A Team Approach Brings Creativity to Divorce Finances (with a case study)
No two families are the same — and no two families have the same financial situation. This is why any kind of one-size-fits-all approach to divorce is destined to have difficulties. For those who choose to negotiate a Separation Agreement with the assistance of a collaboratively trained family law team, they have the opportunity to think outside the box. Collaborative professionals are trained to look at all of the information and then help to find creative solutions that benefit the family long-term.
How does that look in real life? Here is an example of a client-focused approach to a very common child support issue.
Case study: Child Support with Salaries and Bonuses
Let’s talk about a separating couple named Sam and Susan. Sam is in sales and receives a salary, but also receives a bonus, which is paid twice a year in very inconsistent amounts. Susan works full time too and her salary is the same as Sam’s base salary.
Sam and Susan are sharing parenting time with their children, so both will have a child support obligation based on their incomes for the last calendar year. Understandably, Sam is concerned about his cash flow, as he received an unusually large bonus last year, which his company tells him is unlikely to happen this year. If child support is calculated with this larger bonus in mind, he may find himself in an unnecessarily difficult situation in the likely event that his bonus is much smaller this year.
While meeting the financial needs of their children is of the utmost importance, Susan and Sam’s collaborative team can take a step back, look at the whole picture, and make sure that they are setting this family up for success and trying to limit future conflict.
In this case, the professionals discuss how best to approach the issue in order to acknowledge both parties’ wish to ensure the children’s financial needs are met, their concerns about cash flow, and their willingness to make an agreement that is fair to both of them. The lawyers and parents agree to ask the financial neutral to run several calculations, using last year’s incomes and this year’s estimated incomes, as well as cash flow projections based on Susan and Sam’s incomes and budgets. The family neutral works with both parents to understand their interests and motivation, and to help rebuild trust in each other.
The lawyers review the scenarios with their respective clients before the team meeting to help prepare them for a discussion of the various possibilities. All of this preparation allows Sam and Susan to work out an informed, creative solution that takes into account their individual cash-flow and ensures the children have similar lifestyles in both homes.
When families are put first, it’s amazing what kinds of solutions present themselves! Both sides feel heard, the children receive what they need, and there’s no unnecessary financial strain added to an already difficult situation.
This article was written with contributions from Simonetta Lanzi and Eva Sachs.