Determining Spousal Financial Support

This example case illustrates how the considerate aspect of Collaborative Divorce works in determining spousal financial support.

Kim and Paul – Spousal Support

Kim, 62, and Paul, 61, were married for 40 years. They had three children – all grown and independent.

After being married at 22 and 21 respectively, Paul maintained the primary income. Kim stopped working full-time and instead worked at various part-time office jobs while also being the primary caregiver of the children. Once the children were grown, Kim began feeling unneeded. She started to learn about various health care options – eventually completing her training as a nutritionist A couple of years later she decided that she wanted more independence and chose to separate from Paul.

Kim’s practice as a nutritionist was very rewarding to her, but it did not bring in a lot of money. She hoped she could eventually earn about $35,000 per year. Paul was earning $95,000 a year.

When Paul first met with his attorney, he was devastated. He believed his marriage to Kim would last forever. Now he faced the prospect of paying spousal support to Kim instead of preparing to enjoy their retirement together. Paul decided to meet with a Divorce Coach so he could come to terms with this disappointment and anger. This was an excellent decision because Paul ended up reaching a point of acceptance much more quickly, and did not waste a lot of money fighting the inevitable.

Kim retained a Collaboratively trained lawyer as well, and engaged the services of her own Divorce Coach. Four-way meetings between Paul, Kim and their attorneys were held. They signed the Participation Agreement and agreed to negotiate together, instead of going to Court. They then met with a Financial Advisor. The advisor gathered information on the couples’ income, reviewed their assets and debts, and worked with Kim and Paul on their budgets.

At the next four-way meeting Kim expressed feeling guilty about her decision to separate and did not want to be unkind to Paul. With the help of his Divorce Coach, Paul came to the conclusion that he would be better able to accept the separation if he was able to make a clean break with Kim. As a result, after a couple of four-way meetings, they were able to reach a mutually beneficial agreement: Paul would pay a lump sum to Kim, but would not pay her monthly payments. Kim was content with the arrangement because she would not have to pay taxes on the lump sum and she would be able to achieve the independence she desired. Paul was happy to have a clean break so he could start to reconstruct his life. It was very unlikely the court would have ordered a lump sum payment – even if it was best for both parties. Using a collaborative process, everyone benefited with a resolution that was more creative than what a Court would have ordered. The Divorce Coaches and the Financial Advisor also kept the costs to a minimum.

A draft Separation Agreement was prepared for everyone to consider and after a few small changes, it was signed. A great resolution was achieved efficiently and cost-effectively.