Five quick tips for working with your Financial Professional during your Family Law matter.
Most of our clients have, at least to some degree, an ongoing relationship with a financial professional that existed prior to separation.
For some people, that could be as limited as having a tax accountant do tax returns each year, while for others they have a close, day to day relationship with their accountants, financial planners and/or other professionals.
Whatever the relationship between you and your financial professionals, they can be an invaluable and integral part of a team assisting you through the legal and financial aspects of a separation.
The following five tips will help you get the most out of your financial professional when going through a separation.
- Make sure you know who they are acting for.
This sounds simple, but many times an accountant or financial planner who someone thinks of as “their” financial professional is actually engaged by their ex-partner and/or a company/trust/business operated by one or the other of them.
In those circumstances, their first obligation will generally be to the person/entity who has engaged them.
If that is the case, it is generally best to find a new professional, unless you can be completely comfortable that any information you provide them will be kept confidential and they are willing to take you on as a client in your own right.
- Understand what their expertise is (and what it is not).
Just like lawyers, financial professionals have their own individual skills, expertise, abilities and qualifications.
It may be that your financial professional is an expert at understanding complex tax issues, but cannot give financial planning advice about things like cashflow. In those circumstances there is little benefit in asking that person to prepare modelling based on a variety of different outcomes, but
they are likely to be very helpful in considering the tax implications of different ways of structuring the transfer of a business (or part thereof).
Talking to your financial professional about their expertise, then discussing that with your family lawyer, will ensure that everyone is on the same page when it comes to deciding who needs to do what.
- Engage them at the right time.
Different things are relevant at different stages of a family law matter and the effectiveness of the assistance from your financial professional will likewise change throughout your matter.
For example, at the very beginning of a family law property settlement matter, obtaining a lot of financial information quickly is very useful. The accountant for the family business is likely to have much of this information, at least for the business, and engaging or directing them to provide it to your lawyers and the other party can make what is sometimes a slow and involved process much quicker.
On the other hand, getting tax advice about potential business (re)structures before completing the disclosure process and obtaining valuations or getting an understanding of what the potential range of outcomes could be is potentially going to be money and/or time wasted.
Likewise, getting a financial planner to prepare modelling of what your financial future looks like after you have already negotiated a deal is unlikely to be of much assistance other than for the purposes of preparing a personal budget. If you had engaged them after you had received advice about potential outcomes but before negotiations, you could use that further information to guide you in negotiating an outcome that best suits your circumstances.
- Know when to bring in a third party expert (and why).
Whilst the financial professionals who are part of your day to day lives are experts in their own field, there are a few specific areas that we strongly recommend bringing in a third party expert for.
The most obvious of these is for the valuation of a business (or legal entity such as company or trust) for family law matters. There are a number of expert forensic accountants who specialize in this field and we would strongly recommend that one of them be engaged for this step.
These third parties have the benefit of being independent, so their conclusions generally carry more weight in negotiations and before the Court. It is generally a requirement that an agreed single expert valuer be appointed if parties cannot agree on the value of legal entities and/or a business.
- Be aware of limits to confidentiality.
It is important to know that there are limits to the confidentiality of the information you provide to your financial professionals.
Accountants, financial planners and other advisors can all potentially be subpoenaed to provide documents or give evidence in matters before the Court, so just be aware that information you provide them may be able to be obtained by your ex-partner.
There are also circumstances where you could be seen to have waived the legal professional privilege attaching to the instructions and advice given and received from your lawyers if you provide your financial professionals with advice you have received from your lawyers.
This is a complex area of law and can have serious consequences, so we always recommend getting specific advice from your lawyers before providing your financial professionals anything that your lawyer has provided you.
If you would like to talk to me or any of our team here at Feeney Family Law, please do not hesitate to contact.