The concept of “collaborative divorce” was introduced in the 1990s, and it’s been gaining momentum ever since. The allure is for an alternative to the traditionally adversarial divorce process that is creative and cost-effective.
Collaborating spouses sign a contract agreeing to amicably settle their divorce out of court, promising to openly and honestly exchange all relevant financial information and to negotiate in good faith. Instead of the traditional litigation model, the parties conduct a series of “four-way conferences” between husband, wife and their respective attorneys. Between conferences, the parties gather information, regulate emotions, and evaluate settlement proposals.
Although both sides retain separate attorneys, neither party can seek or threaten court action during the collaborative process. If they do, the process stops and the attorneys do not represent either party during court proceedings.
Role of financial experts
Financial experts participate in the collaborative process to keep the parties focused on financial issues, despite emotional issues that exist in the process. Financial experts can evaluate alimony and child support options, discuss marital property and debt allocations, and may even value private business interests.
Instead of advocating for one side or the other, financial experts in collaborative divorce encourage value-based discussions and settlements that “expand the pie” before divvying it up. They also facilitate settlement with creative financial solutions to complex personal and financial issues that incorporate both parties’ needs and priorities.
Compared to traditional divorce proceedings, collaborative divorces generally settle faster and at a fraction of the cost. In collaborative divorce all legal fees and financial expert expenses are paid from the couple’s community property.
Collaborating spouses save costs by sharing one neutral financial advisor or valuation professional, rather than hiring separate dueling experts to battle in the courtroom. Jointly retained experts are desirable when the marital estate contains closely held business interests as it reduces the time spent communicating with two experts and prevents adversarial experts from intrusive questions or practices that may damage business operations or unsettle employees.
Other collaborative practices, such as four-way negotiations, promote ongoing communication after the divorce. This rapport is critical for co-parenting and ongoing financial connections such as child support, other shared children expenses, and spousal support payments. Attending children’s events and facilitating relationships between now separated extended families is improved with the spirit of communication. Even after child support ends, college tuition, living expenses, or other asset distributions to adult children are easier when parents communicate better after the divorce.
In addition, collaborative divorce minimizes many risks inherent in traditional litigation and mediation. Courts and mediators sometimes mandate one-sided settlements as their timely resolution solution, but collaborating spouses mutually decide the final outcome. Divorcing parties are much more likely to comply with self-imposed settlement agreements than mandates of any sort.