Managing Financial Conflict in Divorce

[ssba] June 28, 2022 – Managing conflict is more important than resolution in divorce. We don’t resolve conflict at first; we handle it with a mix of vulnerability and wisdom with the goal of resolution. Furthermore, in divorce the resolution is not a compromise.  It can and should be a shared solution that is instead, at its very best, intentional. Divorcing couples may believe that the primary process for managing conflict, mediation, is for the mediator to provide an ‘answer’. “If I can persuade the mediator of my position, I’ll get what I want”.  This is not how it works. A mediator is not a judge. In fact, heading into mediation with these ideas is a mistake.  Better outcomes are developed by couples themselves with the help of financial and other professionals. Couples can and do get to better resolutions so long as they both can keep an “interests and solutions” mindset. Focus should be on needs and then wants.  Preparing for mediation by gathering financial documents, understanding the family’s financial picture, and offering a tentative plan for solution BEFORE mediation is critical for better and less costly outcomes. The Intentional Conversation Gathering financial records is the most difficult part of the plan. One spouse may be unwilling to let go of the relationship in order to stay in control of family assets. He or she is unwilling to share a complete picture of the family’s financial life. In this case, the divorce drags on and attorneys may be forced to use legal means to gather information and, cha-ching, the price of your divorce goes way up. The information will come out anyway. Be transparent. How does the process of mediation help or hinder resolution? Caucus, a mediation practice where couples are in separate room during mediation, may not be the right process for all couples. Being the same room may work better to generate ideas and appeal to a spouse’s sense of responsibility and gratitude for the financial aspects of their case. The 11 Rules of Engagement Consider the following to keep in mind while planning and negotiating to resolve your divorce without the high cost of high conflict.  
  1. Prepare. Be sure you know and understand your family’s financial picture – income, assets, liabilities, insurance – before you mediate. Have a plan for what the division may look like and how that plays out. A Certified Divorce Financial Analyst is trained to gather financial documents, present them in an understandable manner, and provide projections in divorce.
  2. Stay in the present and focus on the future. Reaching back to past hurt to make your soon-to-be- ex feel guilty or responsible for the present situation will backfire and could be costly.
  3. Stay interest based. Express your needs with phrases like “I’m interested in…” and be able to explain your reasoning clearly.
  4. Approach mediation with empathy and gratitude for your lives together before divorcing. I believe and have witnessed that this step alone can save you thousands in legal and other expenses.
  5. Avoid using absolutes like ”you always” or believe that absolutes even exist (like “ he’ll never let me have”). These phrases are limiting. They can feel like an attack and bring up shields. Neither is good for managing conflict or getting to a resolution.
  6. Try to separate facts from emotion. Emotions will help guide decisions, but they should not be the only factor. Get curious about the facts. What can you learn from them?
  7. Listen to your financial or other professionals. Can you challenge your own assumptions about the money in your relationship? Think before you leap. Your future self will thank you for this step.
  8. Try to persuade but be open to being persuaded. Otherwise, you are limiting your potential solutions set.
  9. Take a break.  When the information and decisions get overwhelming, take a time out.  Breathe deeply, get a glass of water and a sandwich.  Take a walk or do some stretching. You’ll need the fuel to keep moving forward.
  10. Stay in a state of curiosity. As solutions come to light, ask for your professionals to explain your options and the consequences of each option.
  11. Ask, what will it take?  If you believe you partner doesn’t trust your motives, ask “what will it take”.  You may be surprised by the answer. More money is not the only one.  If more money is what is being considered, ask why?  Do you understand?  You will need to build back some trust to move forward, especially if you will co-parent post-divorce. That may mean asking for or giving up more money or other valuable resources like time than you’d ideally like but it may be worth it to get to a resolution.
A Certified Divorce Financial Analyst® (CDFA®) will support you during this process by providing a picture of your family financial state. A CDFA® will sort through options to divide financial resources while avoiding financial mistakes that lead to unexpected tax expenses or penalties. A CDFA® will also help you understand how proposed division scenarios play out. These projections can help clients identify whether and how much they will need to earn or change how they spend to move forward in their life. During mediation CDFAs® can assist by offering financial options that expand opportunities for resolution and protect decisions from costly unintended consequences.