Understanding the Collaborative Divorce Process, Part 2: Navigating Asset and Property Division

Even if a couple agrees to part ways, divorce can be overwhelming. There are many issues that must be determined before a judge will sign the final divorce decree, including those involving finances and asset division. One of the ways spouses can reduce the emotional stress and financial burden of the division of property in divorce is by using the collaborative divorce process.

In Part 1 of this blog series, we discussed the collaborative process as an alternative to litigation in the courtroom — and how it works. In Part 2, we will cover how this form of alternative dispute resolution can be used to address financial matters and divide property.

Understanding the Role of a Financial Neutral in Collaborative Divorce

Division of property and assets are some of the most contentious — and complex — issues couples face in divorce. Dividing assets may have tax implications, and certain types of property might need to be appraised to ensure it is valued correctly. There may also be business interests at stake, real estate to divide, and property that must be traced. When spouses use the collaborative divorce process, financial experts can be brought in as part of the collaborative team to help ensure both parties receive a fair distribution of marital property.

Depending on the issues in the case, a variety of financial neutrals can play a critical role in helping spouses reach an equitable outcome. A collaborative team may include the following financial neutrals:

• Appraisers — An appraiser can provide a professional opinion concerning the value of a property. This is critical when it comes to determining how each asset should be divided.
• Financial advisor — A financial advisor can offer guidance regarding asset division during divorce and help the spouses create post-divorce budgets..
• Accountant — An accountant can explain the tax implications of property division and suggest ways to split assets that will reduce the tax consequences.
• Certified Divorce Financial Analyst (CDFA) — A CDFA has special training to help spouses navigate the complexities of addressing financial matters during divorce. They can assist with asset valuation, equitable distribution, and financial planning after the divorce has been finalized.

It’s important to understand that financial neutrals in a collaborative divorce work for both parties. They do not act as either spouse’s representative or take sides. They also cannot have worked for either party in the past. Ultimately, their role is to guide the parties in considering their options and reaching an agreement without controlling the outcome or rendering any decisions.

Key Considerations When Dividing Assets in Collaborative Divorce

There are many complex assets that can come into play in a divorce. Significantly, the key to successful division of property in a collaborative divorce is open communication between spouses. The goal is not to “win,” but to reach a satisfactory outcome for both spouses.

The collaborative process can help ensure that certain types of property with unique considerations are handled in a way the spouses deem fair. For example, spouses who own a business together can work with financial neutrals to determine its value and the best course of action to take . Similarly, if spouses own real estate together, a financial neutral can guide them to reach a decision concerning what they will do with the property. Through open and honest discussion, spouses can also reach an amicable resolution to the issue of the division of retirement accounts and pension plans that are considered marital property.

Notably, spouses often reach creative solutions with the help of financial neutrals for property division matters that would not otherwise be achieved in litigation.

How is Property Divided in Collaborative Divorce?

After all assets have been identified and valued, and tax implications have been considered, the spouses can negotiate a settlement. When the collaborative divorce process is used, the parties will work together and compromise to find a solution that meets their objectives. Each spouse should create a list of assets that they consider a priority to have a starting point for negotiations. Spouses might also consider trading assets — in these instances, the parties would negotiate a settlement where one party keeps assets that are important to them, while trading property that is of a similar value.

Other options spouses may consider when it comes to the division of property in a collaborative divorce can include selling or co-owning certain assets. If an asset cannot be physically divided and the parties agree, it may be possible to sell it and divide the proceeds between them. In other cases, such as those involving investment properties or vacation homes, spouses might agree that each party should retain a percentage of the asset.

Once the issue of property division has been settled, a formal agreement outlining the terms of the division of property (and all other matters that were determined during the collaborative process) must be signed by both parties and submitted to the judge. Once the judge signs this document, it becomes a binding order which both parties must follow.

Learn More About the Division of Property Using the Collaborative Divorce Process

The collaborative divorce process has many benefits, including confidentiality, cost-effectiveness, and efficiency. If you would like to learn more about using the collaborative divorce process and how it can be helpful to divide your marital property, a knowledgeable divorce attorney can discuss whether it is right for your specific case. At the Law Office of Shelly M. Ingram, our Fulton, Maryland divorce lawyers are dedicated to helping clients find tailored solutions for their specific situations.

Contact Us for a Consultation

Trained in collaborative divorce, mediation, and traditional divorce litigation strategies, at the Law Office of Shelly M. Ingram, we will help you reach an amicable resolution to your divorce matter. To schedule a confidential consultation with an experienced Maple Lawn divorce attorney, call us at (301) 658-7354 or contact us online.