In Divorce, Transparency Is Key for Both Parties to Succeed

These last few years, I’ve participated in many collaborative divorce cases as a financial neutral. As most know, when you are hired as a neutral on a case, your goal is to help both clients meet their needs in the divorce, so that the dissolution agreements are sustainable long after the final agreement has been signed.

When hired as a client advocate and not as part of a collaborative team, I am often told many things that are personal in nature, and should not be divulged in order to protect the client’s privacy. Some of these things include: undisclosed accounts, gifts to oneself, an upcoming trip, new loves, etc.  

Collaborative really stretches us as professionals to make a paradigm shift in how we approach our work. The more collaborative work I do, the more I realize how challenging it really is. What one may not need to divulge in a case as an advocate has to be carefully considered in a collaborative case: How do we approach the information? How do we address a sensitive topic? How do we divulge the new facts?

Let’s look at an example. In a case I am working now, the client’s employer just merged with another company, forming a much larger publicly traded company. My client, as a result, was awarded numerous stock options. After meeting with the attorney, we decided that if the other spouse did not ask for it, we were not going to mention it. We are filing the proper and complete financial affidavit, but we are not going to bring it up in settlement negotiations. We are leaving the burden on the other spouse to see our disclosure and ask for the funds.

In a collaborative case, this news and additional bonus would have been divulged in the joint session. It would have been discussed by the financial neutral, the dollars around it and how it affects the Equitable Distribution or Property Division agreements. Invariably, it would be a defined agenda item. It is not only about what one person wants, but more about what is best for both moving forward. As a professional, this takes what we call a paradigm shift in the way we approach a case.  

Collaborative changed me these last years.

As much as I would love to say I do 100% collaborative now, I still do not. My practice is growing every day to be more and more collaborative. However, I still do a lot of litigation and settlement support. I have cases now that are not collaborative, but my training in collaborative and mediation these last years has positively affected the way I do business. Cases in recent years, when things have been unknown, I have asked my client for permission to just call the other spouse. It has worked, and we have avoided costly court costs around discovery. We have been getting our information in a timely manner without going through the cost of multiple attorneys and paralegals. We are cutting out the middle man by being direct and open and communicative with the other professionals.

Divorce is a very traumatic experience for clients, and when they know they have someone that is trying really hard to do the right thing, everyone responds positively. After 8 years of collaborative, I see it seeping into every aspect of my work and personal life. I am still making paradigm shifts every day. I know that the collaborative work is hard, and the more I learn about it and the more experience I have with it, the more respect for it I have.

To learn more about collaborative divorce, please visit: https://www.collaborativepractice.com/

Jennifer Failla, CDFA™
Principal, Strada Wealth Management
Toll Free: 866.526.7098
Email: info@stradamanagement.com

The Post-Divorce Checklist

The Post-Divorce Checklist

Your divorce is final. What’s next? How do you move forward? How do you find the right path to follow?

Initiating the next steps can be daunting, overwhelming, and frightening, but the idea of starting fresh and new is worth the trek through the mud. Planning a new lifestyle can bring about feelings of excitement, inspiration and normalcy. With the support and guidance of a professional, transitioning to life after divorce can be simplified.

When dealing with a divorce decree, one of the things we focus on at Strada is creating a post-divorce checklist before the divorce is actually final. In the last stages of your divorce, there are many things you can do to help prepare yourself for the next phase.

The purpose of this blog is to shed some light on some of the things one might have to complete, per their decree. What we like to do is sit down with the client and the nearly final draft of the Marital Settlement Agreement (MSA) (or divorce decree) to determine the most pressing tasks. We then create a checklist using those tasks as our guide. You can do exactly the same thing at home.

As a companion to this article, please feel free to download and use this Post-Divorce Checklist PDF to keep track of all of the important tasks associated with life after divorce.

Your post-divorce tasks might fall into these major areas:

• Cash management - budgets, spending needs including potentially a home
• Tax organization
• Understanding your investments and redefining your portfolio to suit your needs
• Insurance analyses - health, auto, home - do they still work for you?
• Coordinating new estate plans - often pushed off but critical to address within 6 months of divorce finalization

Sit down and read your decree, divide your tasks into the above categories and tackle them one at a time.

For example: Cash management: change banks, open new accounts, close credit cards, analyze new expenses including groceries, and let things settle for 6 months before making big decisions; Taxes: determine who is filing, by when, what documents do you need to share, how will you archive. What can you do to prepare for your new tax status as Single or Head of Household?

There are many things that need to be completed after a divorce, but one of the most pressing concerns is “How and when will I get my money?” This could entail:

• Multiple transfers and title changes on accounts
• Transferring ownership of different investments
• Coordinating the paperwork around opening up new accounts and having funds transferred in

This is the time of year where we start the tax organization process with our clients. Post divorce, this can be even more confusing. With regard to income tax and obligations and returns, one person might be obligated to file and report to the other. There are so many executable action items that need to be considered pursuant to a divorce:

• Beneficiaries on insurance policies and/or individual retirement accounts
• Executing to qualified relation domestic orders
• Transferring IRAs
• Stock option executions
• Distribution requests
• Name changes
• Removing signors on accounts
• Transfer of titles on property
• Health insurance changes

Once through the administrative matters of the divorce, you can focus on your future, how you want to live and how you visualize your new life ahead.

Dealing with all these issues can be overwhelming, but a controlled, well-defined approach will help you complete each one in an accurate and efficient manner. If you have any questions about post-divorce tasks, please feel free to give us a call.

Jennifer Failla, CDFA™
Principal, Strada Wealth Management
Toll Free: 866.526.7098
Email: info@stradamanagement.com