May 2015 | Collaborative Law Institute

May 29, 2015

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Collaborative Divorce was started in Minnesota 25 years ago and has spread to more than 20 countries because it meets two basic needs felt by divorcing couples around the world. What does it mean to say that a divorce is Collaborative? First, it is important to understand that difference between the formal Collaborative divorce process (with a capital C) and the use of the word collaborative. To be collaborative simply means to work together and, in that sense, any divorce in which people work together could be described as collaborative, (small c). However, the Collaborative divorce process is something distinctly different. Most people want to keep their divorce amicable, and Collaborative Divorce gives them the tools to work out of court to make that happen. At the same, people facing divorce want to know that they are protected; that they have someone looking out for their interests. Collaborative Divorce provides each party with an attorney who will work with them to help them achieve their most meaningful goals. In a Collaborative Divorce, the attorneys must withdraw if the matter goes to court in an adversarial proceedings. That is the one rule. A rule that is simple and yet, changes the entire tenor of the divorce negotiation. It is a great example of addition by subtracting. By subtracting one element, (the ability of the lawyers to fight), a door is opened to add many more valuable tools (true interest based-bargaining, teaming with financial experts and mental health professionals, deeper solutions, etc.). That one change redefines the negotiation and creates a ripple effect that, if handled in a skillful manner, creates many more options. People sometimes hire aggressive lawyers, reluctantly; believing that their spouse will be aggressive and that they, therefore, need to “fight fire with fire”. The problem, of course, is that fighting fire with fire means there is a great risk that someone (maybe everyone) will get burned. Collaborative Divorce, with the agreement not to fight, is intended to put out the fire, so that you, and your spouse, can build their future on solid ground. That is not easy to achieve. It requires skill and commitment. An attorney who cannot use argument and fighting must have other skills. Equally important, clients who intend to achieve their highest goals without fighting must be prepared to work on developing other skills as well. To learn more about the Collaborative Process and to find experts with skill and experience in this area, go to www.collaborativelaw.org or www.divorcechoice.com.

May 26, 2015

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There was an interesting article in the New York Times regarding divorce statistics. It theorized many different reasons the divorce rate seems to be decreasing in the United States. Perhaps, the economic downturn has caused couples to stay married longer rather than incur divorce costs? People may be getting married less. The author suggested that perhaps certain states or counties skewed the national data, however, state-by-state and county-by-county analysis seems to imply that the divorce rate is dropping nation-wide. In reality, it does seem like the divorce rate is dropping Another divorce statistic that is often discussed is the rate of divorce in second and third marriages being significantly greater than first marriages. Like the drop in divorce rate overall, there is not necessarily an explanation for the statistics but rather a reporting of them. One potential reason for the increased divorce rate in subsequent marriages is that the later marriages are entered into without as much due diligence. People rush into later marriages for the companionship. Another theory suggests that subsequent divorces are “easier” and less daunting because the individual has already survived a divorce. Regardless the reason behind divorce statistics, the facts remain. If you are going through divorce, however, the statistics don’t mean much. Your personal experience is all that matters and knowing your options – collaborative divorce and other alternative dispute resolution processes – can help you survive and thrive through a divorce.

May 20, 2015

Peace is possible though we are surrounded by conflict. In the recent words of former Secretary of State Madeleine Albright, “The world is a mess.” Messiness occurs when people are unable or unwilling to resolve differences without wars of words or weapons. This occurs not only globally but also on a personal scale. And for all the extraordinary human costs of violent conflict, the most deeply distressing is its impact on children.

The end of a marriage has some similarities to the breaking up of a country based on sectarian differences. Is it possible to disconnect without civil war? Yes, but one must be mindful of the path one is choosing, and deliberately opt to not do battle. Though sometimes complicated, peaceful resolutions are possible if the focus remains the safety and well-being of children.

I do not believe conflict is inevitable, because for every cause of conflict there is an inverse possibility. In our day-to-day lives, we can choose a path of peace. We can elect to follow The Four Agreements as defined by Don Miguel Ruiz in his book by the same name, and use these principles to help us resolve our differences:

1. I will be impeccable with my word.

2. I will not personalize what the other person says, does, thinks or believes.

3. I will make no assumptions.

4. I will do my best every day with the energy I have been given.

In Collaborative Team Practice, parents who are getting unmarried can draw from sources of support for the emotional, financial, parenting and legal issues that are involved. Parents remain in charge of their own outcomes, but are given tools to keep the process as respectful as possible, thereby setting the stage for child-centered co-parenting in the future. And the world your children will inhabit is in the future. Let it be a peaceful one.

May 8, 2015

Getting unmarried and taxes can become a consideration in terms of whether to have a divorce final by year-end or final after January 1. I have worked on a number of divorce cases where this very topic deserved a thorough analysis to determine which tax filing year to have the divorce final. Here are a couple of important points to remember. If you are married for the entire year, the choices you have for tax filing are joint or married filing separately. If the courts deem the divorce final no later than December 31, you are considered divorced for the entire year and are not able to file jointly or married filing separately. An entry of divorce on December 31 requires filing as single or if qualified as head of household for the year ended December 31. How do you determine which year is best? Usually this requires completion of the various tax return scenarios by a qualified tax advisor normally a CPA or Enrolled Agent. They will run the numbers for a joint return as if the couple was married the entire year. Next, they will run the numbers as if they were divorced for the year with either a single or Head of Household filing status if qualified. Whatever method results in the lowest combined tax for the couple preserves more of the family assets and resources. Sometimes this can amount to thousands of dollars. I recently concluded a collaborative divorce case as a financial neutral for a couple where this very issue came up. My initial analysis revealed the couple could in-fact save thousands of dollars by having the divorce final by year-end vs. filing a joint return for 2014 and the divorce final in 2015. A thorough and complete analysis by a CPA confirmed the couple would save approximately $20,000 in income taxes by having the divorce final no later than December 31. Needless to say, this couple would much rather have the $20,000 in their pockets vs. having to forfeit that amount to the I.R.S. Although divorce documents are e-filed with the courts, there is no guarantee the divorce will be final by December 31. Once the documents are received by the courts, the file is assigned to a judicial officer for review. Files submitted in late November and December are not automatically reviewed and approved by year-end. Attorneys working on the case will often make requests to have the review and entry of divorce completed by December 31. I hope that in this most recent case it will be. It is always worth a try especially when you have $20,000 on the table. Do not overlook the tax strategies and any potential savings when divorcing near year-end. It could potentially save you and your family a bundle.

May 4, 2015

Parents with children who attend college get to take part in the annual ritual of filling out the Free Application for Student Aid (FAFSA). The FAFSA can be nearly as difficult as Calculus 101, but unlike calculus this math, can have real implications to your life and financial situation. If you are divorced with a child heading off to college, below are some things that you should know about FAFSA and student financial aid. The custodial parent is responsible for filling out FAFSA and it is only their financial and household situation that are reported on the FAFSA. This can have important implications for determining eligibility for aid and for calculating the Expected Family Contribution (EFC) to the student’s college expenses. Determination of the custodial parent follows the criteria below, in descending order of importance:

The Custodial parent is considered the parent with whom the child lived the majority of the time over the 12 months prior to completion of the FAFSA (not the previous calendar year).
If custody time is equally split, the parent providing more financial support over the past 12 months.
The parent that provides more than half of support now and will continue to do so in the future.
The above are the primary criteria, but other criteria used to substantiate the above include who has legal custody, claimed the student on their tax return or has the higher income.

Legally separated parents are considered to be divorced. Never married biological parents are treated in the same manner. Many private colleges do consider the non-custodial parent as a potential source of support, and require a supplemental financial aid form from the non-custodial parent. This affects the awarding of the school’s own aid, but not federal and state aid. The federal government does not consider the income and assets of the non-custodial parent in determining a student’s financial need. However, it does consider child support and other support received by the custodial parent. If the custodial parent has remarried, the income and assets of the stepparent are to be reported as well. Any prenuptial agreement that absolves the stepparent of responsibility for college funding is ignored by the federal government. Potential Impact of the Divorce Process on Student Aid Eligibility A divorce that is still in process or recently completed can have a serious impact on student aid eligibility. The following are common divorce maneuvers that raise the reported income of a custodial parent:

Investment and property liquidations
Retirement plan divisions that include a distribution to the parent
College expense payments required by the divorce decree will be included in the student’s income.

If you are in the process of getting divorced and have a child in college or heading there soon, you will want to consider how your divorce will affect your child’s financial aid eligibility. A maneuver in the divorce process to financially equalize both parties may backfire if it negatively impacts financial aid eligibility.

May 1, 2015

Most of my work as a lawyer involves representing clients in Collaborative divorces, and most of those cases involve the use of neutral experts to advise the couple on finances, child development, and communication/relationship dynamics. The idea is to provide them the best professional information in a non-adversarial setting so that they can make well-informed choices when resolving their divorce issues. Very often, the first of these professionals a couple visits will be their neutral coach/facilitator, whose responsibility, if hired, (among many others) will be to help couples appreciate where their communication styles get in the way of decision-making. I’m fortunate to have some wonderful professionals available to serve my clients in that role. In recent years, the coach I work with most often is Lee Eddison, someone who embodies the art of compassionate listening, but who doesn’t hesitate to call a spade a shovel after more nuanced attempts at guidance have been unavailing. One of the assessment tools she uses is to ask each member of the couple to say three positive things about their spouse’s parenting ability. “He doesn’t suck,” doesn’t count, either. She knows that if someone can appreciate a positive contribution to the family made by someone they dislike, there’s an excellent chance they can have an interest-based conversation en route to a resolution. That’s not to say there aren’t other bumps in the road, or good reasons to end the intimate partnership. But the ability to appreciate that duality in their partner at a time when it counts–when you’d least like to–gives that appreciation a power and a significance it won’t have later. It has proven to be a fair bellwether of success in a Collaborative process. Very few individuals who go through a divorce are all good or all bad. There’s a saying in the court system that “In criminal cases, we see bad people at their best, and in family cases we see good people at their worst.” It’s a sound bite, of course, but it’s often true. For divorcing couples who can appreciate the good things their partner has contributed, the chances of escaping the not-so-good parts without making it worse are much higher.