You’ve decided that the best route for you is the Collaborative Divorce process. Each of you has retained your attorneys and a mental health professional. What’s missing? A financial neutral! But what is that?
A financial neutral is an integral part of the Collaborative Team, usually a Certified Divorce Financial Analyst (CDFA) or CPA, who provides impartial financial expertise as part of the process. The financial neutral will gather all financial data and organize it in one clear picture so the team can understand which assets should be included in the marital estate, and which should be considered separate property.
A very important part of the process is understanding the future financial needs of each spouse post-divorce. The financial professional will work with each party to gain a firm understanding of their financial wants and needs and help them develop a realistic separate budget, which helps facilitate discussions surrounding spousal and child support, if applicable. In our practice, we place a heavy emphasis on this piece, ensuring all parties understand their future financial needs. We believe this is a critical and often overlooked step.
Once the current financial state is clear and future spending needs are identified, the financial professional will model different settlement scenarios and help the parties understand the short and long-term implication of their decisions. The financial neutral is there to educate, to help the parties and the other members of the team understand the financials in a way that is easy to understand, not provide legal advice!
Usually, one party is more financially astute and/or earns significantly more than the other spouse. The financial neutral ensures everyone is on a level playing field by taking away the stress from the spouse who typically handled the money in the relationship and ensuring the other party has all of the information required to negotiate fairly.
And remember, with a financial neutral on the team, each attorney does not have to duplicate the financial work. The neutral handles the financial analysis and provides support to both the legal team and the clients. Instead of two attorneys reviewing and analyzing every financial document, you have one specially trained professional, often at a lower cost doing the financial heavy lifting.
In essence, having a financial neutral on the team ensures all parties have the information and understanding of the financial picture, helping to promote productive discussions and work towards a resolution in a timely manner, saving everyone time and money!
About Me
Rachael Rennert, CDFA®
Rachael Rennert is a Certified Divorce Financial Analyst (CDFA®) with Family Wealth Planning Partners with offices in New York, New York and Monmouth County, New Jersey. She helps individuals and families navigate the financial complexities of divorce with clarity, insight, and a focus on their long-term financial well-being.
Rachael is mediation trained and has experience serving as a financial neutral in both collaborative and mediated divorce cases. She also works as a financial advocate, providing clients with personalized financial analysis and guidance as they make important decisions about their assets, income, retirement, and financial future. Whether working as a neutral or an advocate, Rachael brings a thoughtful, analytical, and compassionate approach to the divorce process.
Rachael is a member of the Institute of Divorce Financial Analysts (IDFA), the Association of Divorce Financial Planners (ADFP), the National Association of Divorce Professionals (NADP), and the New Jersey Association of Professional Mediators (NJAPM). She earned her MBA in Finance from the University of Colorado at Boulder Leeds School of Business and a BA from the University of Massachusetts at Amherst.