Divorce in the Red Zone

People considering hiring a divorce financial planner often ask me ' a divorce financial planner ' when the best time is to bring me into the process. My answer is, “The sooner the better,” especially in cases that could involve complex or contentious issues, a power or knowledge imbalance, a lack of trust or an inability to work cooperatively. Experience has taught me that the earlier the underlying financial data is carefully and thoroughly collected and analyzed, the more likely workable outcomes will evolve. The importance of putting a case into a conceptual and structured financial framework in which the various parties can quickly and easily engage cannot be overestimated.

(Although this article focuses on key stages in divorce litigation, it is also applicable to mediation, collaborative and cooperative divorce. Irrespective of process, a financially workable outcome is more likely when a thorough understanding of the marital finances precedes (but does not unnecessarily delay) negotiations and their accompanying and often irreversible outcomes.)

The 'Red Zone' Concept

To help clients conceptualize and better understand the importance and expectations associated with the various stages of the divorce process, I have begun to refer to these stages as “red zones.” This construct is easily communicated to the client, and each red zone becomes a clear and specific call to action. The client quickly understands the significance of these critical junctures, and often becomes more engaged in the issues associated with them. And viewing the divorce process in this way is also helpful to the attorney who ' because of pressures associated with managing a large caseload ' may tend to avoid working on a case until there is a sense of urgency associated with it. (Among other things, this method of working is likely to increase the level of stress inherent in an already stressful job.)

In football, the Red Zone is the section of the football field between the 20-yard line and the end zone. The close proximity of the teams to the end zone, the smaller the territory in which they are able to operate and the limited number of downs available to them to either score or prevent a touchdown require changes in play for which they must be thoroughly and adequately prepared. This area of the field has been termed the Red Zone because it is a critical place on the field in which games can be won or lost.

The better prepared a team is for Red Zone play, the more prepared it will likely be to implement successful strategies or adapt to unanticipated events. After a score, a hold or a turnover, the game continues, but it is nevertheless permanently affected by the outcome of the events that had just taken place. As in divorce, replays are not allowed and less time is left on the game clock once Red Zone play has run its course. Because of this, Red Zone play can have lasting psychological and strategic impacts on both teams that can often affect the remainder of play.

Timing Is Key

Divorce is an emotional process that will usually have significant financial consequences. Because of this, divorcing parties frequently walk a fine line between attempting to achieve viable financial outcomes and avoiding emotionally charged and troublesome financial futures. Although the divorce process will very often have unanticipated twists and turns, it will work best when structured in an orderly fashion. Bypassing specific stages, avoiding dealing directly with important issues, giving some stages inadequate attention or attempting to deal with them out of order or context can sometimes be problematic. As a result, this can often lead to financially unworkable or unanticipated consequences that are sometimes difficult, impossible or expensive to fix. Workable outcomes for issues involving children are often also more difficult to achieve in the context of financially problematic scenarios or in cases that are unduly prolonged.

To assist the process and keep it on track, judicial intervention is often necessary, and the courts have developed a timeline of stages, each with well-defined components and deadlines. Whether or not the court becomes directly involved, clients need to clearly understand and actively engage in each of its various stages. This will increase the likelihood of success. How each stage is managed and executed can greatly influence the outcome of a case.

My experience has shown me that the divorce should not be rushed through, nor unduly delayed. If too fast, the process can be amicable, yet give rise to poorly conceived and unworkable consequences. If too slow, it can become unnecessarily contentious, expensive and difficult to resolve. Furthermore, without the belief that progress is being made, the parties can easily become frustrated, discouraged, uncooperative, angry, impatient or fearful that the marital estate is being dissipated. In addition, the more drawn out the process, the more likely it is that unforeseen events will independently cause the settlement to derail.

Carl M. Palatnik, CFP', CDFA, a member of this newsletter's Board of Editors, is a Certified Financial Planner and Certified Divorce Financial Analyst. He is president of Divorce Analytics, Inc., a provider of divorce analytical services, with offices throughout Long Island and the New York metropolitan area, and founding president emeritus of the Association of Divorce Financial Planners, an international not-for-profit professional association. He can be reached at [email protected] or at 631-470-0331.

People considering hiring a divorce financial planner often ask me ' a divorce financial planner ' when the best time is to bring me into the process. My answer is, “The sooner the better,” especially in cases that could involve complex or contentious issues, a power or knowledge imbalance, a lack of trust or an inability to work cooperatively. Experience has taught me that the earlier the underlying financial data is carefully and thoroughly collected and analyzed, the more likely workable outcomes will evolve. The importance of putting a case into a conceptual and structured financial framework in which the various parties can quickly and easily engage cannot be overestimated.

(Although this article focuses on key stages in divorce litigation, it is also applicable to mediation, collaborative and cooperative divorce. Irrespective of process, a financially workable outcome is more likely when a thorough understanding of the marital finances precedes (but does not unnecessarily delay) negotiations and their accompanying and often irreversible outcomes.)

The 'Red Zone' Concept

To help clients conceptualize and better understand the importance and expectations associated with the various stages of the divorce process, I have begun to refer to these stages as “red zones.” This construct is easily communicated to the client, and each red zone becomes a clear and specific call to action. The client quickly understands the significance of these critical junctures, and often becomes more engaged in the issues associated with them. And viewing the divorce process in this way is also helpful to the attorney who ' because of pressures associated with managing a large caseload ' may tend to avoid working on a case until there is a sense of urgency associated with it. (Among other things, this method of working is likely to increase the level of stress inherent in an already stressful job.)

In football, the Red Zone is the section of the football field between the 20-yard line and the end zone. The close proximity of the teams to the end zone, the smaller the territory in which they are able to operate and the limited number of downs available to them to either score or prevent a touchdown require changes in play for which they must be thoroughly and adequately prepared. This area of the field has been termed the Red Zone because it is a critical place on the field in which games can be won or lost.

The better prepared a team is for Red Zone play, the more prepared it will likely be to implement successful strategies or adapt to unanticipated events. After a score, a hold or a turnover, the game continues, but it is nevertheless permanently affected by the outcome of the events that had just taken place. As in divorce, replays are not allowed and less time is left on the game clock once Red Zone play has run its course. Because of this, Red Zone play can have lasting psychological and strategic impacts on both teams that can often affect the remainder of play.

Timing Is Key

Divorce is an emotional process that will usually have significant financial consequences. Because of this, divorcing parties frequently walk a fine line between attempting to achieve viable financial outcomes and avoiding emotionally charged and troublesome financial futures. Although the divorce process will very often have unanticipated twists and turns, it will work best when structured in an orderly fashion. Bypassing specific stages, avoiding dealing directly with important issues, giving some stages inadequate attention or attempting to deal with them out of order or context can sometimes be problematic. As a result, this can often lead to financially unworkable or unanticipated consequences that are sometimes difficult, impossible or expensive to fix. Workable outcomes for issues involving children are often also more difficult to achieve in the context of financially problematic scenarios or in cases that are unduly prolonged.

To assist the process and keep it on track, judicial intervention is often necessary, and the courts have developed a timeline of stages, each with well-defined components and deadlines. Whether or not the court becomes directly involved, clients need to clearly understand and actively engage in each of its various stages. This will increase the likelihood of success. How each stage is managed and executed can greatly influence the outcome of a case.

My experience has shown me that the divorce should not be rushed through, nor unduly delayed. If too fast, the process can be amicable, yet give rise to poorly conceived and unworkable consequences. If too slow, it can become unnecessarily contentious, expensive and difficult to resolve. Furthermore, without the belief that progress is being made, the parties can easily become frustrated, discouraged, uncooperative, angry, impatient or fearful that the marital estate is being dissipated. In addition, the more drawn out the process, the more likely it is that unforeseen events will independently cause the settlement to derail.

Carl M. Palatnik, CFP', CDFA, a member of this newsletter's Board of Editors, is a Certified Financial Planner and Certified Divorce Financial Analyst. He is president of Divorce Analytics, Inc., a provider of divorce analytical services, with offices throughout Long Island and the New York metropolitan area, and founding president emeritus of the Association of Divorce Financial Planners, an international not-for-profit professional association. He can be reached at [email protected] or at 631-470-0331.