Jerilyn Klein Bier writes “How Advisors Help HNW [High Net Worth] Clients ‘Collaborate’ On Divorce” in the current issue of Financial Advisor, a monthly publication for financial planners, registered investment advisors and independent broker-dealers, She begins with a quote from Danny DeVito, portraying a divorce attorney in The War of the Roses, “When a couple starts keeping score, there is no winning, it’s only degrees of losing.”
Wealth managers “are having more success getting clients to settle their affairs amicably through collaborative divorces that enable splitting spouses to retain more of their wealth for themselves, their kids and their charities. Retaining wealth is particularly important for couples divorcing later in life with significant assets because there’s less time to rebuild wealth and finances before retirement.”
Ms. Bier reports that mediation and Collaborative Divorce are better divorce forums than the courts, providing the family the opportunity for holistic planning and a variety of flexible financial solutions to maintain family wealth.
She tells of Kim Kenawell-Hoffecker, a Pennsylvania Certified Divorce Financial Analyst (CDFA), who works several ways on collaborative divorces. She serves as a financial neutral on collaborative divorce teams for couples who are not clients. Ms. Kenawell-Hoffecker also takes on divorcing or divorced clients to manage their wealth.
But never both. The rules of the Collaborative Process assure the couple that financial and mental health experts will be neutral, in part, by prohibiting the expert from taking on a spouse as a client following the divorce. The Process demands there be no incentive for a neutral expert to favor one side.
Conversely, financial advisors and therapists who represent one or both spouses can be confident referring their clients to the Collaborative Process, because the experts retained to be neutral during the divorce will not “steal” their clients after the divorce.
Ms. Kenawell-Hoffecker also reminds dueling spouses that with the hourly rates being charged for legal fees, that it is easy to quickly blow past the cost of the actual assets the couple is fighting over. Additionally, “the divorce is a tough enough decision to come to,” she says, “without adding salt to the wound.”
A Collaborative Divorce can avoid that, while expanding available solutions to maximize the goals of the couple.