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Collaborative divorce can reduce tension and cost

10/19/2016  |  By: Scott Womack, ASA, MAFF, Shareholder, Business Valuation/Litigation Support

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With the holidays coming up, divorce filings tend to drop off as unhappy couples, particularly those with children, try to put the best face on things until the new year begins. Fortunately, though, when January arrives many are finding that there is another way to make the best of a bad situation by taking a collaborative approach to splitting up.

In traditional divorces, each spouse engages a lawyer who fights hard to “win.” Their weapons can include bringing in their own financial professional to value financial assets. Naturally the neutrality of those valuations may be suspect in the other party’s eyes, even if the valuator follows all proper procedures.

In collaborative divorce, each spouse still hires a lawyer, but the goal is to reach a settlement that satisfies each party. Neutral consultants, such as financial and mental health professionals, are also frequently involved. The model is “trouble shoot and problem-solve” rather than “fight and win.”

The collaboration is carried out through a series of meetings in which the couples and their attorneys negotiate over such issues as property division, alimony, child support and custody. The meetings are quarterbacked by the mental health professional, who prioritizes the goals for each session, monitors the emotional climate, and keeps things on track.

The attorneys each are responsible to look out for the interests of their clients, but they are more focused on making sure their clients understand the legal issues involved and how a court might view them than using the law to win.

The role of the financial professional, who is paid by both parties, is to provide an objective assessment of the financial issues involved. If one of the spouses has a business, the financial neutral provides an arms-length valuation and can also serve to educate the other spouse about the business, if needed. After several meetings, the financial neutral produces a marital balance sheet, laying out the couple’s financial landscape.

While collaborative divorce is not for everyone, in the right settings it can have these advantages:

  • A quicker resolution. Divorces litigated through the court system can often take a year or more to reach a conclusion. The collaborative process can move faster because there is no waiting for motions to be filed and hearings to be held.
  • Lower expense. Attorneys likely will have fewer billable hours since there is less engagement with the courts. There is only one financial consultant rather than two. In addition, because litigated cases tend to take more time, there may be a need for revised valuations as economic conditions change while the divorce makes its way through the process.
  • Less acrimony. While there certainly can be tension between the two spouses during the collaborative process, the temperature tends to be lower when the working model is problem-solving rather than fighting. The addition of a mental health professional to the team also can serve to defuse tensions. And the neutrality of the financial professional can serve to reduce distrust.
  • More control. When divorce cases reach the courtroom, subjective judgments by the judge can come into play. While Tennessee law spells out guidelines for judges in divorces, they still have latitude.
  • More privacy. Divorce settlements litigated through the courts become public record. Settlements that result from the collaborative process do not. This can be of particular importance when one or both spouses are high-profile.

As mentioned before, collaborative divorce is not for everyone. Sometimes distrust between the parties has become so intense that litigation is the only way out. But many divorcing spouses have found that a collaborative process can reduce tensions and cost, and provide a result satisfactory to both parties.

Scott Womack is a shareholder and Family Law practice leader in the LBMC Business Valuation/Litigation Support division and is a member of the Middle Tennessee Collaborative Alliance. He may be contacted at swomack@lbmc.com or 615-309-2301.

Collaborative divorce can reduce tension and cost

Publication

The Tennessean