Recently the Wall Street Journal ran an excellent article titled, “Splitting Up Nest Eggs.” The caption read: “Battles over retirement assets increasingly are the most contentious – and error filled – part of divorce.”
The article is a good read. It is an interview with a prominent Atlanta divorce attorney. The attorney gives illustrative examples of the biggest mistakes of splitting up retirement accounts.
But the most fascinating point is when the journalist describes how the division of retirement accounts is often negotiated at the end of a “many-hour mediation that’s grueling for everybody.” He explains that the emotional parenting issues are ironed out during the first hours of the mediation. Nine hours later, couples get around to dealing with the “less-explosive” retirement accounts. By then, everyone is tired and these issues tend to get rushed through, leaving out the details needed to implement the simple wording “divide retirement 50-50.”
This is fascinating to me because I have never experienced nor personally heard about a Collaborative case in which division of the retirement accounts was rushed through at the end of a long, draining day. In fact, I have never been on a Collaborative case that included long, tiring meetings on any topic. All the meetings I have experienced are short and effective.
In the Collaborative divorce process, couples get to make careful and well thought out decisions. Settlement ideas are considered and analyzed prior to team meetings, during team meetings and after team meetings. The Collaborative process avoids the marathon mediation situation when important decisions are made by exhausted people who just want to get it done so they can go home.
As the neutral financial professional, it is my job to make sure both spouses understand all the financial issues before they make decisions and commitments. Over the course of the process, I meet with both spouses to explain details and nuances. These spouses get to think about all this new information, ask questions and carefully consider their options. They can take as much time as they need to feel comfortable and confident about their decisions. Couples who choose the Collaborative process can consider their options to split up their nest eggs over a period of time that is measured in weeks, not in minutes.
Contributor: Tracy Stewart, https://www.tracystewartcpa.com/ financial professional in College Station.
