may also benefit from working with the financial neutral in order to have a more clear picture of their finances after the divorce. A spouse who earns significantly less than the other may wish to work with a financial neutral in order to make a support request that is likely to be agreed to out of court.
If you’re facing a complicated financial future, a consultation with our divorce lawyer gives you insight into structuring a fair settlement and helps you understand more about your financial future. To learn more information about the impact of a divorce on your finances and the role of a financial neutral in the divorce process, arrange a consultation with the Law Office of Joanne Kleiner in Jenkintown, Pennsylvania. Contact our office by phone at (215) 886-1266, or fill out and submit our online form to make an appointment.