Money and Finances Archives | Page 10 of 10 | Collaborative Law Institute

May 8, 2013

When someone mentions divorce, where does your mind go? Do the words “fight,” “bitter,” or “vicious” come up? How about terms like, “teamwork,” “goals,” or “considerate?” It’s interesting to an experienced divorce lawyer how often the expectations include the former terms, and how often, in Collaborative Divorce, the reality includes the latter concepts.

I was reminded of this recently when a client I represented in a Collaborative divorce five years ago sent me a note. I have always remembered him because of the great shift in his attitude toward his wife by the time the case was over. When we began his divorce, he stated in an early meeting that the couple’s property should be divided in his favor, since he had always earned more than his wife (which is NOT the way the law looks at it). The statement was not well-received, either by his wife OR her attorney.

The couple had been married more than 30 years. As the case drew to a close, it became obvious that her job at a prominent Minnesota corporation, her debt-free house, and the even division of their property and substantial retirement assets would provide for her just fine. The only question left was spousal maintenance. We often see a spouse who doesn’t need financial assistance waiving maintenance—in fact, often the couple mutually agree to take jurisdiction over maintenance away from the court altogether, for all time. When I asked whether she had given any thought to waiving maintenance, she glanced at her veteran lawyer, then shyly said she would waive it. In the next instant, we were all stunned to hear my nuts-and-bolts, cut-and-dried, professional engineer client say, in a voice of genuine warmth, “I don’t think you should do that. You never know. You might need it some day.”

Approaching the end of their marriage as a family-centered problem-solving exercise, rather than a combat, allowed this wife to give up a claim I would have assumed she would keep. And it allowed her husband to decline her offer, in the interest of her potential long-term welfare, a gesture no one would have predicted. Their mutual trust of each other, reaffirmed during their weeks of working together, ultimately allowed them both to make decisions that considered each other’s welfare as much as their own.

May 6, 2013

At the beginning of a divorce, you have to choose which path to take. I think of this choice every time I see this sign in Arizona, where Bloody Basin Road is one direction, and Tranquil Trail goes the opposite way. It’s much like the choice at the beginning of a divorce. I once met a woman who had gone through a highly-contested divorce, followed by 3 years of court battles after the divorce was final. Her story is a cautionary tale of what happens when decisions at the beginning are made out of fear. Her divorce began when her husband came home on a Friday and announced that he had fallen in love with someone else and wanted a divorce. He packed a bag and moved out of the house. She was shocked, hurt, angry and scared. She was a stay-at-home mom, and she didn’t know how she would be able to take care of herself financially. When she called her family, they reacted out of fear: “You better move money out of your joint bank account before he cleans it out, and you’re left with nothing.” Panic kicked in, so she went to a bank first thing Saturday morning to open a new individual account with their joint funds. And she decided her best move was to hire an aggressive litigator who would fight to protect her. Her husband found out on Monday that she moved their money out of the joint account. He was shocked, hurt, angry – and also scared. “How could she do this? I have always provided for this family, and she made a unilateral decision to take our savings. She is going to take me for everything I have in this divorce. “ And he decided his best move was to hire an aggressive litigator who would fight to protect him. Once they lawyered up, they were off to the races, tearing down Bloody Basin Road. They each spent several hundred thousand dollars in legal fees. I wonder: How protected did they feel? How protected did their children feel? I also wonder how this might have been different. What if they didn’t stake out their fear-based positions at the outset? Imagine if they had attorneys trained in collaborative practice who could say, “Slow down. Let’s keep the status quo with your finances and give you both a chance to understand your options before anyone starts taking action.” Imagine if they had a divorce coach who could help them focus on their long-term goals for the family. Imagine if they had a child specialist who could keep them focused on how to support their children, rather than tearing each other apart. I believe they would have had a better chance of actually protecting themselves if they had used a collaborative process to manage the fear and conflict. They might have been able to drive down Tranquil Trail.

May 1, 2013

I read an interesting article in the Star Tribune this week, “Till Debt Do Us Part,” about the challenges faced by newlyweds with student loan debt, particularly when one partner has more debt that the other. This got me thinking about the strong connection between money and divorce. Money issues are the number one reason clients give me for the failure of their relationships. Debt is usually a contributing factor. In my career as a collaborative divorce attorney, clients have shared their very personal stories with me. Sometimes the story-telling is tearful and filled with regret. Other times it is angry and filled with resentment. Tension over finances can evoke negative emotions and poison otherwise loving relationships. In some cases, money issues are caused by factors outside of anyone’s control, such as job loss, a tough economy, or illness. The resulting instability can be temporary or long-term and affects the entire family. In my experience, however, disagreements about money arise when parties come into marriage with different attitudes and feelings about money. These differences gradually reveal themselves over time, eventually affecting other aspects of the relationship. Even marriages of caring, committed spouses are at risk. So how can divorce over money be avoided? Awareness is the first step. Each of us grew up in a family with its unique money culture. Whether we realize it or not, our ideas and values have been influenced by our childhood experiences. Many parents are reluctant to talk openly with their children about money, leaving the children to unknowingly form their own set of beliefs. Failure to recognize these hidden internal attitudes and assumptions in ourselves and others leads to misunderstanding and blame. The good news is that open discussion of money matters can help couples identify their differences and protect their relationships. Key questions include:

How will we manage our day-to-day finances?
How much should we be spending vs. saving?
Which budget items constitute “needs” vs. “wants”?
Will all of our money be considered joint or will we each have our separate funds?
How does each of us define “financial security”?
What are our retirement goals?

These same questions are critical to couples who have decided to divorce. In the collaborative divorce process, a team of collaborative professionals encourages the couple to look closely at their finances as they establish separate households. Rather than make assumptions, both spouses are asked to describe their goals. The settlement discussions that follow help to produce a settlement plan that achieves as many of their goals as possible. To find out more about the collaborative divorce process, visit www.collaborativelaw.org.