Last month, an attorney/mediator found me by doing a search that led him to members of the Association of Divorce Financial Planners. In our first meeting, he admitted to me that he “wasn’t great with highly complex financial issues.” What he meant was: he didn’t consider himself efficient or proficient in analyzing complex settlements or their resulting tax liabilities in a spontaneous setting. He wanted me to act as a co-mediator in an upcoming session and left me with a huge stack of his clients’ financials. In a couple of hours, I put the case in context and met him at the mediation.
That’s one of the services I perform for attorneys and lawyer-mediators: I can come into a mediation as a financial neutral. The attorney will engage me—a Certified Divorce Financial Analyst (CDFA) and a trained mediator myself—usually because a couple has several disparate interests. Sometimes, I appear even if only one spouse doesn’t understand how those assets work. In this particular marriage, there were 7 or 8 big properties that were the husband’s “babies.” I was brought in to analyze cash flow and division of assets, not to conduct forensic work.
Since the attorney admitted that he hated “doing the financial part,” I was there to provide the insight and commentary on the proposals the couple came up with, knowing that one spouse had less knowledge of the situation. With my specialization in tax and advanced software that allows me to do calculations on the spot, I helped them look at potential post-divorce tax liabilities so they could come to an agreement of their own.
In California, you must provide accurate financial disclosure before you file for divorce. There are two sections to a financial disclosure: income & expenses and assets & liabilities.
In a litigated divorce, an attorney may suggest to work with me when their client is completely unaware of their own financial situation, or if they can’t organize or fill out their own paperwork. I can complete that task for them and help the attorney go forward with their case without the distraction of gathering financial info.
Sometimes an attorney will ask me to assist a client after a settlement is proposed. I may be asked to explain what the settlement means—meaning its practical implications. The attorney may understand the formal language, but our client really wants day-to-day answers:
- “Can I pay for my dog’s groomer, or am I washing the dog in the bathtub?”
- “Can my housekeeper come in once a week, or once a month?”
I can reframe a settlement in terms that a client will better understand. I can show them a way to create and live within a new budget that their settlement might require.
Attorneys and clients need realistic projections to make meaningful, workable settlements. For example, “If you keep the house, will your budget allow you to pay the mortgage plus your monthly expenses? Or, what if you sold the house now while your spouse is involved—would you be ahead by sharing the expense of sale?”
In a mediation, the attorney may feel that I can correct an imbalance of power. Perhaps it has to do with financial understanding or simply comes down to personalities. But I am always working on behalf of the couple and remain neutral.
When I am engaged just to work on behalf of one party, then I’m an advocate for that individual: I try to help the client understand their budget, organize their finances, and sometimes “make lemonade out of lemons.” I can even coach them on how to protect themselves in a mediation I am not involved in, as well as project optimum scenarios in order to get the best settlement for themselves.
These are just a few of the ways that I am brought in by a family law litigator or a divorce mediator. I encourage attorneys to ask me their financial questions. I can provide qualified litigation support, calculate and communicate the answers for your clients, and free up valuable time for you.