Financial advisors are often the first to know that their clients are considering divorce. They are frequently called upon to get involved, whether by recommending attorneys or assisting once a divorce begins. Financial advisors and other financial professionals can be instrumental in helping their clients understand the options available to them before embarking on an expensive and public divorce battle.
One such option growing in popularity is collaborative divorce, which can be an effective approach for many different types of people. However, it can be particularly beneficial for high-net-worth families who value their privacy and their time.
Collaborative Divorce: The Basics
Collaborative divorce, also called collaborative law or collaborative practice, is an alternative process that allows couples to get divorced amicably and equitably without going to court.
Instead of engaging in an adversarial process through the court, with one party fighting against the other (plaintiff v. defendant), the parties in a collaborative divorce work together to reach a mutually beneficial resolution that meets their specific needs.
Just like in a traditional litigated divorce, each party in a collaborative divorce is represented by an attorney. Unlike traditional divorce, collaborative divorce uses a team approach. The "collaborative team" also includes a neutral facilitator, who is usually a mental health professional, to help manage the process, and a neutral financial professional who is usually an accountant and/or financial advisor. Additional professionals can be added to the team as needed to provide expertise on specific issues.
Prior to beginning the divorce process, the parties enter into a Participation Agreement in which they agree they will not go to court but will instead resolve their case by agreement. The collaborative team has a series of meetings with the goal of reaching the best resolution for the family, making sure all issues are addressed. The team helps facilitate productive communication between the parties to help them reach a mutually agreeable settlement.
If the parties are unable to reach a settlement, they need to retain new attorneys to start a litigated divorce.
Collaborative Divorce Helps Preserve Relationships
Divorce through the collaborative process enables the parties to have a civilized, respectful resolution of the issues that is solution-oriented and prioritizes their ability to maintain a productive working relationship post-divorce.
Instead of the win-lose court setting, the collaborative process enables the parties to work with each other, not against each other, toward mutually beneficial solutions. The goal is to enhance communication throughout the process and lay the foundation for a healthier relationship after the divorce. This allows the parties to more effectively co-parent their children and continue to be involved in their adult children's lives with less impact to the family, or even continue to work together in a family business.
