Collaborative Divorce – A Problem-Solving Approach

January 10th, 2011

Most people are unaware of any alternative to the time-consuming, expensive, and often exasperating process of divorce litigation. Even when well-intentioned lawyers are guiding the couple through the procedural underbrush, people get frustrated, and unhappiness is often unavoidable.
Collaborative divorce is the result of the efforts of lawyers, mental health practitioners, financial professionals, and others who recognized the shortcomings of the traditional legal process for many families facing divorce and who wanted to work cooperatively to solve thorny divorce-related problems.
Collaborative divorce is a process that allows divorcing parties to focus all of their efforts and resources on settlement of their divorces, rather than on preparing for trial. Since the great majority of divorce cases are settled and not tried before a judge, many couples, as well as lawyers, would far prefer to proceed cooperatively, sharing relevant information, and negotiating in a collaborative spirit.
In a collaborative divorce, lawyers, mental health professionals, and the divorcing couple enter into a participation agreement, setting out the framework for a collaborative case. The agreement requires voluntary disclosure of financial information, a commitment to fair dealing, and a requirement that if the process fails to yield a settlement, both lawyers will withdraw from representation of the parties, and will not participate in any litigation.
One of the great advantages of a collaborative divorce is the ability to make use of mental health professionals (counselors, psychologists) to help the couple better understand the issues that make it difficult for them to talk with one another. Particularly when they have children, husbands and wives will still need to deal with each other when the divorce is over and the mental health professionals can help them learn to do this more effectively. The mental health professionals can also provide very helpful information on how to raise children in two households.
Another important feature of the collaborative process is that it allows the husband and wife to participate directly in the decision-making process, rather than turning everything over to a judge to decide. Anyone who has raised kids knows that when people are involved in making the decisions, they are more likely to understand them and to follow through on them.
Collaborative divorce is a smart way to deal with a divorce as a problem to be solved, not a battle to be waged.

Ten Financial Mistakes Women Make In A Divorce

April 6th, 2010

1. “My husband had an affair and I want him to pay.”

Don’t waste your time or money expecting to receive revenge.  It is important to hire an attorney who will act as your “agent of reality” and will tell you what the court is likely to do in your particular situation.  You then need to evaluate whether the result you hope to obtain will justify the additional expense of the revenge you are seeking.   Will the result be any better?  Will you obtain a reasonable return on your investment?  The courts are generally not interested in helping either spouse fulfill their revenge fantasies.  There is almost always another side of the story about why a spouse chooses to stray.  While having an affair is a moral issue for most people and therefore causes a lot of emotional trauma, there are other types of misconduct that the court considers.  Trials to prove that he was unfaithful generally don’t yield the results that you want.  You need to ask yourself whether you want to spend your money on your children’s college tuition or that or your attorneys’ children.  AT THE END OF THE DAY, YOUR DIVORCE IS A BUSINESS TRANSACTION.  Do yourself a favor and act in the best interests of your “business,” which is your family and children.

2. “He wanted the divorce, so I should get to keep the house.”

Oftentimes women are steadfast about wanting to stay in the family home.  There are a variety of good reasons for wanting to do this:  the children will be unhappy and the home will provide some stability.  After all they have just been through a divorce.  All your friends are in the neighborhood.   However, there is nothing worse for you and your children than being “house poor.”  Wouldn’t you rather have the money to go on a vacation with your kids instead of having to repair the driveway?  You also need to consider that the house is not liquid (you can’t pay for groceries with your house) and keeping the house may mean that you give up all the liquid or income producing property.  It also means that in many cases you will not receive retirement monies that grow tax free.  At least consider moving to a more affordable house even if it is smaller or in a different neighborhood.

3.  “I should be maintained in the style to which I have become accustomed.”

Don’t assume that your husband will have to support you in the life style you enjoyed while you were together.  While in some cases a couple is sufficiently wealthy or has been sufficiently frugal to move comfortably from one household into two, this is not usually the case.  Your family will now have two rent/mortgage payments, two sets of utility bills, two subdivision fees; you get the picture.  Remember that the court looks at reasonable needs.  Reasonable needs do not necessarily include botox injections, trainers, country clubs and several cars for each party, when there is not enough money to pay the cost of an additional household.  If you had trouble making ends meet in one house, then you will have trouble making ends meet in two houses and something will have to change. In addition, most courts expect both spouses to seek employment.  Yes, this is difficult, especially when you haven’t worked throughout your marriage and you now have to juggle the kids as a single parent.

4. “I just want this over with!”  DON’T LET HIM WEAR YOU DOWN.  This may make things easier now, but this won’t make things easier down the road.  Make sure you get everything to which you are reasonably entitled. This does not mean there have to be exorbitant fees and years of litigation.  Just make sure you are thorough before you negotiate.  Get it now because your chance of getting significant additional monies later is significantly reduced.

5.  “What about his expenses at work that are paid for by his company?”

This is one of the biggest areas of lost income.  Benefits that a spouse receives are often considered as income by a court.  Make sure that an accounting is prepared to see whether there are benefits that need to be considered in his income.  These include car, gas, insurance on the car, medical payments, country club expenses, etc.

6.  “I’ve always relied on my husband to understand the finances and make those decisions.”

Consider your divorce a learning opportunity.  Make sure you have an accurate understanding of your income and expenses. Perhaps the biggest problem is that women frequently don’t pay the household bills.  Therefore, they do not have access to the total picture.  You need to obtain statements for every credit card and every bank account and prepare a spreadsheet of all expenses so that you understand what your true expenses are.  Don’t forget one time expenses that may be paid from another bank account, such as real estate taxes, vacations, summer camps, or other large items.  Don’t forget to go through all accounts, whether your name is on them or not.  Even if you’ve never had access to them, you are now entitled to access.  Don’t forget to think about annual gifts from family members that are used to pay bills. What about school costs paid by grandparents or family members?  Collect as many bills as possible to make sure that you have a complete understanding of all of your expenses.  Review the tax returns to see if there are assets you did not know exist.  Don’t forget to think about future expenses that you expect- costs for college testing preparation, visiting colleges, costs of computers for kids, setting up dormitory rooms.  And if all of this seems overwhelming, get assistance from your lawyer or an accountant or a financial advisor.

7. “I have medical insurance through his company, so I’ll be fine.”

Missouri law provides that if you have group health insurance coverage through your spouse and you become divorced or legally separated, you are entitled to continue your coverage until age 65.  The problem is that while you are married the cost of your coverage is probably being heavily subsidized by your spouse’s company.  Once you are divorced, you’ll be responsible for the entire premium, at whatever the cost is to the company.  It may be a LOT more than you anticipate.  Find out before you finish the divorce.

8. “I’m guaranteed Social Security benefits because, even though I wasn’t employed, my husband was.”

You only qualify for Social Security benefits through your former spouse if you were married at least ten years. It is important to calculate the time of the divorce so you do not get divorced right before you meet the ten year requirement.

9.  “I’ve never understood what all of our different accounts are?”

Understand the tax implications of all of the assets.  If you take the retirement plan, you have to pay taxes when you withdraw the money.  If you take the stock account, you have to pay taxes on the capital gains.  CASH IS KING.  If there is no cash, you will need to calculate the tax ramifications of your choices.  Don’t get emotionally attached to one asset at the cost of the overall picture; it may hurt you in your negotiations.  And make sure that an accountant reviews the tax returns or other tax issues to make sure that you receive the benefits of hidden tax deductions such as capital gains, net operating losses, etc. (If any of this sounds like Greek, don’t be discouraged.  That’s what accountants and lawyers are for.)

10.  “I’m so confused by this whole process.  I don’t always know what choice to make.”

Go with your gut.  If your attorney is recommending a behavior to you or a division of property that is not what feels right to you, then ASK why and make sure that there are good reasons for any decisions you make.  Take control now.  This is the first step toward your new life.

By:  Alisse C. Camazine

Be A Good Parent- Avoid These Mistakes (Part 2)

March 30th, 2010

In our last post, we gave you some suggestions about mistakes that parents going through divorce commonly (and unfortunately) make.  Here are a few more things you should stay aware of so that you can protect your children as you go through your divorce.

  1. Don’t fall prey to your children’s manipulation. It is very common for children to take sides or for them to get angry at one parent or the other. If a child gets mad at Dad for rules and restrictions, the child will soon get mad at the rules at your house. Children frequently use their parents’ anger to get what they want from their parents. It is common for the children to say bad things about Mom when with Dad and bad things about Dad when with Mom. This fuels the fire between the parents and gives the children control.
  2. Be careful what you say. Make sure the children are not within earshot when you are talking to your friends and family about your spouse. Children are smart and they know when you are upset. We can never shield them from all of the pain of a divorce but we can protect them from some of it. They too are coping with their own feelings of anger and loss. Don’t make them deal with yours also.
  3. Don’t introduce your children to a new partner until you are really sure that it is serious. They need time to adjust. If this new partner is the cause of the breakup this will surely cause bad feelings. And don’t think the children don’t know.
  4. Think twice before having a judge decide your case. When you put the decision about custody of your children in the hands of the court, you are asking a stranger who does not know, much less love, your children to make decisions about their future
  5. Consider counseling for your children. Children who are going through a divorce have many feelings– just as you do. Along with the turmoil they experience due to the break up of their family unit, children often feel alienated from their peers and believe they are “different” somehow. It is imperative that children have a “safe” place to explore and talk about their feelings. Consider whether your children would benefit from counseling, either individually or in a group setting such as Kids in the Middle. Counseling can be an invaluable resource to families going through divorce.