Peaceful Parting: Information on Collaborative Divorce
While she was traveling, Marilyn’s husband, Jeff, cancelled her credit cards. He also filed child endangerment charges against her. When she returned, authorities put her in a mental healthcare facility to protect her child. Marilyn was not insane, nor was she a danger to her child. Jeff was filing for divorce, and was legally positioning himself for control of their finances and custody of their young child.
Like Jeff and Marilyn, many people facing divorce are fearful, distrustful and want to lash out at each other. Traditional divorce methods are not designed to dispel these emotions. They are, in fact, intended to be adversarial. Litigated divorces can foster emotional pain long after the divorce. Conversely, the collaborative divorce method fosters open, honest communication. President-elect of the Collaborative Law
Collaborative Law Institute of Texas (CLI-Tx) and Austin family law attorney, Jennifer Tull, compares the emotional aspects of a divorce to a family death.
“No one can go through a divorce without feeling something. It is an emotional event. But the emotional effect of the divorce on someone using the collaborative law model might be what you would feel if your Dad died of old age. After litigation, the emotional effect could be what you might feel if he had died because you ran over him with the car. It’s a much more damaging experience.” she says. “By its very nature, litigation pits people against each other in a way that ruins relationships. If spouses didn’t have bad feelings about each other before they got into the adversarial process, they certainly will after.”
Collaborative law is based on three principles:
- A pledge by attorneys and spouses not to go to court
- An honest exchange of information by both spouses and all professionals
- Negotiations based on the highest priorities of both spouses and children
Tull says collaborative law enables couples to create unique settlements tailored to their family needs. This is in contrast to a divorce granted by a judge after a trial. “In the court- house, the judge has a set of rules that must be strictly followed plus other guidelines that are routinely followed in every case,” she says. “The judge knows he or she cannot be reversed for using the statutory guidelines. Therefore, after a trial, couples are stuck with ‘one size fits all’ judicial decisions. In contrast, during the collaborative law process, couples can customize the provisions to fit their particular circumstances.”
Developed in 1998 by Minnesota Family Law Attorney Stuart Webb, collaborative law has spread to England, Ireland, Austria, Switzerland, Canada, and many states in the United States. In 2001, Texas was the first state to enact a statute recognizing collaborative law. This statute made a huge difference for Texas collaborative divorces. Now every divorce attorney can provide a non-adversarial option to clients without interference from the courts.
What Are Your Choices?
Trial divorces are rarely amicable. In a trial, attorneys present their case to a judge with convincing arguments in favor of their clients. Preparing for the trial includes understanding the client’s history, gathering information and documents, interpreting the data, figuring out how it can be used to the advantage or disadvantage of the client, and preparing the trial presentation tailored to the particular judge. This preparation takes time and lawyers bill by the hour. Add to this the possible cost of expert witnesses and the trial can be very expensive, both emotionally and financially. The judge will make decisions under the limitations of the law.
Mediators are neutral parties who facilitate an agreement between the spouses. The mediator does not make decisions. The couple may bring their attorneys or mediate without them. Mediation can be voluntary or forced. In some Texas counties, Judges require couples to attempt to resolve their differences in mediation. If mediation fails, the couple has to go to court. Most mediation occurs in the middle or toward the end of the divorce process. By this time, the couple has spent a lot of money and emotion preparing for trial.
According to Larry Hance, Dallas family law attorney and president of CLI-Tx, collaborative law is 100 percent voluntary. You cannot be in it unless you agree to it. There is no neutral facilitator. The focus is on the couple’s interests and goals as opposed to what might be the legal outcome in the court- house. A court trial is not an option for attorneys in collaborative cases because, by agreement, they cannot take the case to trial. This is an effective financial impediment to resorting to a trial. Very few collaborative cases end in court.
A typical collaborative case begins when one client hires a collaborative attorney. That client approaches his/her spouse suggesting the collaborative method. Once the spouse hires his/her own collaborative attorney, the couple and their attorneys begin a series of four-way meetings. In these meetings they all discuss the issues, concerns and alternatives of their individual situation. Neutral experts can be invited to attend the meetings to help the couple move toward settlement. When the couple reaches a mutually agreeable settlement, the attorneys draft the divorce decree and present it to the judge, who rarely makes changes to the document.
When she left the mental healthcare facility, Marilyn was furious with Jeff. She wanted revenge. Marilyn immediately hired Norma Levine Trusch, a Houston family law attorney. Norma explained collaborative law to Marilyn not because she thought it would work in this case, but because she had vowed to offer it to every client. To Norma‚Äôs surprise, Marilyn thought it might work for her and Jeff. First they had to talk Jeff into it.
“There is a huge amount of research showing the most important thing for children of divorce is how their parents get along with each other after the divorce,” cites Hance. “The children can have a crazy schedule, but if parents get along, the children will be fine. Children of an agreeable divorce have a much better chance of being healthy and contributing people in society without emotional and physical health problems.”
Divorce by mutual agreement means less litigation after divorce. This translates into a decreased burden on the Texas court systems, leaving more time for the courts to deal with problems like child abuse and juvenile crime.
Americans lack basic money-management skills, which promotes high consumer debt, low savings rate and bankruptcy. Divorce is a leading cause of bankruptcy. While there is no empirical study proving collaborative divorce can save money for the family, informal surveys have supported this possibility. For example, when the divorce is going to trial, each spouse hires a CPA to value the family business. Both CPAs need to prepare to defend their work during the trial. In a collaborative case, the couple hires one neutral CPA who doesn’t need to prepare for trial. Also, the couple can see what the collaborative attorneys are doing during their billable hours. Most of the attorneys’ time is spent in meetings with the couple to reach an agreeable settlement. In a litigated divorce, both attorneys have to perform a number of standard procedures. Rarely does the client see the benefit of these procedures. When spouses have the focused laser approach in collaborative law instead of the shotgun approach of litigation, they can retain more savings to use toward financial goals.
Collaborative practice has the potential to spread to other legal specialties. Civil and commercial attorneys are looking into adopting collaborative law. Probate law is another opportunity for change. Resolving conflict among heirs can be similar to resolving conflicts in couples. Both involve highly-charged emotions.
What Kind of Client is Suitable?
Norma noticed that Jeff had hired an attorney in her collaborative law practice group. She called that attorney and asked if he thought they could do this case collaboratively. Jeff’s attorney was hesitant. The situation didn’t suggest success, but the two attorneys decided to give it a try. Jeff agreed.
The more sophisticated the client, the faster he/she sees the value of the collaborative process. Attorneys are more efficient because they don’t have to prepare the case for a trial, even though around 5 percent of Texas divorce cases actually end in trial. Clients like their attorneys to be focused on settling their divorce. They feel it is a better use of their money
To benefit in the collaborative process, the client needs to have the ability to think rationally According to Hance, “Everybody in a divorce is irrational to a certain extent With therapeutic help, they can become rational. The people who are not suitable are those who have a true inability to ever think rationally” Where there has been family violence, the answer is not as clear. In a litigated divorce, the perpetrator can hire a tough lawyer and intimidate the victim spouse. In collaborative cases, the victim spouse can speak up while safely in the presence of attorneys.
Couples like the control they have over the divorce. Privacy and confidentiality are also a big plus. In litigated divorce cases, spouses have to be on a witness stand in court. They say things that can never be erased. Every word in the trial is public record. Clients think they will get their day in court where they can describe how awful their spouse has been. But that is not how it works. Once on the witness stand, the individual does not have the power to speak up at will. They are limited to answering questions. The opposing attorney can ask embarrassing questions that must be answered.
Individuals in collaborative cases also understand the value of having a good relationship with their spouse and in-laws subsequent to the divorce. There will be weddings, holidays and ceremonies to attend as an extended family unit. Some fathers choose the collaborative process over litigation because they want to dance with their daughter at her wedding.
The divorce coach is a new professional trend used to help the individuals navigate their emotions while resolving the legal issues in a non-adversarial way. In a neutral role, they help clients maintain focus on settling their disputes with the least cost to the family members. Coaching concentrates on where the spouses are now and what they are willing to do to get where they want to be at the end of the divorce process.
The more sophisticated the client, the faster he/she sees the value of the collaborative process.
When a spouse is keeping silent during meetings, the coach can get them to talk. If someone walks out on negotiations, the coach identifies the problem, helps that person to deal with the emotions and return to the meeting. When issues surrounding children seem to have no solution, the coach helps resolve them. The coach keeps things moving along when they would otherwise be at a standstill.
Divorce coaches are mental health professionals in a new role. They are like baseball coaches who assess strengths and weaknesses, analyze skills and teach players how to develop new skills. The baseball coach motivates the players to work together as a team to reach the common goal of a winning season. The divorce coach prepares the spouses for a big game – the upcoming four-way meeting. Sometimes an individual will be asked to make personal sacrifices for the good of the family (or team). An effective coach helps the person see the value in doing so.
Marilyn and Jeff agreed on at least one thing. They did not want to waste their money on court. They wanted to save it for their child’s college education. With the help of a neutral financial expert, they designed a financial settlement that worked for both of them while funding the education costs. And, with the assistance of a collaborative child specialist, they were able to work out the details of custody and visitation.
The financial expert is most often a certified public accountant (CPA), certified financial planner (CFP) or both. In addition to a CPA or CFP, the financial advisor usually is a certified divorce financial analyst (CDFA). Norma Trusch, president of the International Academy of Collaborative Professionals (IACP) emphasizes the importance of communication. “The financial professionals need to have a clear understanding of their role. They need to maintain complete communication with the attorneys and the clients.” She encourages financial experts to have training in effective, neutral communication techniques. Specific training in collaborative family law techniques is also a definite plus. CPAs need to have the ability to understand what is neutral in terms of their work and the knack of communicating effectively and frequently with both attorneys and both spouses. Any appearance of favoritism can derail the entire process. This can be a challenge when divorce financial experts are accustomed to advocating for their client to be awarded the largest share of the marital property.
Larry Cook, CPA-Houston, describes the levels of his firm’s services as analogous to public accounting engagements such as agreed-upon services, compilation, review, and audit. His collaborative services can be described as the following:
- For specific services other than or in addition to settlement scenarios: Specified services are agreed-upon services on an as-needed basis. They might include a business valuation, spending plans, income tax analysis, divorce decree review, or other non-settlement scenario services.
- For services providing settlement scenarios and including assistance in gathering data, meetings with clients and their attorneys and developing a level of verification: Illustration uses information from the client without independent verification or documentation. Abridged includes analyzing the couple’s estate but not verifying items or values unless items are material and/or at issue. Comprehensive involves assembling, verifing and valuing the couples’ financial marital estate.
Jan Demetri, CPA-Austin, helps collaborative clients identify prior spending patterns and deal with the potential changes in financial position following divorce. “Regardless of the level of financial sophistication, many clients are surprised at how much they actually spend. They often grossly underestimate their living expenses.” This detailed analysis of financial needs can have a major impact on settlement discussions. In some cases, this is the first time clients have paid attention to budgeting, saving, insurance, and financial goal setting.
Will Collaborative Law Come to Your Town?
Many new trends and social changes begin in big cities. Collaborative family law is growing rapidly in Dallas, Houston and Austin. The collaborative process will come to communities where the professionals encourage it. Attorneys will offer this alternative when clients request it.
CPAs are in an influential position to facilitate a positive social change in divorce by discussing the collaborative process with clients, colleagues and attorneys.
At Marilyn and Jeff’s last collaborative law meeting, they signed all of the final documents and picked out a date to go to court together to get their divorce finalized. Afterwards, Norma and Jeff were briefly alone in the room. As Norma was packing up her briefcase, Jeff looked up at her. With tears welling up in his eyes, be whispered, “Thank you for saving our family.”
About Tracy Stewart
Tracy Stewart, CPA is your financial expert for advice, guidance and support through many seasons of life. Whether it's navigating the choppy waters of divorce, reacting to a transition from a relatively healthy active adult to an adult with a serious illness, or running a forensic analysis of your finances to build a detailed picture of separate assets, I can help you come up with a plan for the needs of today — and the goals of tomorrow.
This article originally appeared in Today’s CPA and is reprinted here with permission from the Texas Society of Certified Public Accountants.