Based on my experience in Bryan/College Station and Houston, the least expensive divorce is done by striking an agreement between the two of you and taking it to an attorney to write up the necessary documents. If you are having trouble getting your spouse to agree on things or you want to be sure you are making smart decisions, try the ala carte menu method. Get an hour or two with divorce professionals who are not attorneys.

Divorce CPA – Connect with a divorce CPA for a short consultation. Lay out your financial situation and ask for suggestions on property division. Ask for tips how to do the actual division – the steps to change ownership of investments, retirement accounts, etc. You can get this done online or in person. CPAs charge less than attorneys and know more about the financial issues and details.

Divorce Parenting Coordinator – Find a Parenting Coordinator to consult with if you and your spouse cannot agree on how to share your children. Parenting Coordinators charge less than attorneys and have more experience in advising families in divorce.

If you want names of divorce CPAs or Parenting Coordinators, contact me. If you are in the Bryan/College Station or Houston area, I can direct you to local specialists and even an attorney who just writes up the documents but stays out of the courtroom.

I have worked with hundreds of people in Houston and College Station. Most of them want to estimate their expenses. All of them underestimate the number. And, even at that, all of them have been shocked at the amount of money they spend – in their estimates. The truth is that they spend much more than they estimate. I’d say they spend about 30% to 70% more than they estimate.

The problem with estimating too low is that you will wake up one day – maybe 7 months after the divorce – and wonder why you can’t afford to pay off your credit cards each month or sock away some savings.

To get a real picture of your spending you need to haul out 12 months of credit card and bank statements. Enter each and every credit card charge and check and debit and ATM transaction in Quicken or QuickBooks. Don’t double count your credit card charges by entering credit card payments shown on your bank statements after entering the credit card charges.

Tedious? You bet. Accurate? Totally.

There are strong financial reasons to choose the collaborative law process for your divorce. But, when put in perspective, your children are more important than those financial reasons.

I recently came across an Esquire magazine article by Chris Jones entitled The Things That Carried Him. http://www.esquire.com/print-this/things-that-carried-him.This feature story is about thirty-year-old Sergeant Joey Montgomery’s final trip home from Iraq. It is impossible not to be drawn into the journey and not to be touched by the sadness and pride that everyone in his small town felt for this hero.

Somewhere in the middle of the story, Chris Jones describes the recent history of how soldiers’ bodies are now brought home from war. They are treated with deep respect and caring by the men and women who participate in the journey. These men and women never knew these heroes.

Where does this intersect with divorce?

Chris tells one story of a military pilot who “flew a boy to Stockton, California, where the soldier’s parents, divorced, were fighting over the funeral arrangements, and neither showed up”.

I’ve advised on a lot of divorces. In the beginning of both the traditional litigated cases and in the collaborative law cases, the parents are wrapped up in their hurt and anger toward each other. As the cases go on, the litigated divorce parents continue to focus on themselves but the collaborative divorce parents begin to heal and move their attention back to a balanced life that embraces their children. Collaborative couples learn to stop being centered on each other with animosity and start effectively communicating.

This young man from Stockton had parents who never seemed to have looked up from themselves and their animosity towards each other. I guess they never learned to communicate effectively. Perhaps the collaborative law process had not yet arrived in their community. It is there now.

You never know what will happen to your children. If you are looking at a divorce, please choose the collaborative law process so that you won’t remain so self absorbed that you choose to fight with your ex-spouse rather than honor your hero child. Don’t choose to abandon your beloved child’s coffin on the tarmac.

I see a fair number of couples in which one spouse is financially illiterate. That spouse (the “non-monied spouse”) has not read the tax returns prior to signing them. He/she doesn’t have a complete grasp of the financial investments.

Often this spouse has anchored on some financial information that is no longer accurate. He/she remembers a certain high balance in the family investment account because the other spouse boasted about their wealth. However, that does not mean the wealth is still at that level when they get into the divorce. Distrust is magnified because the non-monied spouse thinks the monied spouse has spent or hidden the “missing” money. More likely the couple has spent the money or the investments have dropped in the market decline. In these cases, I am asked to review the past account statements to explain where the money went.

This unfortunate lack of financial knowledge carries problems after the divorce. This non-monied spouse is going to have to manage his/her own finances when suddenly single. When asked, I tutor these spouses in financial literacy. Every one of them has thanked me and lamented that they wished they had paid closer attention to the family finances over all those years. For their sake, I wish they had also.

Glossary moment:

Monied spouse = the spouse who controls the money, investments, income. He/she has the bank statements, credit card statements, investment statements. He/she established or was given control over the finances early in the marriage for whatever the reasons.

Non-monied spouse = the spouse who has not participated in the family finances. She/he has not seen the statements and has signed but not read the tax return. Typically this spouse has not asked questions.

Note: In any partnership, there is a division of duties. Marriage is a partnership. Early in the marriage, couples divide the duties. I am not judging this arrangement, but I wish more Americans were financially literate.

So long as the monied spouse is doing the right thing, this can work well for a very long time. But, if this couple finds themselves in divorce, it creates some interesting aspects to the divorce process.

In the beginning of the case, when I start to gather financial information, the monied spouse is laden with all the financial homework. During a divorce, everyone is living under stress at home and at work. Piling this homework on top causes more stress and is time consuming for the monied spouse. One such spouse called this homework phase his “other job”.

The longer it takes the monied spouse to gather all the required documents, the longer the divorce will drag on. When this spouse is particularly eager to get to the end of the marriage, the irony is that his/her own inaction can be the cause of the delay.

This is the flip side of having control of the family finances.

Of course, they could not agree on how to divide their property. They had a modest income, a modest house, very little cash, some credit card debt and a couple of retirement accounts. Had they worked collaboratively and with the assistance of a CPA who understands the nuances of divorce financial issues, they could have divided their property in a way that would have achieved both their goals.

This couple eventually ended up in front of a judge, having spent all their cash on their divorce attorneys and even further under credit card debt. The judge divided the property and debts in a manner that he, no doubt, felt was fair and equitable. Unfortunately, is was not financially wise nor was it creative.

This judge divided the property and debts in an overall 60/40 split, with the greater share going to the wife. The husband was granted the home and ordered to pay the wife for her share of the home … with cash and pretty darned quickly, too. His Honor did not inquire as to how the husband was going to get his hands on this $60,000 of cash. He did not inquire as to whether the husband will qualify for a refinance mortgage. Perhaps he did not care. Perhaps he was tired of settling marital disputes for angry, emotional couples who foolishly refuse to talk to one another.

If the husband cannot qualify for a refinance mortgage, he will retain the existing mortgage and the ex- wife’s name will remain on that mortgage obligation. She may be unable to buy a home for herself. Her credit will be tethered to that of her ex-husband as long as her name is still on that mortgage. What mortgage company will wish to give this woman (with a very modest income) a mortgage when she already has one? Furthermore, the husband will have to cash out a sizable portion of his retirement to pay off the wife, incurring unnecessary and avoidable income taxes and penalties.

To me, this is a sad story. This financial debacle was avoidable with collaborative efforts and the aid of a CPA with financial planning expertise, such as a PFS designation. Particular knowledge in divorce issues is a plus. If you are contemplating divorce or in the midst of divorce, stay out of the courtroom. If for no other reason, do it for your own financial security.

It is not unusual for me to see a couple who has been spending nearly 150% of their after-tax income. Where are they getting the funds to keep this up? They have high credit card debts on several credit cards. They have second mortgages. They have no emergency fund or savings of any size. They have neglected to save for retirement.

Of course, they can’t keep this going forever. And perhaps the realization of this fact is one of the catalysts for their spilt-up. As expected, one spouse says the other is the spender. But when I examine their spending history, it is apparent that both are very much involved in the shopping. The interesting point is that they each feel their spending is valid and necessary but perceive their spouse’s spending to be over the top. Further discussion usually reveals that these spouses were not communicating with each other about their spending and their financial goals.

Some people might think the overspending is the primary cause of the divorce. I wonder if perhaps it goes deeper than that. Perhaps their difference in values and their inability to fully communicate are more the reasons for the divorce and the financial situation is just the last straw.

Here’s an insider tip: We neutral professionals only like working with the best collaborative attorneys. Those are the attorneys we’ll tell you about. Our reputations are on the line. When a collaborative law case goes bad, it hurts us too.

We like to work with collaborative attorneys who repeatedly attend interdisciplinary collaborative training courses. How frequent? I’d say every third year. The training courses I’m talking about are two-day interdisciplinary training courses. The best training courses include role-playing among the three kinds of professionals — attorneys, financial professionals and mental health professionals (aka coaches). The not-so-good training courses are just lectures.

You should choose a collaborative attorney who attends both the role-playing interdisciplinary training courses repeatedly over the years. An attorney I often work with, Norma Trusch, created and teaches the Collaborative Law Institute of Texas interdisciplinary role-playing course. She is a collaborative law attorney who really knows her stuff.

I have attended three role-playing interdisciplinary training courses and one lecture-only training course over five years. I am also a substitute trainer for the Collaborative Law Institute of Texas interdisciplinary role-playing course.

Collaborative law is an area that does not require licensing or credentials. There is nothing to stop a professional from saying they are collaborative when they are not adequately trained in collaborative law. This means that you, the consumer, need to ask questions and get referrals.

Financial issues is one of the top two reasons couples divorce. (The other is lack of communication.) Differences in spending habits is one of the most common types of incompatible financial attitudes. And money is very difficult for many couples to talk about. So there is the double whammy of financial issues and lack of communication.

I have seen a lot of marriages tipped to divorce because of money and debt. Those couples who have chosen to divorce in the traditional litigated pattern have fared the worst. The costs of those divorces were substantially greater than the collaborative divorces of similar circumstances.

When it comes to divorcing a spendthrift spouse, the best divorce method is the collaborative law process. In this process, as the financial professional, I am usually asked to educate the spendthrift spouse about cash flow and budgeting. The couple gives me their bank statements and credit card statements for a period of time no less than three months. I pull together an accurate, detailed picture of their expenses. They are always surprised. Everyone thinks they spend less than they actually do. The spendthrift spouse and I work together to create a cash flow plan that works in their unique living situation. The spouse chooses where to cut back on spending. This is the crucial buy-in that assures the new budget commitment. It also reduces the chances that this spouse will boomerang back to the other spouse in future years to ask for more money.

Budgeting is one of the foundations of financial literacy. The AICPA (American Institute of Certified Public Accountants) and the TSCPA (Texas Society of CPAs) have been providing educational tools on financial literacy for years. You can read more about these at http://tiny.cc/sk2zz

What did I do? I used everyday plain words to explain the financial situation to both spouses. I pointed out the financial impact of some of the unresolved property items. I demonstrated what the true division would be once those items were more accurately factored into the equation. I brought some reality into a situation that is steeped with emotions and pain.

But don’t the attorneys do that? Not as well as a CPA can do it. Attorneys are really good with the law. Family law attorneys know something about everything. But as a CPA and PFS (Personal Financial Specialist), I have honed my skills to explain complex financial concepts in plain words. I can do that faster, easier, clearer and cheaper than can attorneys.

Would collaborative law been a good choice for these people? I usually put in a pitch for collaborative law as the better alternative for divorces. But in this situation, I don’t think collaborative law would have been an option. These two people separated years ago and now live thousands of miles apart. Collaborative law works when the couple can meet face to face throughout the process. To learn about the benefits of collaborative law, read my bog entry of March 20, 2010.

Don’t I have to subtract my fee from that $17,000? No. I already did that math. He saved $17,000 after paying me.

By avoiding the trial, they both have more money in their wallets than if they had not come to this agreement in the empty jury room. They didn’t have to pay their attorneys for the trial. They didn’t have to pay me to testify. And they didn’t have to roll the dice and gamble on the outcome of the trial.