A “Kitchen Table” divorce congers up an image of a couple sitting down over a cup of coffee to divide what they have and what they owe in a manner that works for both parties going forward. They competently agree to the terms, split up, shake hands and move on with their lives without ever having to hire an expensive attorney.
Nice fantasy? Unfortunately couples who think they can negotiate on their own end up trying, fighting, failing, hiring attorneys, spending lots of money and increasing the anxiety of their split. Why? Because, for one, many couples don’t have the financial or legal knowledge to understand what they have or the cost and consequences of dividing it.
But not all is lost. A “Kitchen Table” divorce can work if the couple is willing to educate themselves. A kitchen table divorce can deliver on its promise – keep costs under the couple’s control.
Are you aware that there are less expensive, non-attorney professionals out there that work with couples to make more informed choices for their families? These professionals help couples to (1) agree on what accounts and debts exist today, (2) determine future spending plans and identify the potential source of funding (3) agree on how to parent together (4) negotiate the bones of an agreement and (5) document that agreement legally. At all stages it’s the couple that make informed decisions that fits their goals and interests – not the law.
My recipe for A “Kitchen Table” Divorce
- The Inventory: A Certified Divorce Financial Analyst (CDFA) helps couples write down a list of property, accounts and debt. The analyst can help find cash for the spouse who has a greater need for liquidity. He or she can also identify avoidable costs and potential tax consequences of division. The bonus: the expense of professional financial assistance may be offset by preserving value when possible and avoiding costly financial mistakes that can last a lifetime. Find our worksheet here.
- The Budget: Once the couple agrees on an “inventory” of property, accounts and debts, they work with their CDFA to create their own future spending plan. The couple then determines whether there is (or will be) sufficient income to satisfy those plans. In the case where one spouse doesn’t have enough income to cover the plan, the couple works with a financial analyst and mediator to determine how the gap may be filled – by support payments, withdrawals from liquid investments, the sale of investments or property or simply living on less. Find our worksheet here.
- The Options: The CDFA then provides options and recommendations for dividing the list and/or transferring support payments based on the couple’s goals and each spouses’ ability to pay or need.
- The Children: A Parenting Coordinator helps couples to create, in writing, a parenting plan that puts children first and matches each parent’s capabilities.
- The Agreement: A Mediator takes the ideas across the finish line. He or she works with the couple to get them to resolve any remaining disagreements and develop a final plan. An attorney may or may not be needed to document the plan.
What about the law? I believe that legal advice is important before attempting an agreement to be sure all bases are covered. State laws differ and may be ridged especially with regards to child support and care. State law may dictate some of what has to be accomplished. But most other legal advice is just advice, not a decision. Couples have a great degree of flexibility in deciding how resources are divided and even shared beyond the date of divorce. Ideally, spouses appropriately weigh legal advice against the needs of their family.
Couples should understand their legal rights in divorce but not hide behind them for the sake of “winning”. “Winning” means someone “loses”. If couples truly want to move on in a way that satisfies their mutual financial, emotional and parental goals, they may want to put their “rights” on a back burner in favor of meeting those goals. In other words, they may want to be more generous or understanding then they have to be by law.
That said, the best practice is to memorialize those decisions in the form of a legal agreement. Attorneys are there to help you do just that.
Divorce Planning of Austin can put you on a path to informed financial decisions in divorce. Contact email@example.com
Silicon Hills Wealth and Divorce Planning of Austin work with clients and their attorneys to help insure that financial accounts are divided in the most efficient manner possible. Please contact Pam Friedman, CFP®, CDFA™ at firstname.lastname@example.org
Neither Silicon Hills Wealth Management nor Divorce Planning of Austin offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance.
Investment advisory services offered through Silicon Hills Wealth Management, LLC, a registered investment advisor