Collaborative Divorce Archives | Page 18 of 23

December 20, 2013

A divorce is not only an emotional event, it is a financial event. As the year ends, people often focus on tax implications of divorce. Being planful and mindful of taxes may benefit both spouses moving forward. Having a good collaborative team can help you work through tax issues and make the best financial decisions possible. Here are some things to think about regarding taxes and divorce: If you are still married on December 31, you can file your taxes jointly as married–even if you are divorced by the time your taxes are due. You may want to work together to determine the best overall tax scenario and work together to save the family the most money possible in a given tax year.

You may want to include language about the tax consequences for your last year of marriage in the decree. Clarifying that any liability or refund for that year is shared, could save you effort later in the year when one or both of you have a claim to the other’s refund/liability.
The IRS does not care about the specifics of your property division. Unless it is explicitly in the decree, the IRS will not consider whether one of you received more property in exchange for less tax liability. The IRS operates on its own and you should obtain attorney advice on tax liability before finalizing the divorce.
You may want to look at the tax implications of filing as Head of Household v. Single post-divorce. Who will claim the dependent exemptions? Do the exemptions need to accompany other benefits claimed such as healthcare reimbursement or child care benefits? Taking the time to think through these issues before finalizing the divorce could save you time and money later.

Because the ramifications of financial decisions can linger long after a divorce is finalized, it is important that you work with an attorney who is experienced in divorce and financial issues so that there is less likelihood that you will have later financial questions. The collaborative process allows for open and thorough examination of tax issues and financial impacts down the line.

December 13, 2013

Marie and Tim are divorced, but decided to enter CBS’s Amazing Race and spend 24 hours a day together tackling obstacles under constant stress with $1 million on the line. They ended up in 2nd place and did not win the million, but think about how wonderful it is to see exes working together in a way that gets them all the way to 2nd place in a highly competitive race on reality TV. In their Race bios they both complained that the other does not listen well and always needs to be right. Tim wrote, “I would like us to be able to communicate what’s best for each other as an ‘us.’” In the Collaborative Divorce process we begin by asking the couple about their goals for finances, children, housing and their own relationship. Do they want to stay friends? Do they want to stay connected to in-laws? If there are children, do they want to share activities with their re-structured family? Often, divorcing couples will identify the exact same goal Tim identified above. Collaborative Divorce recognizes that dissolving a marriage does not have to be the same as ending the relationship. Many couples prefer to stay friends. In the Collaborative Process, couples can work with a neutral divorce coach to have honest conversations about their patterns of interaction and communication. It is an opportunity to say, “Yeah, we both want to always be right and neither of us listens very well.” That kind of frank, open communication can lead to the ability to continue a rewarding relationship and, apparently, even try to win a million dollars together! Tim and Marie, I wish you had the million. Thank you for showing us that a couple can end their marriage, disagree with each other, have typical relationship conflicts, get frustrated with each other AND stay friends who can work together for a common goal whether it is for themselves, their children or the possibility of a million dollars.

November 26, 2013

Rupert Murdoch’s divorce from his third wife is all but final. It seems they reached a settlement agreement that presumably divides their assets and details a parenting schedule for their two children. Who did what to whom? Who is the more capable parent? What is the settlement? What did the reported prenuptial and multiple postnuptial agreements say? We will never know and it is for the best. While the details would have provided entertaining reading about how the other half live, the family will benefit from not having their opinions/positions about each other immortalized in an affidavit or court transcript. While I can only guess what went on behind closed doors, I believe the following quote from their publicist hints that they may have gone into negotiations with a shared goal of dissolving their marriage in a respectful manner, with the needs of their two daughters in the forefront. “We move forward with mutual respect and a shared interest in the health and happiness of our two daughters,” the Murdoch publicist stated. By not taking a position and sharing an interest, the Murdochs did not have to divulge the details that would have helped a judge to make a decision about their lives, and would have kept people entertained for hours. They took matters into their own hands and figured it out with a common goal, and thereby they were able to keep private matters private. Thus, they gave their daughters the best chance of being happy, as they could go through life without knowing, hopefully, what their parents thought of each other. They are left knowing that their welfare guided their parents discussions and kept the matter out of court, and therefore, confidential.

November 25, 2013

Choosing an attorney to represent you in a divorce proceeding at first may sound fairly straightforward. Too often I see this critical step not being given the attention it deserves. Sometimes it is simply a friend, relative or co-worker who refers someone who they felt or heard was good. While everyone means well, I suggest they probably don’t know what your goals and interests are for your divorce. They don’t know if a particular attorney is a good fit for you. Sometimes a client will find the first attorney who tells them what they want to hear. This often is a big red flag. Ultimately, only you will be able to decide who the best fit may be for your circumstances. I hope this three part series of posts on the importance of choosing an attorney, issues to consider when choosing an attorney, and finally some questions to ask a divorce attorney, will provide you with some valuable insights. I believe choosing an attorney is the third most important decision you will make on your journey to get unmarried. Remember in The first post of “Getting Unmarried” the most important decision is deciding to get unmarried in the first place. In Part II, I wrote the second most important decision is to research and decide “How to get unmarried;” essentially deciding on the divorce process that you feel–and hopefully your spouse feels–will accomplish the goals you both want to achieve. The third most important decision I’ll cover in this first of a three part series will be on the importance of choosing an attorney for yourself and equally as important if not more important is who your spouse decides to hire as an attorney. But let’s put first things first. In my way of thinking, you can’t begin to choose an attorney until you first, decide to get unmarried and, secondly, decide what type of divorce process you and your spouse want to use. Provided you have made these first two decisions, let’s make an assumption that both you and your spouse will want an attorney. If you have children from your marriage and or have significant assets and/or liabilities to ultimately allocate between you and your spouse in a property settlement, I strongly encourage everyone with these circumstances to be represented by an attorney. Let me disclose here, I am not an attorney. Too many do it yourself divorce packages often result in repeated appearances in court and end up being significantly more costly to the clients down the road. Leaving it to guesswork or not giving your property settlement the attention it deserves can be costly. Remember your marriage may not last forever but your property settlement will. If you have children let me share this quote by Neil Postman, an American writer and professor, with you. “Children are the living messages we send to a time we will not see.” When children are involved they will be watching closely for the messages you and your spouse send to them about your divorce. They will live and carry those messages throughout their lifetime. For these reasons, give careful and thoughtful consideration to the process you choose for your divorce and the attorneys both you and your spouse end up hiring. In the second part of this series, I outline important issues to consider when choosing an attorney.

November 4, 2013

The following blog was written by Bruce Peck, a Collaborative Attorney. Bruce can be reached at (952) 435-6799 and www.brucepecklaw.com. Some injuries heal as effortlessly as skinned knees on children. Other injuries take longer, and leave scars. Some injuries are so severe they take years, decades or lifetimes to heal, if at all. These are the kind of injuries that happen all too frequently in the realm of divorce. One of the most difficult things to do is to learn how to stop loving someone because they have stopped loving you. Sometimes the best dreams are followed by the worst nightmares. When truth and trust are both violated, the betrayal that can follow is among the most difficult things to heal. While healing is not accomplished by everyone, the possibility of healing is available to everyone. Divorce is a seriously complicated circumstance, because in addition to the loss of the marriage the parties also have to work together, or against each other, to reach a final settlement. When hearts are broken, this can be extraordinarily painful. Falling in love can be awfully simple, but getting divorced is simply awful. If only there was a process that could insulate parties from the damaging experience of a contested divorce. If only children could be protected from the resulting carnage that flows over their parents. If only there was a better chance to heal while going through the divorce process. Well, there is. It is called collaborative divorce, and is promoted by the Collaborative Law Institute. Created here in Minnesota, now taught world-wide, this humane technology, honed over more than two decades through conscientious involvement by attorneys, mental health professionals and financial specialists, has become a highly refined process that supports parties to heal through this challenging time. It starts with the commitment of the Collaborative Law Institute to be and become a healing modality by providing rigorous training to all professionals. The resulting process is a container that insulates parties from the conflict while supporting them to reach principled decisions that become their final decree of dissolution. But it goes well beyond that. Collaborative practice now includes the opportunity for parties take a break before launching into the legal process to assess each party’s readiness to engage in this process. Mental health professionals have become trained in a new paradigm, generally referred to as discernment counseling, which allows parties to talk about where each one is at as they start this process, and consider the possibilities of working on healing their relationship. This process is commonly referred to as reconciliation, which means, literally, healing, not necessarily returning to the marriage. However, when parties are able to heal their relationship they are better able to consider ways in which they might be able to recreate a better marriage. It makes no sense to simply return to a marriage fraught with problems. The primary requirement for such a process to take place requires the commitment of both parties to genuinely exam and explore options before moving forward with the divorce. When parties are unwilling or unable to process through these issues at the end of their marriage, they are left with the prospect of healing by conducting their personal and private autopsy of their marriage, with or without the help of a qualified counselor. This can be quite difficult to accomplish. It requires ethical integrity by each partner to commit to such an undertaking. The collaborative process cannot heal the parties, but it can provide the process by which that possibility might take place. That is no small accomplishment under these circumstances. Sometimes parties that heal their relationship might still decide to move forward with their divorce. When this happens, they are each in a powerful place to facilitate gathering the necessary information and reaching agreements to resolve all the issues. The stress upon each party is significantly reduced and the benefit to children is immeasurable. Usually the overall costs and expenses are reduced due to the ability of the parties to do the work necessary to reach conclusion. It has been said that the Chinese character for crisis is two characters that mean dangerous opportunity. In our western society we are not taught instinctively to look for opportunity, but we know all too well what the dangers are. When we live only in fear we are not very adept at healing. To learn more about this process, and to find professionals trained to provide these services visit us at www.collaborativelaw.org.

October 28, 2013

Part 6: Selecting the right team for your family may be essential to the success of your Collaborative Divorce. Collaborative Divorce is often a team process, in which you work with mental health professionals and financial neutrals, as well as with attorneys, to help you achieve the best outcome for your family. One of the keys to your success is selecting a team that can best meet the unique needs of your family. Some divorcing couples and professionals prefer the standardized process in which the full team is assembled at the beginning of the case. In Minnesota, a full team generally consists of two attorneys, (one for each party); a child specialist (if there are minor children); a financial neutral and a divorce coach. The advantage of assembling a full team (often described as the “Cadillac” of the Collaborative Divorce Process) at the very beginning is that you know that you have all of the necessary professionals on board, so that all of your family needs can be immediately addressed. While you may be concerned about keeping your professional costs down, the full team process, if used efficiently, will not necessarily be more expensive. Working with the right professionals at the right time may actually reduce the conflict and, therefore, your overall costs. Perhaps more importantly, even if it does cost you a little more, getting a better outcome for your family may have incalculable benefits and may save you financial and emotional costs down the road. Other families and professionals prefer what I will call the “customized team” model. In this model you and your spouse work together to decide exactly which team members you need to help address the unique needs of your family. This option allows you to put your dollars where they are most needed. For example, if you believe that you and your spouse need the most help in creating a parenting plan, you may wish to spend more of your money working with a child specialist. Similarly, if your difficulties lie primarily with finances or communication, you may wish to spend more time with a financial neutral or a divorce coach. To learn more about the role of each professional and to get assistance in selecting the right team of professionals for your family, go to www.collaborativelaw.org or www.ousky.com .

October 25, 2013

Part 5: Working with a team of professionals in Collaborative Divorce creates better outcomes. A Collaborative Divorce is one in which the husband and the wife each retain a lawyer for settlement purposes only. In addition, in a Collaborative Divorce, the other professionals on the team, must commit to work or settlement purposes as well. Divorce marks the end of a martial relationship and the beginning of a new life. While divorce is a legal proceeding, future success for your family may have more to do with parenting, financial planning and communication than with legal issues. While lawyers can be helpful on these additional issues, your family can generally get better assistance, at a lower cost, by turning to professionals with more skills in these other areas. If your primary concern is how to co-parent your children in divorce, you are far more likely to gain valuable insights on how to do this by having your family work with a child specialist with the education and training in child development rather than law. If you are concerned about how to meet your expenses in both households, you are likely to get more initial benefit from working with a financial professional than with an attorney. Similarly, if your primary concern relates to difficulties in communicating with your spouse, you may want to work with a divorce coach who has the skills and training to help you focus on these important areas. The Collaborative Divorce process is often a team process in which you work with a team of professionals rather than just with attorneys. You may initially be apprehensive about working with a team of professionals believing that it will increase your cost. However, if you plan your process carefully, working with other professionals can reduce your cost and help you create a better outcome. Generally, the work done by the financial professionals and the mental health professionals replaces much of the work done by the attorneys, allowing you to get more skilled help, generally, at a lower hourly rate. One of the keys to success in working with a team is to make sure that you get the level of professional help that best meets the needs of your unique family. Options in working with your Collaborative Divorce Team will be discussed in an upcoming blog. However, if you want information on this now, go to www.collaborativelaw.org and www.ousky.com. You can read the final part of this series, here.

October 24, 2013

Part 4: Skilled attorneys are essential to a successful Collaborative Divorce. A Collaborative Divorce is one in which the husband and the wife each retain a lawyer for settlement purposes only. When attorneys are required to work for settlement only, it is critical that they have the skill to negotiate successfully without the threat of going to court. Attorneys are generally trained to advocate for clients through use of argument and a variety of legal strategies, including the threat of court. Collaborative Divorce removes those tools from their toolbox, requiring the attorneys to use other, less damaging, conflict resolution methods. While the Collaborative Commitment–the agreement that the attorneys will withdraw if the matter goes to court–is designed to rein in some of these instinctive legal tactics, the withdrawal agreement by itself is not enough. If the attorneys are not skilled in helping clients achieve settlement without the use of arguments or threats, they may fall back on some of these old habits. In those situations, the Collaborative Commitment will not necessarily lead to better outcomes. Collaborative negotiating skill is, in my humble opinion, a rarer and more difficult skill for attorneys than argument and threat. So, how do clients find attorneys who possess this skill? In general, it is a combination of research and intuitive judgment. Through research most clients can find attorneys in their community with training and experience in Collaborative Divorce. In addition, most Collaborative attorneys will provide either free or low cost consultations to allow clients to gauge, first hand, whether they have the commitment and skill required to help them achieve success in a Collaborative Divorce. Finding the most suitable Collaborative attorney is, in many cases, only part of the equation. One of the great advantages of Collaborative Divorce is the ability to work with other professionals who are, in most instances, better suited to help clients achieve the best outcomes, and often at a lower cost. While divorce is a legal process, there are financial, parenting and communication elements that may, in the end, be more important and more complex than the legal elements. Having financial professionals and mental health professionals on the team that help clients achieve success in these areas, could be the most important factor in helping them achieve a better outcome. This information will be discussed in the upcoming blogs. However, if you want information on this now, go to www.collaborativelaw.org and www.ousky.com. Read Part 5, here.

October 23, 2013

Part 3: Collaborative Divorce helps create better outcomes by requiring commitment at the beginning of the process. A Collaborative Divorce is one in which the husband and the wife each retain a lawyer for settlement purposes only. One of the reasons that the process works well is that it causes both parties to make the necessary commitment early in the process. Almost all divorce cases, (approximately 95%) settle out of court. However, too often the settlement comes after the parties are near the point of financial and emotional exhaustion, sometimes creating flawed settlements and resentment. Many people reach a point of committing to a settlement only when they are nearly out of money, or they are told by their attorneys or the judge that moving forward will not be successful. These reluctant settlements, while better than a trial, come at too great of a price and can lead to a rocky future for the family. In a Collaborative Divorce, both parties and their attorneys sign a Participation Agreement at the beginning of the process that challenges clients to focus on commitment to settlement before they are financially and emotionally drained. Because both parties are asked to engage their attorneys for settlement purposes only, they are forced to think about their commitment to settlement at the very beginning of the case, and not “on the courthouse steps.” Both clients understand that each of them must make a commitment at the beginning of the process. Early commitment from each party leads to better settlements that are made before financial and emotional resources are fully exhausted. Early and deep client commitment is a big part of why people often get better outcomes in a Collaborative Divorce, since skilled Collaborative Professionals can help them commit, not only to settlement, but to other important matters, such as improving skills in the areas of parenting, communication or financial acumen. However, this is only a part of the equation. In order to be successful, committed clients need to be guided by professionals that are skilled in helping them achieve the best outcomes in this new environment. This information will be discussed in the upcoming blog. However, if you want information on this now, go to www.collaborativelaw.org or www.ousky.com. Read on to Part 4 by clicking here

October 22, 2013

Part 2: Having lawyers that are fully committed to settlement creates better outcomes. A Collaborative Divorce is one in which the husband and the wife each retain a lawyer for settlement purposes only. Hiring a lawyer for this defined purpose has some risk. The success of Collaborative Divorce is based on the fact that, in most cases, the benefits far outweigh the risks. In order to understand why this is true, let’s look at the basic risks and benefits. Risk: At the beginning of the case, both parties and their lawyers sign a Collaborative Commitment stating that the lawyers must withdraw if either spouse decides to fight in court. Therefore, the Collaborative Commitment creates a risk that you will need to switch attorneys during the divorce process. Indeed, that is the very idea behind the commitment. How significant is the risk? In my experience of around 500 Collaborative Cases, the parties have had to switch attorneys approximately 5% of the time. By comparison, in my experience practicing in the traditional model (cases where the lawyers can go to court), the parties switched attorneys, or the attorneys withdrew from representation for other reasons, almost 5% of the time. So, in reality, the risk that clients need to switch attorneys by starting in the Collaborative Process may not be significantly greater than in a non-Collaborative case. Benefits: The most significant benefit from the Collaborative Commitment is that the attorneys are free to focus all of their attention on more creative settlements. Removing, or at least significantly diminishing, the threat of court, opens the door to interest-based negotiation. Instead of using argument, accusation and threats of court, which are taken off the table, the attorneys advocate for their clients by using creativity, empathy and the development of shared goals. What clients seem to want, in almost all instances, is a form of advocacy (meaning protection of true interests), without creating animosity. In traditional practice, I sometimes felt like a bull in a china shop, unable to go in and help my client get what he or she truly needed, without risking damage to fragile, but important, things like the ability to co-parent and communicate effectively. Collaborative Divorce, by removing court as an immediate threat, allows me work to help my clients with far less risk to the relationship and other intangible goals. Of course, the success of Collaborative Divorce can depend on more than just the Collaborative Commitment. Specifically, the best outcomes in Collaborative Divorce are achieved with a) a high level of commitment by the clients and 2) the skill of the professionals. The keys to success in those areas will be discussed in the next two blogs in this series. For immediate information in these areas go to www.collaborativelaw.org or www.divorcechoice.com. Check out Part 3 of this series, here.