The role of the Financial Neutral in a collaborative case is invaluable to the parties and the attorneys. A major contributor to the team, the Financial Neutral does the heavy lifting in gathering all of the financial information for the martial estate. Generally, they’ll meet and confer with the parties off-line (without attorneys) to assess the assets and debts the team will be dealing with. Those discussions mature into the exchange of documents like tax returns, paystubs, bank statements, account statements and any other information that will allow the neutral to obtain a clear picture of the marital estate. This work is done only by the neutral at usually a much less hourly rate than the attorneys (who would each charge to perform the same tasks in a litigated case) saving the parties a substantial expense.
Once the marital estate is determined, the financial neutral typically prepares spreadsheets showing the team the assets, debts and income and expenses for the parties. Using this information, the team, at the direction of the neutral, can start determining whether valuations are needed, if there are tax issues with any assets or transfers, the comparisons of assets, like equity in the martial house versus the balance in a retirement account, and what child support or maintenance scenarios look like.
The Financial Neutral’s role is neutral, and he/she operates with the team and with the benefit of extensive collaborative training. Their experience is more than just that of the parties’ accountant or CPA because they are collaboratively trained, trained to deal with the information in the collaborative divorce process and are free of any apparent or hidden biases from prior relationships or expectations of future business that an existing financial advisor or accountant may have. Their role is not just gathering and processing information, but properly presenting it for meaningful reception by the team.
Whether a case is large and dealing with millions of dollars or the family is of modest means, the financial neutral offers valuable experience and assistance either way. While the larger cases may have more obvious needs like tax issues, complicated income structures, stock and/or options vesting decisions and transfers of ownership for many different types of property, a smaller marital estate has just as many needs for the neutral. Oftentimes, the smaller estates are more in need of the neutral’s expertise to deal with issues like budgets and how to divide income and expenses that were already stretched before the dissolution – dividing a pie that is already too small. The Financial Neutral’s training proves invaluable in either situation.
The role of the Financial Neutral is discussed in greater detail in the Pod Cast with Christiana Zouzious: https://collaborativeresolutionproject.com/2018/12/26/crp-5-the-financial-neutral-in-collaborative-divorce/