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Why Working With a Financial Neutral Can Help Your Mediation

December 10, 2019  | 
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{4 minutes to read}  In other posts, I’ve often touted the benefits of working with a financial professional, either together or separately, during a couple’s divorce mediation. In this post, I want to summarize the circumstances under which I think a mediation would progress most easily, and that is if both spouses worked with a financial professional who acts as a neutral.

While the training and expertise of the financial professionals would be the same, a financial professional working as a neutral is different from a financial professional who only works with one party and only supports that person’s interests. The latter situation might arise because one party feels that the other has a superior knowledge or acumen for financial matters, and that the less knowledgeable party needs more education or help than the other. In such a case, the financial professional is an advocate for that party and definitely should not be considered a neutral, any more than either party’s attorney would be considered a neutral.

A financial neutral in mediation is more akin to the role of a financial neutral in the interdisciplinary collaborative practice model. They would work with both parties and ultimately present complicated financial concepts in a simple, easy-to-understand fashion.

Here are some other reasons why working with a financial neutral is a good idea:

1. They Are More Cost-Effective.
 
Although I do enjoy working on my clients’ budgets and using Family Law Software, it’s not always the most cost-effective way for clients to gather information and make a budget. If budgeting is not a comfortable process for either of you, a financial neutral can take your expenses, question you about them, organize them, and prepare an accurate budget at a cost typically lower than the mediator’s.
 
2. They Can Prepare Budgets More Thoroughly.
 
Since this is their area of expertise, a financial neutral will be much more proficient in gathering the financial data necessary, interpreting different scenarios, and ensuring that the budget precisely reflects your current expenses. In addition, they can accurately depict what will happen in different scenarios, such as a budget if your home is sold and you rent; a budget if you sell your home and buy a new one, etc. They can also explain the tax consequences of the different options so you can make more informed decisions.
 
3. They Demonstrate That Splitting the Difference Doesn’t Always Work.
 
Sometimes people think that if there is a budget deficit, they should just split the difference, but that can result in neither party meeting their budgets. Instead, a financial neutral may be able to suggest ways that you can satisfy debt, decrease costs or otherwise make it feasible for you both to live separately and pay your expenses.
 
4. They Can Help Determine Income.
 
If one of you is self-employed, the financial neutral can help you agree upon what income, based upon your actual financial reality, should be used for the purposes of budgeting and calculating support. If you are working with someone who is advocating for one party, it can be more difficult to arrive at an agreeable number, hence the advisability of using a financial neutral. 
 

If you determine that a financial neutral would be well worth the cost, your mediator can suggest professionals who can fulfill this role. 

Clare Piro Attorney and Mediator

Attorney & Mediator
500 Mamaroneck Avenue | Suite 320
Harrison, NY 10528
Tel: 914.946.0848

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