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Nancy Kurn (CPA, JD, LLM, MBA, CDFA)
A prenuptial agreement is a contract that two parties enter into in contemplation of marriage. It can also be referred to as a “premarital agreement,” “antenuptial agreement,” or simply a “prenup”; in Canada, it is called a “marriage contract.”
In most states, until the 1980s, prenuptial agreements were deemed against public policy and not valid to the extent they pertained to divorce or separation. They were considered against public policy, because it was thought that they encouraged divorce and allowed the husband to thwart his legal obligation to support his wife. Prior to that time, they were valid to the extent that they pertained to the death of one spouse.
A postnuptial agreement (a marriage contract in Canada) is similar to a prenuptial agreement except that it is entered into after the parties have married. In some states, postnuptial agreements are not valid if either spouse is contemplating divorce or separation.
Canadian law also recognizes cohabitation agreements for couples of the same or opposite sex that currently, or intend to, live together.
First, a brief overview of U.S. law. In community-property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), any assets that are acquired during the marriage are marital assets and divided equally between the spouses upon divorce. In equitable-distribution states, any assets acquired during the marriage are divided between the spouses in a fair and equitable manner. In many states, the appreciation in value of a separate asset during the marriage is a marital asset.
Generally, a prenuptial agreement sets forth how the marital assets will be divided in the event of divorce or either spouse’s death. It can also address what assets remain the separate assets of each spouse and what happens to the appreciation in value of the separate assets. For example: Joe has an IRA worth $200,000 at the time he marries Barb. When they divorce, six years later, the IRA is worth $500,000. In some states, $200,000 would be considered Joe’s separate property and $300,000 would be considered a marital asset to be divided between Joe and Barb.
Barb has a home worth $250,000. Joe moves in after they marry, and they use the home as their marital home. When they divorce, the home is worth $400,000. The court is very likely to decide that Barb made a gift to the family, classify Barb’s home as a marital asset, and split the entire asset. If Joe and Barb created a prenuptial agreement, they could have agreed that Joe’s IRA — including any appreciation during the marriage — would have remained his separate property and that Barb’s home — including any appreciation — would have remained her separate property.
Although there are limitations in many areas, prenuptial agreements may also cover issues of spousal and child support. The spouses can agree not to contest any estate-planning documents prepared by the other spouse and to give up certain statutory rights upon the death of one spouse. They can also agree to file joint or individual tax returns during the marriage.
Some couples also cover issues that arise during the marriage, such as their children’s religious upbringing, how household duties will be divided, how finances will be handled, and sometimes even how often the couple will have sex. These provisions are best left out of the agreement, because a judge has no mechanism to enforce them. In addition, you have to be very careful with these provisions, because if they are too unusual, the entire agreement may be deemed invalid by a judge.
In addition to addressing how the assets will be divided, it is also important to decide how debts, particularly those acquired before the marriage, will be divided.
Limitations
Generally, two parties can agree to anything that does not violate any law or oppose public policy (interest). For example, contractually encouraging someone to divorce would be against public policy and invalidate the agreement. A prenuptial agreement has several limitations; some are unique to prenuptial agreements:
- The parties must fully disclose their assets to the other party. Otherwise, one spouse is giving up rights to assets that he or she knows nothing about.
- Some states do not allow prenuptial agreements to limit or eliminate spousal support. In addition, the agreement may be deemed invalid if the spousal support is very high, because the agreement then encourages divorce and is against public policy. In Canada, spousal support provisions are valid.
- Child support cannot be limited pursuant to a prenuptial agreement. In some states, child-support provisions will be upheld as long as the support is not less than the statutory guidelines. In other states and in Canada, provisions regarding child support are invalid. Anything limiting child support to less than statutory amounts cannot be enforced. Child support is governed by state guidelines in all 50 states.
- In both the U.S. and Canada, any agreement regarding child custody or visitation in a prenuptial agreement is invalid.
- A judge could deem the agreement void based on typical contractual theories such as fraud, misrepresentation, duress or coercion. A unique circumstance with the prenuptial agreement is the timing of the signing of the agreement. If the groom takes the agreement to the bride the night before their wedding, then she could certainly argue that she signed the agreement under duress, or that she was coerced into signing it. To avoid the argument that the agreement was signed under duress, it should be signed long before the wedding takes place. Some would argue at least 30 days and others recommend before the wedding invitations are sent to the guests.
- The prenuptial agreement cannot be unconscionable. If one spouse is left destitute, the court may decide that the agreement is not valid, because it is unconscionable.
- In Canada, any provision in the prenuptial agreement regarding the right to live in the matrimonial home, or the right to sell or transfer the matrimonial home, will be invalid.
Benefits
Prenuptial agreements are not just for the wealthy. They are particularly useful in second marriages, where one or both spouses have children from a previous marriage.
Mike and Carol are going to be married. Mike is a widower and has three sons. Carol is a widow with three daughters. Both of them have assets that they are bringing to the marriage, including the death benefits they received upon the death of their first spouses. Mike and Carol are contemplating hiring attorneys to prepare a prenuptial agreement to ensure that the assets they received from their deceased spouses will go to their respective children.
A prenuptial agreement has numerous benefits. Some of these benefits include:
- The certainty it provides as to what happens in the event of a divorce or the death of either spouse.
- Protecting children from a prior marriage.
- It is prepared, in theory, when there is harmony instead of at a point when the relationship is very contentious.
- The parties can negotiate the terms of the agreement; instead of having a third party (a judge) and state and provincial laws decide how to divide the couple’s assets.
Challenging a Prenuptial Agreement
If you’re going to have a prenuptial agreement, you should each hire a lawyer to ensure that it is valid and will hold up in court. Do not try to prepare one yourselves! Steven Spielberg and Amy Irving allegedly drafted their prenuptial agreement on the back of a napkin; the court did not recognize it as a valid contract, and it has been reported that Irving received over $100 million in assets after their four-year marriage ended.
A prenuptial agreement can be successfully challenged in the following ways:
- If it has not been signed. Most states require the prenuptial agreement to be signed by the party to be charged with the agreement.
- By proving the other party did not fully disclose their assets.
- By proving that you were not represented by independent counsel. Each party should be represented by his or her own attorney. Generally, this alone will not be sufficient to invalidate the agreement.
- By proving that the agreement was unconscionable when it was signed.
- By proving that the agreement is now unconscionable based on today’s circumstances.
- The agreement can be challenged based on duress, due to the timing of the signing.
- It can be challenged on any other typical contractual theory such as fraud, misrepresentation, or coercion.
Additional Issues to Consider
Each spouse should draft their estate plans so that they conform to the terms in the prenuptial agreement. You do not want to force your children and surviving spouse to get involved in litigation involving your estate. The costs could result in everyone getting significantly less.
You may also want to consider using life insurance to replace assets that go to either your children or your spouse. For example: Mike and Carol purchased a new home with the proceeds from the sale of Mike’s previous home. Mike wants Carol to have the home upon his death. He can purchase insurance, naming his sons as beneficiaries, to replace the proceeds from the sale of his previous home.
Prenuptial agreements can be amended or revoked at any time. Some couples add a sunset provision terminating the agreement after a certain period of time, such as ten years.
Case Study: Sarah and Brad
Sarah has a technology business that she thinks is worth approximately $1,000,000. In 2003, it had gross sales of approximately $750,000 with profits of approximately $300,000 (including Sarah’s compensation). The income has steadily increased at about 20% annually. She is about to marry Brad. This will be the first marriage for both of them, and neither of them have children. Brad’s net worth is approximately $50,000 and his annual income is approximately $40,000 and increases at about 3% per year. Should Sarah have Brad sign a prenuptial agreement to protect her business?
If Sarah wants to protect her business and its future growth, then she should have Brad sign a prenuptial agreement. Otherwise, any future increase in the value of the business during the marriage would likely be split between both parties. Without a prenup in place, if Brad sometimes helped Sarah with the business, then a judge may find that the business is a marital asset and split the business. Sarah must hire an expert to perform a business valuation; better still, she and Brad could jointly decide on the expert that will perform the valuation, or each of them could hire their own expert and then average the two valuations. If this is done, then Brad would have a difficult time challenging the value of the business.
This article originally appeared on www.divorcemag.com. For more information on prenuptual agreements, visit www.jljfamilylaw.com
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Although Texas does not currently permit same sex couples to marry, and the issue of whether same sex couples legally married in other states may obtain a divorce in Texas is currently be litigated, it is possible to enter into contractual agreements regarding many issues that same sex couples face when they are beginning or ending a relationship
Protecting and Defining Financial Interests and Property Rights
When entering into a relationship, it is important to define financial and property issues such as: how bills will be paid, how property will be owned (and divided upon separation), financial support for a partner. It is possible to draft cohabitation agreements that address the issues that are important to couples in order to achieve their goals.
Same Sex Parenting
Whether a partner has children from a prior relationship, or the couple has adopted a child or conceived through artificial insemination, it is important to ensure parental authority for non-biological parents and to protect the child’s continuing relationship with parents. In such situations, it is recommended that parenting agreements be memorialized in writing.
Ending a Relationship
Many same sex couples assume they have no process to assist them with ending a relationship. However, there are two viable process options available: mediation and collaborative law. Both processes have the advantage of being confidential, and give the couple a forum for reaching contractual agreements regarding the division of property, child support; partner support, child custody, and other issues that are specific to the needs of each particular family. For more information on collaborative law, visit www.jljfamilylaw.com.
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By Jody L Johnson
As Seen in Divorce Magazine
How would you like to resolve your family-law dispute in a manner focused on the needs of the clients and not on pointing the finger and tearing down each other? How would you like to take control over the outcome of your case, rather than surrender control to lawyers, judges, or strangers on a jury? If this sounds appealing to you, then consider resolving your case collaboratively.
Collaborative law came to Texas in 1999, and it is increasingly becoming the process of choice for clients with family-law disputes. Collaborative law is client-centered. The entire focus is on the goals and needs of the client. The process is designed to provide the clients with a forum in which to find a best possible outcome for all parties and their children. A traditional litigation model is not client-centered. It is driven by the attorney and judge, as well as the rules of procedure and evidence. The primary focus is on getting ready for trial (even through 95% of cases settle), and ending the lawsuit, but not on the quality of the end product.
The process also provides a safe and confidential forum for the resolution of disputes, whereas the litigation model is public and the parties are subjected to cross examination, depositions, and court-imposed rulings. Parties who agree to handle their dispute collaboratively agree that they will not go to court to resolve disputes. They also agree to schedule four-way settlement conferences that involve the collaborative lawyers and each party. The meetings are private and organized — agendas are mutually prepared to list topics to be discussed and resolved. The rules of evidence do not apply; therefore, the parties are free to discuss whatever is important to them, regardless of whether a judge would consider it. Likewise, the parties have the ability to create tailor-made settlements for their particular family. Many times, the parties reach agreements that a court would never consider or have the authority to impose. And most importantly, nothing happens that the client does not agree to.
A frequent concern raised by clients is that their spouse may not be forth coming in providing information. Parties who contract to handle their case collaboratively also commit to full disclosure of information. Your collaborative lawyer is still there to make sure that all important information is disclosed. Additionally, many clients have a misconception that a litigation model will insure that they receive full disclosure. In fact, a litigation model is an ideal process for parties who want to play “hide the ball”, because there are many ways to abuse the court rules or use loopholes to avoid disclosure.
In order to effectively work, collaborative law requires each party and attorney to agree that if the parties cannot settle their dispute collaboratively, then the collaborative attorneys must withdraw and the parties must hire litigation counsel. This may sound scary to clients at first; however, this is what makes this innovative process work. Everyone has a stake in continuing to “think outside the box” in order to problem-solve, rather than run to the courthouse. Otherwise, the collaborative lawyers are out of a job. Your collaborative lawyer is still present to assist you in gathering and assessing information, analyzing your options, and negotiating a solution. Additionally, experts are still used as necessary (e.g., psychologists, financial advisors, and appraisers). Collaborative lawyers have additional training in communication and negotiation skills to assist you, and they are committed to problem solving for their clients.
The skills that parties learn throughout the collaborative process allow them to end their divorce or other family law dispute in a dignified manner, and assist parents in working together beyond the end of their lawsuit.
For more information, visit www.divorcemag.com.
For more information on collaborative divorce and family law solutions, visit www.jljfamilylaw.com
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As seen in The Collaborate Alliance Blog, October 2009
Even the most amicable divorces can be emotionally difficult. Rarely do you hear, “This is huge news. We’re ecstatic,” from involved parties, even in lopsided court settlements.
Then again, rarely are same sex partners given the go-ahead to divorce…in Texas, anyway. In fact, it’s never happened before.
But last week, as reported in The Dallas Morning News, Dallas state District Judge Tena Callahan ruled that two men married in another state can divorce here and that the state’s ban on gay marriage violates the U.S. Constitution.
Now, we’re not here to argue the merits of gay marriage. In fact, we’re not here to argue at all. (That’s one of the proud hallmarks of Collaborative Divorce.) The Collaborative Alliance exists simply to make dissolution of relationships a more reasoned and respectful process – one that creates healthier outcomes for all parties.
Why might a same sex couple in Dallas consider The Collaborative Approach?
• The Collaborative Process is private – between you, your partner, and your Collaborative team. Instead of a public fight in a courtroom, your Collaborative dispute is handled respectfully, discreetly and without public drama.
• Life decisions are made by clients, not the courts. Whether or not Judge Callahan’s ruling is upheld or struck down, why would any client want to put their fate into the hands of the courts? The Collaborative Alliance facilitates respectful, efficient conversation, avoiding intervention by courts.
• The Collaborative Process helps you maintain a more complete community network. In any adversarial dissolution, friends can feel forced to side with one partner or another. But the cooperative tone established in collaboration helps prevent such disruption of other life relationships, so your support network is more intact.
• Collaboration paves the way for more effective co-parenting after divorce. Open dialogue, respectful communications and the assistance of legal and mental health professionals assures both partners that they’ll be building a foundation that will allow for better co-parenting even after their relationship is dissolved. And that’s healthier for everyone – parents and children alike.
Whether dissolving a marriage or untangling a long-term relationship, The Collaborative Alliance can help couples, gay or straight, achieve a healthier outcome. Talk to us, and we’ll help you talk to each other.
For more information, visit The Collaborative Alliance http://www.thecollaborativealliance.com/blog/?p=83
For more information on family law solutions, visit www.aj-familylaw.com
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by Carla Calabrese
As seen on The Collaborative Alliance Blog
Affairs are one of the leading reasons sited for divorce. And while traditional divorce attorneys often tell clients that affairs are not appropriate cases for Collaboration, the opposite is actually true. (In fact, a quick poll of the attorneys on this blog roll would confirm that most of their cases involve affairs.)
Whether you’re the spouse who’s discovered the affair, or you’re the one who is having it, Collaboration can create a better outcome than giving up control to the courts – healthier for children, more private, and more financially beneficial.
Now, If your spouse had the affair, you may be thinking, perhaps even justifiably, “I want him/her to suffer. I want their paramour to be scared or embarrassed by a subpoena – serves them both right!”
While these emotions are natural, acting on them is dangerous and just plain bad business. Unfortunately, there are attorneys who fuel this bitterness and acrimony. And by stoking adversarial fires, they can actually protract the proceedings. Guess who “wins” then.
Traditional divorce involving a workplace affair is especially problematic. If the boss finds out, your spouse could be fired! And if that spouse is a substantial or even sole source of income, everyone loses.
Worse, sometimes having an affair with a colleague could give rise to a lawsuit for sexual harassment. Community dollars that you could get in the divorce settlement would be spent on lawyers defending a sexual harassment suit or more likely, paying off the paramour. (Yes, it happens!)
Yet there are adversarial lawyers who pursue workplace affair cases for “stay at home moms,” knowing that litigation may be jeopardizing the couple’s only significant asset – the husband’s job and/or career.
Collaborative Divorce works best for affairs because:
1. It protects all parties’ privacy. No matter which side you’re on, you want privacy. Collaborative divorce is a confidential process. No court, no hearings, no deposition of your boyfriend reciting all the sordid details, no girlfriend being cross-examined on the stand at your trial. No public statements from the cheating spouse about why they “needed to look outside the marriage…” Privacy is your friend. Collaborative Divorce is the only real way to assure it.
2. Legal costs can be lessened. In the collaborative process, the affair is dealt with mainly by the mental health professional. If one or both spouses desire, the mental health professional can meet with them individually and/or together outside the purview of the lawyer. This can dramatically decrease legal costs.
3. It keeps the control where it belongs – with the clients, not the courts. You can reach your goals with more dignity and more efficiently than litigation could ever provide.
Sometimes, despite an affair, a couple actually reconciles during Collaboration. Given the confidential and non-blaming nature of the process, this makes sense. The opportunity is there and has not been destroyed by aggressive, alienating actions often taken in a traditional divorce case.
That’s the benefit of Collaborative Divorce in every case – less damage, more dignity. And that’s something all divorcing couples can use help with, especially in the case of an affair.
For more information on The Collaborative Alliance, visit www.thecollaborativealliance.com
For more information on family law solutions, visit www.aj-familylaw.com
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By Jody L. Johnson
Contemplating divorce is scary, and lack of information further drives fear. There is so much information on the internet about divorce that it is virtually impossible for a lay person to separate fact from fiction. The best course of action is to talk to more than one competent attorney. I recommend getting personal referrals and then checking out those individuals by reviewing their website, checking out whether they have any complaint history with their State Bar, as well as looking at other peer review ratings that might be available for attorneys in your area. Just as you wouldn’t generally select a doctor randomly, you should be just as cautious in selecting an attorney. Consider talking to friends, your minister, CPA’s, or attorneys you may know who do not practice in the area of family law. Martindale-Hubbell Peer Review Ratings attest to a lawyer’s legal ability and professional ethics, and reflect the confidential opinions of members of the Bar and Judiciary. The ratings cannot be purchased by attorneys.
You should expect to pay some kind of consultation fee to see an attorney. Again, think about if you were going to see a doctor to get advice on what is wrong and how to treat the problem. You expect to pay for their expert advice, and seeing an attorney is no different. Although there are good attorneys out there who don’t charge for consultations, most do, because good attorneys are busy and can afford to charge for their consultation time.
Before the consultation, write out a list of questions that you have so you don’t forget to get your important concerns addressed. A good attorney will be patient in responding to your questions. You will want to ask about the attorney’s level of experience: do they have experience with the particular issues in your case, and how often do they go to court in the area where you reside. You will also want to make sure that you understand the steps involved in your divorce, and ask the attorney how you can best protect yourself during the process. Again, the attorney should gladly respond to all of these questions. If it feels as if the attorney is putting you off (“we’ll get to all of that later”), I would say that is a red flag that the attorney is more concerned about signing you up as a client then serving your interests.
Look for an attorney who asks you lots of questions about what is important to you (e.g. quality time with your children, keeping your business, etc.). You want an attorney who is listening to your concerns rather than one who does all the talking and tells you what they will do. Be wary of attorneys who make promises about the outcome of your case. No competent attorney can tell you that in a consultation; they don’t have nearly enough information. Also be wary of attorneys who act as if they will come out with “guns blazing” for you. Although that may feel good to know that someone will be your protector, more often than not, an extremely aggressive approach is counter-productive to your interests. It will likely increase the level of hostility with your spouse and decrease your ability to reach a favorable settlement. At the same time, it will increase the attorney’s fees dramatically, which benefits the attorney but not you. That being said, you need to know that your attorney knows how to prepare a case for trial if necessary and then actually try the case. Find out how much experience they have at the courthouse.
As far as steps you can take before you see an attorney, the best thing you can do is to gather and organize information. Absent a true emergency, do not make any major decisions in advance of consulting with an attorney. Don’t move money, withdraw money from financial accounts, cut off your spouse’s ability to use credit cards, etc. without getting some professional advice.
It will help you and your divorce attorney if you are able to organize your financial information. Make a budget that lists all current monthly expenses of the family, including any unusual expenses that are coming up (replace roof; college tuition payment, etc.). Also make a list of all of the assets (house, bank accounts, retirement, life insurance, cars, etc. – not a list of your furniture and furnishings) and debts. Include accounts numbers if you have those. Make copies of the last 3 years of tax returns, most recent pay stubs for you and/or your spouse, and the most recent statements for your financial and retirement accounts. Don’t worry if you don’t have access to this information. Lots of people don’t and your attorney can help you obtain it. However, if you do have it, it helps you stay ahead of the curve.
Depending on the issues in your case, it may also be helpful to copy cell phone records, emails, credit card statements and Face book pages if there is concern about an affair.
For more information on Kip Allison and family law solutions, visit www.aj-familylaw.com
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By Jody Johnson
The most important step you should take in planning for a divorce is to hire an attorney who will inform you about your options and help you make decisions for your futures. This is your divorce. The decisions you make now will have lasting effects on your children and your financial security. Now is not the time to surrender control. You want to find a lawyer who will act as a professional partner with you; one who will inform you about all of your legal options, help obtain relevant information, and explain the pros and cons of each possible option so that you can make the best decision at this critical time.
If you don’t like everything that you are hearing from the attorney, then the attorney is probably shooting straight with you. No client has a perfect case. You do not want a cheerleader or best friend who tells you what you want to hear. You need accurate information to make informed decisions. If you are contemplating divorce, you are not functioning at your best. You need a clear-thinking advocate.
Even at the initial consultation, an attorney should be able to clearly explain to you a general strategy for getting you divorced, and explain the reasons why the strategy is recommended. You should feel comfortable with the attorney and if you don’t, find someone else. Rely on your instincts.
Clients have the option of litigating or collaborating their divorce. Litigating means that your disputed issues are resolved through the court system. A collaborative divorce is an option if you want to resolve issues away from the courthouse, focus on you and your children’s interests, and have control over the outcome. The process incorporates the benefits of a neutral financial professional and mental health professional (sometimes referred to as “divorce coach”) to help you and your spouse communicate more effectively and develop and negotiate parenting and financial plans. There is a contractual agreement to stay out of court. You should inform yourself about these options in advance of seeing an attorney and consult with an attorney who is knowledgeable about both options. A lawyer who only practices family law one way cannot fully inform you and you may end up selecting a process that is not best suited for your situation. Also be cautious of an attorney who only practices in one arena and tells you that your case isn’t suited for the other; there is an obvious financial incentive on the part of the lawyer who will lose your business if he recommends an options for you that he can’t provide. For more information about the collaborative option, see the website for the International Academy of Collaborative Professionals (www.collaborativepractice.com) or the state organization in your particular state.
For more information on Jody Johnson and family law solutions, visit www.jljfamilylaw.com
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By: Jody L. Johnson of Allison | Johnson
There are lots of lawyers who will tell their clients that it is not possible to have a collaborative divorce with an active alcoholic or drug user spouse. Although it does present special challenges, it also presents an opportunity to protect children and reach settlements that would not be possible in traditional litigation. There are those limited cases where a person is so deep into their addiction that they cannot participate effectively in the collaborative process. However, those same people cannot effectively participate in litigation either and likely need to be in a treatment program in order to proceed in any process.
In Texas, the Courts are mandated by law to order a parenting time schedule that has the minimum restrictions required to protect children. As a result, in most cases an addict parent will have parenting time with their children, and it may not be supervised (or be supervised for a limited period). Almost always, the other parent is extremely upset with the outcome at the courthouse. Additionally, the parents become more polarized because the addict parent is angry as a result of being embarrassed at the courthouse by having his/her addiction “on display”. The addict parent typically sinks deeper into denial, all to the potential detriment of the safety of the children. They also become angry at the other spouse and take an attitude that “I won’t give them a penny more than the court orders”. In the collaborative process we are much more able to monitor the addiction and keep a lid on the situation. By discussing the addiction in a completely private and confidential setting, and without pointing fingers or assessing blame, we are more likely to get cooperation from the addict parent. Rather than focus on the addict parent, we focus on the addiction as a family problem and look at options for everyone to deal with it. Once they realize that we are not going to focus on them as the bad guy, they tend to be more open to exploring ways to keep the children safe and many even agree to seek treatment. When the addict parent feels like he/she has had some measure of control over the situation, then they are more invested and more likely to be compliant with the agreements they make. I have seen addict parents acknowledge that they are not ready to go into treatment and come up with parenting plans that are very protective of their children but allow them to have some form of relationship. I have also seen addict parents admit to relapse at some point in the process because they feel safe in doing that. In the litigation model, they hide their addiction because they know it will likely be used against them harshly.
By avoiding the blame game, clients are also more likely to obtain more favorable settlements than they might in court. When backed into a corner, most of us dig in our heels and become focused on not giving the other person what they want. In collaborative, clients are often open to favorable trades in exchange for their spouse showing them some respect and not using their addiction as a weapon.
For more information on Kip Allison and family law solutions, visit www.aj-familylaw.com
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US News & World Report
Two fascinating legal trends reflect society’s sea change in attitude toward family and interpersonal relationships. The first is collaborative divorce, which sounds like an oxymoron but is actually a brilliant concept. The second, which I’ll get to in my next blog entry, is “legalized friendships.”
Marriage expert Stephanie Coontz wrote recently in the Wall Street Journal that since the 1980s, Americans have been inventing ways to make divorce less adversarial.
“The War of the Roses” is so yesterday. Divorced best friends is so 21st century. We’ve finally learned that failed relationships need not ratchet up to and end in nuclear-like conflict.
There are several reasons for collaborative divorces, not the least of which is cost savings. Mediation is still cheaper than collaborative divorce. But collaborative divorces are considerably cheaper than nasty, drawn-out, litigated divorces. Coontz quotes one expert who estimates the average cost of a mediated divorce is less than $7,000. The average cost of a collaborative divorce is less than $20,000. The average cost of a divorce negotiated by rival lawyers is $27,000, while a primo-style, nasty, litigated affair runs some $78,000.
So what is a collaborative divorce? The rules, Coontz says, are simple: “The divorcing couple and their attorneys agree in advance that they will disclose all pertinent information and will jointly engage neutral experts rather than hired guns . . . The attorneys agree not to litigate; if the process breaks down (as it does in about 5 percent of the cases), they are bound to withdraw rather than pursue the case in court. If the spouses then choose to litigate, each must hire a new lawyer and start from scratch.”
My first husband and I must have been trendsetters when we used the same lawyer in our mid-’80s divorce. We were in our twenties, just starting our careers, and had no children, and there was not a lot on the table to scrap over. We jointly owned a one-bedroom condominium, and neither of us had much in savings. I do not recall the exact cost of our parting, but it was minimal. Clearly there are the Paul McCartneys/Heather Millses of the world, to whom a civil parting of the ways is impossible. But for most of us, collaborative divorce is a welcome addition to the array of options.
The family-values crowd apparently worries that more options will drive up the divorce rate. That seems like a silly objection. If I wanted to be funny, I’d ask: What could drive up the divorce rate much higher than it already is?
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By DAVID CRARY AP National Writer
Collaborative divorce. The term sounds like an oxymoron in a culture steeped in high-cost, high-conflict breakups.
Yet many couples are embracing the approach, recently endorsed by the American Bar Association, as part of a broader quest to find more civilized, efficient ways to end a marriage. Do-it-yourself divorces and mediation also are popular options.
Lawyers by the thousands want to be part of the trend.
“Most of us had that moment where we realize the adversarial process is so damaging for our clients _ and there’s a recognition that we can do better,” said Talia Katz, a former divorce lawyer who is executive director of the International Academy of Collaborative Professionals.
Katz said the academy, just eight years old, now has 3,000 members, mostly lawyers but also financial planners and other professionals. She estimates that 20,000 attorneys have received training in collaborative law, and groups promoting the practice are active nationwide.
In contrast to mediation, in which divorcing couples entrust a resolution to a single neutral mediator, collaborative divorce involves the use of attorneys for each party, often joined by other expert consultants. But the lawyers, instead of sparring, pledge from the outset to work together in crafting an outcome that is fair to all.
“Most clients in a dispute are looking for an honorable peace, not war,” Boston lawyer David Hoffman wrote in recent op-ed for The Christian Science Monitor. “Collaborative lawyers can be just as zealous about seeking such a peace as litigators are about victory in the courtroom.”
Hoffman works at the Boston Law Collaborative, where the staff includes a psychologist and a financial planner. It offers divorcing couples a range of options, including mediation and collaborative divorce as well as conventional litigation.
The firm analyzed 199 of its recent divorce cases, and found that mediation, collaborative divorce and litigation all produced high rates of successful settlement. Mediation was by far the least expensive option, with a median cost of $6,600, compared to $19,723 for a collaborative divorce, $26,830 for settlements negotiated by rival lawyers, and $77,746 for full-scale litigation.
Sarah Smith, 47, of Sudbury, Mass., said she and her ex-husband, David Boyle, were able to complete a swift collaborative divorce two years ago for roughly $5,000.
“It was definitely the way to go in our situation _ we didn’t have piles of anger about each other, and we also didn’t have piles of money,” said Smith. “Our main concern was the welfare of the kids.”
Smith, Boyle and their two lawyers arranged for the two children, now 11 and 7, to split time with their parents, who live in neighboring Boston suburbs.
“We both liked both lawyers,” Smith said. “As a group, we had some laughs together, and that made it nicer.”
Boyle shares her appreciation.
“Because this process went so smoothly and we didn’t have a lot of baggage as a result, now the tone is set for raising the kids,” he said. “We get along. We work together to make it happen.”
Another appeal of collaborative divorce is confidentiality. While some high-profile divorces play out in court, billionaire Roy E. Disney, nephew of Walt Disney and a major shareholder of The Walt Disney Co., embarked last January on a collaborative law divorce with his wife of 52 years, Patricia, that has avoided the limelight.
Supporters of collaborative law were dismayed last February, when the Colorado Bar Association declared such arrangements unethical on grounds that they prevented a lawyer from exercising undivided loyalty to a client. But in August, the American Bar Association’s Ethics Committee weighed in, endorsing the collaborative process as long as clients were fully informed about its provisions.
The growth of collaborative law is part of a broader trend away from courtroom divorce proceedings. Even members of the American Academy of Matrimonial Lawyers, who serve a relatively affluent clientele, reported in a recent survey that increasing numbers of cases are being settled before trial.
“As cases get more expensive, a lot of people don’t want to spend the time, the hiring of experts that a trial entails,” said Gaetano Ferro of New Canaan, Conn., who just completed a term as the academy’s president.
Though his own business remains brisk, Ferro says he has observed an “explosion” of pro se divorces, in which one or both parties represent themselves.
There are no national statistics on pro se divorces, but recent surveys indicate that well over half the divorce cases in many jurisdictions now involve at least one pro se party.
To accommodate these non-lawyers and minimize procedural disruptions, many courts have established self-help centers and clinics. Easy-to-read instructions and legal forms are posted online. Sometimes case managers are available to guide people through the process.
In another trend called unbundling, several states now allow attorneys to offer limited help to people who can’t afford a full-service divorce. This coaching _ for example outlining options and helping draft a final agreement _ might cost $1,000 or so, many times less than the fee for full legal service.
Mediation is another popular option for divorces, although statistics on its use are scarce. Private mediation services abound, and many courts encourage or require an attempt at mediation in divorces involving disputes over children.
“At the heart of mediation is the belief that people can solve their own problems,” said Carl Schneider, a psychologist whose firm, Mediation Matters, serves divorcing couples in the Washington, D.C., area.
Schneider skeptically views collaborative divorce as an effort by lawyers to feel better about divorce work.
“There may be cases that need to be litigated _ but often you’re doing major damage to families, and attorneys know it,” Schneider said. “Collaborative law lets them think they’re doing something more useful.”
He depicted the collaborative approach as “a model for upper-middle-class divorce” because its price tag generally would be higher than mediation.
Rita Pollak, the Boston lawyer who represented David Boyle in his divorce, said mediation might be a good option for some couples, but there are reasons to try the collaborative approach.
“At mediation, each partner has to come to the table and speak for himself or herself at a really emotional time, and sometimes there’s an imbalance in knowledge or power,” she said. “If you don’t have your attorney at the table to protect you, the mediation can be pretty tricky.”
Among Schneider’s recent mediation clients is Bill Sanjoy, 45, of Bethesda, Md., a budget manager for a federal agency. He says he spent less than $5,000 on his divorce _ a third of what he had projected using an adversarial process.
Sanjoy emerged on good terms with his ex-wife and satisfied with a co-parenting arrangement for their two children.
“It’s nice to have someone who’s not antagonistic, who’s not trying to start a war, who wants you to be able to conclude a very difficult time in your life,” Sanjoy said.
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On the Net:
Collaborative divorce: http://www.collaborativepractice.com
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