• Money & you Collaborative divorce
    By HEIDI CLUTE | March 05,2013
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    It may seem a bit ironic to use the words “collaborate” and “divorce” together, but it is an alternative approach to dissolving a marriage that’s worth a close look if you are facing this major life transition.

    Collaborative divorce is a legal approach to ending a marriage that seeks to avoid litigation while resolving conflicts through negotiations. Attorneys, mediators and other professionals such as financial planners may still be involved in the process, but everyone agrees to try to cooperate and negotiate (versus litigate) a settlement. If no agreement or settlement is reached, then parties are free to pursue the traditional divorce approach through litigation.

    According to www.collaborativedivorce.net, a collaborative divorce includes:

    ź A participation agreement which establishes some basic ground rules.

    ź Attorneys communicating and assisting both parties in non-adversarial negotiations.

    ź Greater emotional protection for the children from the marriage.

    ź Unbiased, neutral experts.

    ź An agreement that there will be no changes to child rearing, assets, insurance plans or other matters during the process without mutual consent.

    ź Attorneys, mediators and other involved professionals committed to managing the conflict, emotional and relationship issues creatively and sensitively.

    How does it differ from “typical” divorces?

    The biggest and most obvious difference between a collaborative and traditional divorce is the involvement of the court. Collaborative divorce excludes court involvement entirely. Another major difference is the full disclosure and agreement by and between the spouses that there will be no adversarial, nefarious or vindictive maneuvers during the negotiations.

    This honest approach often results in less emotional trauma to any children and more peaceful resolutions and compromises for both spouses, since fairness is an over-riding concern throughout the process. Professionals that are typically involved in divorces, such as lawyers, mediators, and financial consultants, receive special training in how to approach a collaborative divorce.


    There are many possible advantages to collaborative divorce, including:

    ź It can be faster and less expensive than an extended litigation.

    ź Parties often feel that they have been “heard,” since each spouse’s needs guide the negotiations and agreement. It is not a judge who decides, but the affected parties.

    ź The emotional toll, uncertainty, and anxiety levels are reduced for the entire family, since transparency and fairness are considered paramount and critical to the process.

    Trends in divorce

    The economic downturn facing Americans in the last few years has spawned a new population group, according to New York Times columnist Pamela Paul, and this new segment is called the un-divorced. “Society is full of whispered scenarios in which spouses live apart, in different homes or in the same mega-apartment in order to silence gossip, avoid ugly divorce battles and maintain the status quo, however uneasy . . . divorce lawyers and marriage therapists say that for most couples, the motivation to remain married is financial,” she said.

    So, the latest divorce trend is actually “all but” an actual split. Couples set aside their marital vows, but somehow manage to co-exist, if in name only. Collaborative divorce can be a real and viable option for those who have been living this way and are interested in finally moving on.

    How can financial planners help the process?

    Financial planners involved in collaborative divorces receive special training and a designation called Certified Divorce Financial Analyst (CDFA). Their role and responsibilities in a collaborative divorce include maintaining impartiality and completion of a thorough review of the family’s finances. The planner reviews and itemizes assets such as homes and cars; debts and loans including mortgage(s); insurance policies and coverage like health and life insurance; as well as the children’s and spouses’ financial needs going forward.

    The planner isn’t operating from a position of trying to “get the most” from one party for another during the collaborative divorce. His or her duty is to maximize the financial strength of the entire family, despite the impending separation and split of the spouses, for the long-term benefit of all.

    Heidi Clute, CFP® is the owner of Clute Wealth Management in South Burlington, VT and Plattsburgh, NY, an independent firm that provides strategic financial and investment planning for individuals and small businesses in the Champlain Valley region of New York and Vermont. Securities offered through LPL Financial, Member FINRA/SIPC. v
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