How are Complex Financial Issues Dealt With in a Collaborative Divorce?

 It is not uncommon in any divorce situation that difficult and complex financial issues arise. The couple may own a business or one spouse may have a professional practice, with several partners. One spouse may be a high income professional and the other a modest wage earner or stay-at-home mother or father who has never had a career. They may own complex investment portfolios or participate in complex pension plans, 401(k) plans. They may own annuities or numerous rental properties.

In a conventional, adversarial divorce, especially if the divorce is hotly contested or the parties or their attorneys have not attempted or are not interested in reaching a negotiated settlement at the early stages of the proceeding, each side will often retain the services of various experts or advisors, such as appraisers, accountants, business valuation specialists and the like with the aim of possibly using such professionals as expert witnesses at the time of trial. In the Collaborative process, the parties jointly retain any expert professional advisors that may be needed or desired.

These professionals act as neutral advisors whose job is to assist the parties and their attorneys in structuring a settlement that meets the underlying short and long-term needs of both parties. Thus, if the Collaborative case involves the valuation of a business or professional practice, the parties may choose to hire a specialist, such as a CPA, to recommend how to best divide up or sell the business or simply value the business as part of the marital “pie.” In the Collaborative process, there is no “battle of the experts.”

The experts are neutral and work for the best interests of the couple and the Collaborative process. In cases where property or income issues are complex, these professionals are a key part of the interdisciplinary team of professionals, including the attorneys, who are there to help the parties make the best, most informed decisions in a dispassionate manner consistent with the goals of the Collaborative process. The participants – even the Collaborative attorneys – in the Collaborative process work as part of a team to empower the spouses or other parties to self-determine their settlement and meet the unique needs and address the particular concerns of both spouses.

The Divorce Coach as an Essential Part of the Collaborative Process

In nearly every divorce or custody case, no matter how “amicable” the parties seem, their deeply felt emotions a significant and often crucial role in preventing or inhibiting the parties from reaching a mutually acceptable, negotiated settlement in a dignified, efficient and cost effective manner. Divorce (including all issues related to the divorce itself) has long been recognized as one of the most severe emotional crises one may face in life, comparable even to the death of a spouse or child.

Divorcing spouses experience the full panoply of emotions – such as fear, anger, resentment, shame, sadness, guilt, depression and denial, to name a few – which emotions are brought into the divorce process, often unconsciously. As a result, these intense emotions and stressors frequently become one of, if not the main, impediment to the parties’ ability to reach a timely settlement agreement at all or attain an agreement that is mutually acceptable and fair. Emotional issues almost always drive up the cost of a divorce, often substantially, and cause the legal dispute to drag on unnecessarily for months and even years. For this reason, the Collaborative team includes a divorce “coach,” who acts as a “neutral” in the process, to help both parties learn to communicate respectfully, constructively, assertively (but not aggressively), and to recognize or be more aware of their “trigger points” and otherwise manage their emotions by becoming more conscious of the effect that their emotions may be having on the ongoing Collaborative process.

Although divorce coaches, because of their training and experience in therapeutic techniques, including mediation, are often drawn from the mental health profession, they do not and may not act as therapists during the Collaborative process, but more as facilitators. The experience of nearly all Collaborative lawyers is that the use of a skilled divorce coach (and sometimes a parenting or child specialist if needed)  in the early stages and often throughout the process actually significantly reduces the time required to negotiate the terms of a settlement – less time is wasted “spinning the wheels” and more on getting the hard work of negotiating done – and can substantially reduce the overall cost of the Collaborative process even taking into consideration the added cost (which is shared by both parties) of retaining the services of a coach.

The Essence of the Collaborative Law Process

The most distinguishing feature of a Collaborative divorce and of the Collaborative process, in general, is the strong intellectual, emotional and financial commitment by all participants, from the very start of the process, to attaining a mutually acceptable settlement of all disputed matters without going to court. That commitment is formalized at the very first meeting when the Collaborative parties and their respective Collaborative lawyers thoroughly review the terms of and the parties then enter into a formal Participation Agreement.

The Participation Agreement stipulates that the sole goal of all participants in the process is to reach or assist the parties in reaching a negotiated settlement, out of court – without even the threat of going to court – in an honest, dignified and respectful manner, based not on the threats or demands of the parties, but on the underlying legitimate needs, concerns, fears and goals of both parties. A key structural component of the Collaborative process is the so-called “disqualification” provision which says that if the Collaborative process terminates, for any reason, without the parties having reached a mutually acceptable agreement, their lawyers – as well as any other professionals who may have participated at some point in the process – may not continue to represent or assist the parties in court.

The disqualification provision creates a built-in financial, intellectual and emotional incentive for everyone to put the maximum effort into reaching the very best negotiated settlement agreement the parties are able to make. Every participant, including the parties’ Collaborative attorneys, has a stake in the outcome of the Collaborative process.

If a negotiated agreement is not attained for any reason, the Collaborative lawyers are literally out of a job. They are forbidden from representing their Collaborative clients in court. Likewise, if no settlement is reached, the parties, in most cases, will need to hire attorneys who, at least initially, are completely unfamiliar with their clients’ cases, to represent them in an often difficult, stressful, time-consuming and expensive adversarial process which is the hallmark of the conventional legal system.