Tag Archive: financial divorce specialists

1. Client Satisfaction and the Collaborative Law Experience

   June 25, 2012 3:12 pm Leave a Comment

   

   Jessie Lamont & Fareen Jamal

   By Fareen L. Jamal and Jessie Lamont

   Lawyers report the practise of family law litigation to be particularly toxic. The Collaborative Family Law Process creates a more desirable working environment for those lawyers inclined toward problem solving, as opposed to vitriolic litigation. But do clients have the same level of satisfaction with the collaborative process as experienced by collaborative lawyers?

   The International Academy of Collaborative Professionals (“IACP”) recently published their findings following extensive research [Linda Wray, “IACP Research Regarding Collaborative Practice (Basic Findings”), The Collaborative Review 12 (2012): 8]. Statistics reflect that the collaborative process is primarily employed by middle to upper middle class, educated divorcing spouses with children, most of whom use some form of the interdisciplinary approach (that is using financial, family or other professionals) in their seperation. Although the vast majority (86%) of these cases settle within approximately eight months through the collaborative process, there is a small percentage of cases that do not settle or are unsatisfied with the process.

   In terms of actual client satisfaction, approximately three-quarters of all collaborative clients polled in the IACP Professional Practice Survey reported being extremely or somewhat satisfied. Even more notably, the satisfaction clients felt for the process slightly outweighed their satisfaction with outcome.

   Clients indicated that they were satisfied with the manner in which their personal respect and respect for their viewpoint was maintained, the manner in which matters were clearly explained, their concerns and confusion addressed, the effectiveness with which their lawyers communicated, and the assistance they received with the development of their parenting plans and options for various issues.

   Collaborative Family Law creates and nurtures a “safe space” for clients who are frequently, at their most vulnerable, addressing a drastic change in their lifestyle, and experiencing intense emotions.

   Separation and divorce present a number of challenges and the success and satisfaction rates of any legal processes are important to consider.

   Seek out personal experiences of collaborative clients and lawyers before selecting the approach you wish to take. Self-examine what you truly seek from the process, and determine what your goals are. Collaborative Family Law may create an increased chance for desirable outcomes and, throughout the entire process, the greatest degree of client satisfaction.

   Fareen Jamal                                                 Jessie Lamont
   Bales Beall LLP                                              Bales Beal LLP
   2501-1 Adelaide Street East                       2501-1 Adelaide Street East
   Toronto, ON                                                   Toronto, ON
   M5C 2V9                                                        M5C 2V9

   Tel:  416-203-4538                                     Tel: 416-203-8591
   Fax:  416-203-8592                                    Fax: 416-203-8592
   fjamal@balesbeall.com                                jlamont@balesbeall.com

2. Finances go beyond Valuation Date

   April 10, 2012 2:02 pm Leave a Comment

   By Bronwen Bruch

   It seems so simple! Divide the property in half, use the guidelines to calculate spousal support, and use the tables to calculate the child support. How difficult could that be?

   Unfortunately it is like when you are told that all you have to do to lose weight is to “diet and exercise.” Again, the concept seems simple enough. But as many of us know, you quickly find out there are obstacles that get in the way of your success when you go at it alone.

   The same goes for separating couples and their finances. The good news is that they don’t have to go at it alone. In the last decade, a different kind of financial professional has come on to the divorce scene. They are Financial Divorce Specialists (FDS) or Certified Divorce Financial Analysts (CDFA). Applicants for either accreditation must already have a recognized professional designation in accounting or financial planning. Financial professionals that have an affinity to conflict resolution may also choose to be trained as mediators. And financial professionals that would like to be part of a Collaborative Law Practice Group are required to take the same courses on collaborative procedures that are required of the collaborative lawyers. However, what all of these financial professionals have in common is that they are all able to provide clients with a thorough evaluation of the financial ramifications of divorce settlement options. This is of benefit to the process because the client is being asked to make irrevocable financial decisions during an emotional roller coaster ride.

   That is why more and more lawyers, call on these financial professionals to assist their clients in arriving at a settlement. The lawyer may not feel comfortable giving out some types of financial advice. And it isn’t always cost effective; or they aren’t always able to take the time to analyze the future financial impact of alternate proposed settlements, or educate a client that has less financial knowledge.

   These financial professionals:

   1) Can work with the spouse that is less knowledgeable financially, so that they come into the negotiations on equal footing
   2) Organize financial data that comes in from both spouses and prepare various financial documents, and
   3) Prepare financial scenarios around future cash flows and net worth

   Financial issues in a divorce can be a challenge. This is exaggerated by the emotional turmoil the couple is experiencing. They say that for married couples, financial stress will magnify any bumps in the road ten-fold. So for separated couples, it follows that the financial stress, will be that much worse.

   When trying to put together the “dreaded” financial statements or budgets for your lawyer or looking at your spouse’s financials, it can trigger feelings of anger, mistrust, fear and inadequacy. This explains why a client may freeze in the middle of this process. The financials then go on the shelf until the client is ready to face those numbers or “emotional triggers” again.

   Individuals, couples, lawyers and family professionals that are interested in “collaboration” enlist these financial professionals. Their approach to a legal settlement includes the usual analysis of the “Valuation Date Needs.” However, there is an additional component which is the analyses of future financial needs. We know that financial stress is compounded by fears about your financial future. In a separation, there is the added resentment that the other spouse will be unduly better off. Adding this future component to the analysis can reduce these fears and resentments, which will help bring the settlement to resolution sooner, which in turn will save time and money for all involved.

   Bronwen Bruch, BMath, CMA, FDS
   Certified Management Accountant
   Financial Divorce Specialist
   Family Mediator

   The Tax Management Centre
   14-2530 Sixth Line, Oakville, ON L6H 6W5
   T: 905-257-6528 F: 905-257-4221

   bbruch@taxmanagementcentre.com
   www.taxmanagementcentre.com

3. Bringing on the Collaborative during a Litigious Divorce!

   March 5, 2012 3:22 pm Leave a Comment

   By Kathryn Jankowski

   Some judges ask collaboratively trained professionals to attempt to bring the ‘essence’ of the collaborative divorce to their litigious divorce clients in an effort to solve differences in a more peaceful manner and keep divorce proceedings out of court. One might think that these very same judges are attempting to put themselves out of business, however, there are enough divorce cases to keep them busy. A sad and sobering thought!

   It was because of the judges ‘call to action’ that prompted me to have a collaborative slant on a discussion I recently had with a client who was going through the worst of a high conflict, litigious case. Sometimes divorcees can get caught up in fighting for things that maybe they shouldn’t. Let’s look at this example, below.

   Husband, let’s call him Joe, will do anything to upset wife, let’s call her Jane. Joe knows Jane so well (they were married, right?) that he knows exactly what triggers her and he uses it. Jane has a pension plan from her place of employment and Joe has a right to be a joint beneficiary of that pension until he signs off on his interest in it. He is dangling this over Jane’s head in his effort to constantly thwart her in every effort to move forward.

   In my conversation with Jane I asked her why the value of that pension was so important to her. She told me that she wanted to help support her children if anything were to happen to her (she has two children, eight and ten). As her pension is a defined contribution pension she is very concerned that if something happened to her that her children would have those funds to help meet their needs, especially since they are still dependent. It seemed to me that Joe was using his spousal rights to the pension to empower himself in the divorce proceedings. By neither agreeing to sign the right to give up his interest or to negotiate a separation agreement Joe has Jane right where he wants her. (I won’t get into the fact that Joe does have a valid interest in the pension asset which needs to be negotiated.)

   Stepping back from the situation I reminded Jane that if her children did become the beneficiaries of her pension then the assets will become deregistered, at death, and included as income in her final tax return. Depending on what else was going on in the form of income, in that year, her asset will be diminished by her marginal tax rate. So then, if her pension was worth $100,000 her income would be $100,000 in her final tax filing (along with any additional taxable income). The kids would get the $100,000 and Jane’s estate (the residue that is also left to the kids) would pay the tax. So, in essence, the kids would be left with $56,590 (again, simple math and not taking anything else into consideration and using the highest marginal tax rate in Ontario). I asked Jane if she could afford to purchase a life insurance policy for $57,000, with her kids as beneficiaries so that if something did happen to her that she would protect the value of her pension to help meet the needs of her children? I also asked Jane if she was insurable. The insurance proceeds are non-taxable (as they were purchased with after-tax cash). I mean, if it was truly her goal to ensure her kids were OK this solution seemed like a win-win. Regardless of the asset in question, I suggested Jane do some number crunching to calculate the needs of her children going forward, if she wasn’t around, rather than just assuming the pension amount would suffice. Guardians would have to be paid and then, of course, there is the post-secondary education needs to consider as well. By purchasing an insurance policy she is taking away the empowerment of a high conflict ex-spouse. It no longer mattered what Joe did or didn’t do with regard to the pension issue. Jane’s concerns were addressed by another means and Joe no longer had pension power!

   She loved the idea.

   Sometimes it helps to not get hung up on particulars of each asset but rather what that asset truly means to you. In a litigious setting the power struggle seemed to be more of the issue than the value of the pension. Taking a collaborative approach and seeing another potential solution allowed Jane to move on with less resentment and still have her needs fulfilled. Hopefully, this post will reach someone who is contemplating divorce to consider the collaborative approach rather than getting hung up on the throngs of battle in a litigious setting by realizing needs can be met and voices can be heard in a less harmful manner.

   Kathryn Jankowski, B.A., CFP, FDS, FCSI
   Vice President, Financial Divorce Specialist
   T.E. Wealth
   kjankowski@tewealth.com
   416-640-8591