Collaborative divorce professionals everywhere can probably agree that a healthy divorce process, one that restructures families instead of destroying them, is not about “where you’ve been” but about “where you are headed.” Having said that, let’s also be honest; the big roadblock to completing a divorce is often one spouse’s fear, fear of exactly that, fear of where she’s headed. It’s fear of the unknown, fear of being left destitute, and, when you get right down to it, fear caused by lack of financial knowledge. We can call it “Financial Fear.” How do we address that panic in such a way as to move that spouse, who is frozen by that fear, forward in the process, beyond her fear?
If the neutral financial professional on your collaborative team is a certified public accountant, a CPA who is ill-equipped to discuss the clients’ financial futures, then that FP might have an obligation to refer those clients to a certified financial planner, a CFP. Most CPAs are not ready for this conversation and few, if any, have errors & omissions insurance sufficient to cover their tails on the advice that they might give, even if they were willing. They are trained to view the clients’ marital financial relationship from an historical perspective, in order to prepare the “standard of living” analyses, budgets, and business valuations that most people require if they are going to court.
However, if we are preparing this family for the future, then this collaborative team may need a team member who is prepared to advise on a “going forward basis.” This would be a financial neutral who is a CFP, instead of a CPA.
There’s a facilitator in Clearwater who is highly regarded in our collaborative community. I was invited to present a collaborative divorce program with her to a group of realtors and financial planners. As we were discussing our plans for the program, she related the following story to me:
I had a collaborative matter that was nearing settlement. We were in the full-team meeting at which I truly thought we were going to finalize the clients’ agreements. The children had been taken care of and the parenting plan was in place. The clients were already good with all that. And so were the kids.
But when it came down to the equitable distribution and the alimony, the wife was unable to accept the husband’s very generous offer. Everyone at the table, even her, I think, understood that his offer was above and beyond what was fair, and more than what, in fact, a judge might order, but the wife was simply unable to accept it. She was frozen, like a deer in the headlights, by her fear of being on her own, financially. By her fear of the unknown. And nothing our financial neutral, who was CPA, could say was sufficient to dispel that fear.
I was about to call an impasse, when I was struck by a bolt of lightning, an ‘epiphany,’ if you will. “Do you know Tom Jones,” I asked her, “that financial planner who works for all the high rollers in town?”
“He’s the one on the news all the time, right?” she pointed out. “They use him as their expert when they have a story they want a financial planner to talk about. Everyone knows him. He’s the best financial planner around. The DuPonts and the Rothschilds, too, they all use him.”
“Yes, that’s him. I know him,” I explained. “Why don’t we give him a call and see what he says about this settlement?”
“Okay,” the wife replied, doubtfully. “Are you sure you can get him on the phone? He’s really important and all.”
“Yes, I’m sure I can. He lives right down the street from me and our kids are friends. They’re in the same class in high school,” I went on. I looked around the table. “Let’s all take a break while Sheila and I make the call.” The two of us then retired to my office.
As luck would have it, Tom was in when I called and he picked up the phone, himself. I put him on speaker and introduced Sheila to him. Then I explained the circumstances and the reason for our call. After I asked him for the favor of a few moments of his time, and outlined the details of the proposed settlement, he addressed Sheila pointedly. “Have you put together a budget with your financial neutral?”
“Yes,” she responded, looking over at me, appreciatively, no doubt because I had warned her to bring it with her.
“And are you certain that it correctly reflects how you would like to live going forward?” he continued.
“Yes,” she affirmed, nodding her head even though he couldn’t see her.
“Then what’s your concern?” he asked her.
Her answer was immediate. “Will I be able to live on what my husband’s offered to give me?”
“Absolutely.” His reply was equally quick. “There’s no question about it,” he assured her.
I saw her face metamorphose, as it reflected her thoughts and the feelings that travelled with them. She was stunned, then amazed, then thrilled, then relieved. Finally, she said “I can’t thank you enough for your time,” and hung up the phone. She stared at me, but couldn’t find any words to say.
I smiled back at her and, after a long pause, asked “Are you ready to give Karl your answer?”
Wonderingly, she answered, “Yes, I believe I am.”
I suppose I could have worried that she was still going to say that she couldn’t accept his more-than-reasonable offer, but I did not. We walked back into my conference room, where, it seemed, no one had moved, and she didn’t even bother sitting down before she addressed the question hanging in the air. “I want to thank you all for your patience with me.” She turned to me. “Kim, thank you for realizing what I needed.” She turned to her husband. “And, Karl, I want to especially thank you for your generous settlement offer. Yes, I’ll accept it.”
Never overlook the value of a CFP in your collaborative process to keep the clients looking forward instead of back.
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About this week’s authors: Joryn Jenkins.
Joryn, attorney and Open Palm Founder, began her own firm here in Tampa after a 14-year career in law, 2 of which she served as professor in law at Stetson University. She is a recipient of the prestigious A. Sherman Christensen award, an honor bestowed upon those who have provided exceptional leadership to The American Inns of Court Movement. For more information on Joryn’s professional experience, take a look at her resume.