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 “troubleshoot 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 issues such 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 rather than using the law to win, they are more focused on making sure their clients understand the legal issues involved and how a court might view them. 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 arm’s-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:
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.
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.
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.
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.
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.
Collaborative divorce is not for everyone. Sometimes distrust between the parties has become so intense that litigation is the only way out. However, many divorcing spouses have found that a collaborative process can reduce tensions and cost and provide a result satisfactory to both parties. Attorneys can benefit from numerous services provided by financial professionals in litigated and collaborative divorce matters. At Mercer Capital, we have two professionals who are trained in the Collaborative Practice and provide assistance to attorneys in collaborative and litigated divorce matters. Please contact us if we can be of assistance to you and your clients.
Originally published in Mercer Capital’s Tennessee Family Law Newsletter, First Quarter 2019.