Knowledge is Power in Financial Negotiations of Divorce

Knowledge is power  in the financial negotiations of divorce.

 

In most marriages one party will have taken responsibility for the management of the family finances. This is a natural by-product of economics. The fact is that one party will have a comparative advantage when it comes to managing finances either based on experience, education or efficiency. The party with the comparative advantage should take on the specific task in question in order to make best use of the family’s limited resources.

 

The unexpected consequence of this rational economic decision is that one party will find themselves on the outside looking in when divorce comes into the equation.

 

How you can take control of your divorce

 

One of the first and most important tasks Certified Divorce Financial Analysts undertake with clients is the gathering of information. When one party has all of the financial documents, information and knowledge the couple is not operating from a level playing field.

 

In amicable proceedings this is easily rectified by gathering the information through informal discovery and doing a little bit of education. In litigious cases, financial documentation and knowledge is often wielded as a weapon. The financially savvy party may make it difficult to gather documents and not be completely forthcoming with details. In this case it is necessary to pursue information through formal discovery which may include subpoenas, depositions, oral testimony and interrogatories. The formal discovery process can be the most significant cost in divorce proceedings when there is reason to believe a party has hidden or mis-appropriated assets and incomes.

The figure below details the value  of information in the negotiations of divorce financial settlements. As Financial Knowledge increases on the vertical axis, Power increases on the horizontal axis. It is extremely important to level the playing field with complete financial data gathering and expert guidance.