Divorce Series Part 1: Choosing the Style that Fits You
In order to be the best Money Coach possible to my clients, a well-rounded understanding of all milestones you might face is crucial. I’m pleased to say I’m now a Certified Divorce Financial Analyst and I am going to share some of the basics to help you start on the right foot if you are wondering how to divorce.
Divorce is devastating. Despite the fact that only 5% of divorces are litigated (IDFA), emotions can run high. And the fear of living on less than the combined household income has its own set of challenges. Money decisions are emotional on a good day, but during a divorce emotions are on red alert. For example,
We are easily triggered when someone pushes our emotional buttons;
Sleep deprivation and emotional fatigue erode common sense;
We are tempted to act out anger, revenge, or seek comfort through spending money;
For some, there is significant pressure to learn our finances for the first time so we can make wise decisions when it comes to the division of assets.
The Different Types of Divorce
Divorce options reflect monetary, relationship, and time considerations.
Mediation:
A trained, independent 3rd party works with you as a couple to negotiate an amicable divorce. The mediator does not give advice (legal or non-legal). Each party retains your own legal counsel; however, you do not necessarily need to have your lawyers attend the mediation discussions. Agreements can be referred to lawyers for review and assessment at the end, which reduces legal costs. Mediators are typically therapists, attorneys, financial advisors or social workers.
Collaborative Divorce:
This is a team approach to divorce. Your family obtains professional help from experts in the legal, financial and mental health fields depending on your needs. Sometimes medical and child experts are involved. Each team member brings their expertise to the table and combines it with recommendations from the other members. The lawyers representing each party will have gone through special training. All parties are committed to find a “win-win” and cannot go to court or threaten to do so. This is a valuable alternative when one side needs advocacy – they may be mentally ill, or particularly unaware of financial matters.
Litigation:
This is typically the most antagonistic, expensive, drawn out means of divorce. Substantial assets may be consumed just in the divorce process alone. 5% of divorces are litigated.
Arbitration:
If as a couple you cannot negotiate terms acceptable to both sides you can choose to work with an arbiter. You and your spouse would each present your own argument without lawyers and the arbiter will have the final decision.
I’ve introduced the different types of divorce here, so stayed tuned next for my blog on how a Certified Divorce Financial Analyst can help you by reducing costs and dividing assets.
Your Personal Money Coach & CDFA©,
Carrie
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