Is collaborative divorce right for you?

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.

The basics

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.

Several advantages

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.

  • Save costs by sharing financial experts instead of hiring competing experts

  • Collaborative practices form a model for post-divorce communication

  • Risks of one-sided outcomes are minimized and parties more likely to comply

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.

Collaborative divorce minimizes many risks inherent in traditional litigation and . However, the lack of court involvement may preclude formal discovery of financial information, which can lead to incomplete or inaccurate disclosure.

Though collaborative divorce offers numerous benefits, it isn’t a realistic option for everyone. It works best when the participants are open, honest, committed to settlement, and willing to compromise.

Potential pitfalls

Despite several advantages over traditional court proceedings, collaborative divorce is not a perfect alternative. Some drawbacks to the collaborative divorce process include:

  • Failed collaboration means both parties have to find new attorneys

  • Agreements on inadmissibility of negotiations may be overruled by the court

  • Lack of formal discovery and court deadlines may result in incomplete and delayed information

If a stalemate occurs or either party seeks a legal injunction, the divorce process restarts and both attorneys are disqualified from representing either party. Not only must both spouses find, educate and pay for new counsel, but also they must hire additional financial experts and fund court costs separately.

If the parties end up in court, information shared during collaborative negotiations may come back to haunt them. Even though collaborating spouses often stipulate that all financial documents, correspondence, draft settlement proposals, and expert witness reports generated during four-way conferences are inadmissible in future litigation, courts have been known to overrule these agreements.

Since court is only a peripheral consideration during the collaborative divorce process, customary procedural practices in divorce may not be followed as strictly. The lack of court involvement can preclude formal discovery of financial information, potentially leading to incomplete or inaccurate disclosures. Also, allowing parties to negotiate without formal court-imposed deadlines can sometimes prolong the settlement process.

Collaborate or not?

Though collaborative divorce offers numerous benefits, it is not a realistic option for everyone. It works best when the parties and their attorneys are open, honest, committed to settlement, and willing to compromise. Before selecting this alternative path to divorce, consult an impartial neutral expert who’s experienced in collaborative divorce proceedings. They can identify your divorce’s potential for success using a collaborative process.
© 2018 (rev. 2020)

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