The collaborative divorce process can help you achieve your divorce goals. The following article, originally featured in Park Cities People, explains why collaborative divorce is the right tool for the job.
If you are contemplating or facing divorce, do you have any of the following goals:
Divorce has significant effects on your taxes. For example, if your divorce is final by December 31 of a tax year, the IRS will consider you unmarried for that entire year, so you must file individual rather than joint tax returns. Moreover, due to new tax legislation, alimony is no longer deductible for the person paying and it not taxable to the recipient. It’s possible to go back and change a prior decree to make alimony no longer tax deductible, but changing a divorce decree is easier if you used the collaborative process to handle your divorce in the first place. There are several tax issues to consider when getting a divorce, including how to handle the sale of your home, sharing retirement accounts, deciding who will claim children as dependents, selecting the proper filing status for the year of your divorce, and handling alimony.
Getting a divorce often requires selling the family home because neither spouse can afford to keep it. You may have to pay capital gains tax on any profit unless you used the house as your main residence for two of the prior five years and have not excluded capital gains from the sale of another home within the prior two years. If you meet these criteria, each spouse can exclude $250,000 in capital gains on their home from any tax. Getting an agreement about how to handle the sale of a family home is much easier if you used the collaborative divorce process rather than adversarial litigation.
It’s possible to divorce in a way that supports the well-being of everyone. You can end the conflict, heal the hurt and part as friends. You just need to learn how.
Unfortunately, most divorces are handled in a very different way. Sides are drawn and issues become something to fight over rather than something to resolve. Walls of protection get fortified and distance grows. Then we bring in adversarial attorneys and escalate the conflict dramatically. We hurt each other over and over, feeling fully justified for everything we do. Serious damage is created in the process of divorce, and none of it is necessary.
When you enter into a Collaborative Law negotiation, you have a lawyer advocating on your behalf, and there’s another lawyer advocating on the other party’s behalf. Meetings involve you, the other party, and the respective lawyers, and the goal is to settle any outstanding issues outside of a courtroom setting.
In the Collaborative Law process, the lawyers involved cannot go to court and litigate against each other or the parties. This accomplishes several things crucial to developing a solution:
If you visit the Collaborative Law Institute of Texas’ website, you might notice that when looking up our members, mental health professionals are listed as well as lawyers. That portion of our member roster highlights something important about the collaborative law process: It’s a process that has each participant’s long-term well-being in concern.
In divorce cases involving children, the parties involved typically don’t stop interacting once the divorce is finalized, and the divorce doesn’t necessarily resolve the great number of emotions that can result from two people coming to the realization that they can no longer be a married couple.
Since Collaborative Law came to Texas in 2000, more and more people have heard about it and have used the process to resolve family law matters. As more lawyers, mental health professions and financial professionals have become involved in Collaborative Law, they are telling more and more potential clients about the new option that is available. People are also hearing about it from friends and discovering it on the Internet and occasionally in the news media. Because Collaborative Law is such a new approach, many potential participants naturally have a lot of questions about it. This blog will answer many of those questions over time.
We will begin with a fundamental question most people ask: “Am I a good candidate for Collaborative Law?”
Confronting the loss of the family system can be very difficult for children coping with divorce. Caring adults in these children’s lives may feel overwhelmed and helpless when faced with divorce and may feel unskilled in assisting children navigate this confusing time. These adults may want to help, but have no idea what to do.
Being Supportive
One of the things we emphasize most in explaining Collaborative Law is that it’s different from the traditional divorce process, which utilizes litigation. Here are some of what we call “process descriptors,” which help establish the difference between litigation and Collaboration.
In litigation:
This is the official new blog for the Collaborative Law Institute of Texas.
As part of our ongoing efforts to educate people about the Collaborative Law process – including the recent debut of the new Collaborative Law Institute of Texas website — we’re launching this blog. It will feature articles from Collaborative Law Institute of Texas professionals, answers to some common (and not-so-common) questions about the Collaborative Law process, and news from across the state, nation, and even world as it relates to Collaborative Law.
Many clients think they are savvy negotiators, but they often fail to understand how their behaviors and attitudes towards each other throughout any divorce process effects the end result. What you and I see as common-sense negotiation tactics, are anything but that to our highly agitated divorce clients.
We have all seen the Wife make digs at the unfaithful husband continuously throughout the divorce case. While such disparagement likely makes the wife feel a bit satisfied for a few moments, she rarely understands the long-term consequences of such comments.
To infinity, and beyond…
Well not quite. But when you are going through a divorce, it can feel as if the process will never end, especially if you’ve chosen litigation. During a litigated divorce, it’s not uncommon for spouses to have so much trouble communicating about divorce, money, and children, they end up speaking only through their attorneys. Sound familiar? I’m sure your friends have told you the horror stories. It soon becomes easy for information, as well as intentions, to be misinterpreted. Delays become commonplace, and the more time you ask of your attorney the more expensive the divorce becomes for both you and your spouse. And to make matters worse, speaking through attorneys is not a great set-up for post-divorce communication.
When you are facing a life changing decision like divorce, what do you think you will find more valuable: Someone to make you feel better by saying that nothing has to change, or someone who will give it to you straight, no chaser? I feel strongly that not enough people in the world of divorce professionals will truly tell it like it is. They tell you want you to hear which can lead you to make some HUGE mistakes. Easily avoidable mistakes…Mistakes that need not happen!
I tell it like it is. Your household income as a couple will now be supporting two households, so yes, things will change. Let me guide you through that change with some simple points. Basically, let me help you not make HUGE mistakes!
Divorce can be a time in our lives when we not only have our usual day-to-day life, but we now have also added, willingly or not, a substantial number of responsibilities and requirements on top of this already heavy load. We worry about the impact on our finances, family, and relationships. We struggle with the added commitments and the once shared responsibilities that are now solidly on our lap. Feeling in genuine control can give us a sense of calm and peace, but how can we achieve this when we’re going through a transition that is so unknown and is one that often instills fear, uncertainty, and other unpleasant emotions? A Collaborative Divorce allows you to control what you are able to control while holding the reins alongside a respected, trusted team that has the training and skills to educate. This enables you to have the biggest impact on of one of life’s biggest transitions.
You are one of the two most knowledgeable people when it comes to your family, finances, hopes, desires, and history. Even so, no one knows everything, and we cannot be an expert on a transition we’ve never experienced or on a responsibility that our spouse has historically handled. We all have times in our lives when we need to ask for help; divorce is one of those times. With an educated, experienced team that you trust and respect, you put yourself and your spouse in control of the timeline, process, and outcome.
According to the statute, we get into collaborative by signing a participation agreement. If you’re not working under the family law statute, you’re just signing a contract to enroll you into the process in a case such as a probate matter or a civil litigation dispute. The statute says collaborative means you have dedicated settlement counsel and must have two lawyers. We sign a participation agreement that says the collaborative lawyers will not be litigation counsel if this opts out of collaborative. By requirement of the statue, they will have to change lawyers and it cannot be a lawyer in the same firm. This exists in the collaborative process because we typically meet and ask the clients to state their true interests, concerns, goals, and to be honest.
We should not be able to use that against them in a litigation setting later. As an example, let’s say I represent Susie and she’s getting a divorce from Joe Bob. In the collaborative setting we meet with Joe Bob, Susie, myself, Jo Bob’s lawyer, and typically a neutral mental health professional and a neutral financial professional. We meet either in person or on zoom and we’re going to ask Susie and Joe Bob to tell us their goals.
As we get firmly settled into this new Millennium, one trend has firmly settled in with us: Baby Boomers divorcing at double the rate from the late 20th Century. As our life expectancies continue to increase, our attitudes about divorce continue to evolve. And while it’s not still rapidly increasing, Boomer divorce is likely here to stay. So is the sad fact that divorce after age 50 can be financially devastating, especially if you’re close to a planned retirement.
You set aside a comfortable retirement nest egg that calculated golden years spent together as one. Now those same funds will have to support not one, but two households. Experts estimate that expenses after divorce are anywhere from 30-50% more than if you stay together. That comfortable nest egg must now fund two of everything: Two homes, two cars, separate vacations, separate trips to see the grandkids, etc. This duplication can eat into a retirement fund at an alarming rate.
Divorce is stressful and creates a variety of emotions. It takes time for everyone to adjust to their new normal and for children to acclimate living in two homes instead of one. I often tell parents, adults choose to divorce, children do not, it’s not their decision to make, yet the divorce still happens to them. Children live the schedule and must adjust to two homes, multitasking their belongings, schoolwork and learning a new way of life without seeing both parents every day.
Children and teens adjust to their new realty with resiliency and grace when they have an age-appropriate amount of information, feel heard and validated and have an opportunity to have their questions answered before and during the divorce process. When parents can avoid these 5 mistakes, children and teens will have less stress, worry, and adjust more quickly.
For most people, the divorce process is emotionally draining and mentally exhausting. Many people describe it as a time of being frozen, numb, or moving in slow motions. Despite that emotional and mental trauma, you will be expected to go through your finances with a fine-tooth comb to ensure that your settlement agreement is fair and equitable. With divorce brain, that’s easier said than done!
Even if you feel like you are clear headed, here are a few of the most common money mistakes to look out for when getting divorced.
I have been providing business valuations, characterization analysis and financial services for divorcing couples for over thirty years in Central Texas. I often tell clients considering a divorce that I believe the Collaborative process is the better of the bad, when compared to going through the challenges of a litigated divorce. There are many benefits for couples working toward their new normal when using the Collaborative divorce process.
The first part on the Collaborative divorce roadmap is gathering information. The part of gathering information I will focus on here is encouraging the clients to practice transparency and assuring that the attorneys, mental health professionals, financial professionals and the clients all do our best to cover all the bases. This is easier said than done sometimes.
The role of custody evaluations in a divorce is to determine what is in the best interest of the children. A child custody evaluator will gather information from interviews with the family and also by gathering documentation, from the parties as well as other “collaterals” such as neighbors, teachers, therapists, etc. The evaluation will then decide what is the children’s best interest going forward.
A custody evaluation doesn’t happen in every divorce, but it can be court-ordered, or it can be requested and mutually agreed upon by the parents. Usually, if a party requests a custody evaluation, the court will order both parties to undergo a psychological evaluation to aid in conducting the child custody evaluation.
In March of this year at the State Bar of Texas Annual Collaborative Law Conference I delivered the closing speech. This was the third time in a row I was asked to be the last speaker at the Conference. In 2020 I talked about The Power of Hope. In 2021 I spoke on Love in Time of COVID. In 2022 I spoke on The Love of the Game. I replayed videos of my interviews with divorced couples, divorce attorneys, and professionals in mental health and finance as to what they each loved about the collaborative divorce process.
When I was a baby lawyer back in the 1900s, I was trained to zealously fight to win victory for my clients in court. I wanted to litigate, show my courtroom skills and to get justice for the husbands, fathers, wives, and mothers I represented. There is an important role litigation lawyers, including me, have in resolving disputes between others. I am proud of the many trial lawyers at Gray Reed and my countless friends in Houston and around the State of Texas who dedicatedly, professionally, and honorably serve their clients.
