Recently, I was asked to analyze a complicated draft divorce judgment. From the worn appearance of the documents, question marks, revised numbers and multitude of angry, red, crossed-out words, it was clear that a lot of discussion had taken place. Usually, this level of discussion in a team mediation model translates to a lot of time, money and emotion.
That day, I left the office humming “Wasted Days and Wasted Nights” – a song made popular by the late Freddy Fender in the mid-seventies. It was a strange song to have stuck in my head. But, I couldn’t help thinking of all the hours wasted: My new client didn’t fully understand the ramifications of her draft judgement.
The proposed settlement had been presented to me by my client along with a page of additional questions. It had been drafted by a lawyer, a therapist and a neutral financial professional (who were all trained mediators). Unfortunately, the couple had arrived at solutions which simply do not and cannot work financially.
My client wanted to know:
- How do I get my husband’s name off the deed to the house and the bank loan?
- Do I have to refinance?
- How can I refinance if I don’t have a job?
- Should I accept a settlement from a taxable retirement rather than monthly support?
All these questions and more should have been presented to a Certified Divorce Financial Analyst™ (CDFA™), particularly someone with specific training in taxation. In this case, the wife had been hypothetically awarded the house with the stipulation that she remove her husband from the loan within a year. But, she doesn’t work!
If a CDFA™ had been brought into the process, all could have avoided a lot of time and trouble. I would have looked at everything strategically in order to create a comprehensive plan including discarding all the concepts that were not financially feasible. I wish they had come to me first.
For mediation (or any financial negotiation) to be successful, it is important for the parties involved to know the goals. You have to be prepared with the facts. Mediators (as third-party neutrals) aren’t there to advise you; they can only facilitate the strategy you have in mind. CDFAs™ prepare you with the facts.
How feasible is your divorce strategy?