This example case illustrates how hte sensible aspect of Collaborative Divorce helps in dividing marital assets.
Kevin and Jackie – Property Issues
Kevin and Jackie were married for 18 years, both in well-paying jobs, with two teen-aged children.
Deciding on divorce, they had agreed to work out a resolution through Collaborative Process instead of going to Court. Custody of the teenagers was not an issue. The children had a close relationship with both parents and because Kevin and Jackie had separated, the children were already going back and forth between the homes.
Kevin and Jackie could communicate regarding the children, but had difficulty with other issues – including division of their personal and shared property. Over the course of their relationship, they had accumulated a number of assets and debts.
Kevin and Jackie, along with their collaboratively trained lawyers, had a series of four-way meetings. Initially, the Participation Agreement was signed, and more urgent issues dealt with. Everyone then began to accumulate documentation regarding their assets and debts on the date of separation and marriage.
It’s important to mention that it was Kevin’s decision to separate. Jackie was very upset about the separation and Kevin felt guilty about it. In a scenario like this, collaborative professionals know that the negotiations can end up being prolonged. So the lawyers arranged for Kevin and Jackie to each retain the services of separate Divorce Coaches. With their help, Kevin and Jackie were able to explore their emotions and learn techniques to negotiate effectively with each other – keeping their children’s best interests at the forefront. Moreover, their Coaches helped each of them recognize that the negotiations were not the place to even the score for past hurts. By involving Coaches early in the process, Kevin and Jackie saved a lot of money and built upon the good working relationship they had established on matters related to the children.
Kevin had received an inheritance during his marriage, but because he had chosen to use it to pay household bills, it was irrelevant according to the law. Jackie agreed that she should give Kevin something to compensate for this loss.
One meeting was spent discussing the household items. If they had been in Court, it would have been a battle. But the lawyers helped to maintain perspective when addressing the items in dispute – reminding them that these were just “things” — not that important in the grand scheme of life.
Some of the more sentimental items were especially difficult to divide, but after some discussion, they each compromised a bit and a resolution was reached. Jackie was perhaps more generous than she had to be, as she was considerate of Kevin having spent his inheritance on family expenses during the marriage. She also knew that in the next couple of years she would be receiving an inheritance, which she would not have to share with Kevin.
One meeting was spent going over their entire financial picture. A Financial Advisor had already met with Kevin and Jackie and had gathered documentation of their debts and assets. The financial advisor had also explored the consequences of various settlement options with them. This made the lawyers’ jobs much easier, since Kevin and Jackie were well prepared when negotiating the agreement.
Kevin and Jackie had a lot of debt. Jackie had a pension from her employer, so an actuary was brought in to complete the valuation. The home had been sold already and the proceeds divided, so that was not an issue. Kevin had a small business, and neither knew what it was worth. So Kevin and Jackie agreed to jointly retain a local business valuator to determine its value. The lawyers advised the valuator to be completely neutral in his valuation. He was also asked to not generate a detailed written report, but rather to meet with the parties to discuss his conclusion, thus minimizing the cost. Had they been in Court, they probably would have had to retain separate business valuators, who would have completed expensive reports and disputed each other’s results – resulting in more time and money spent.
When the business valuator completed his investigations, a meeting was held to discuss the results. Jackie was not involved in the day-to-day operations of the business, so it was helpful for her to hear directly from the valuator how he determined the business’ value. Both Kevin and Jackie were comfortable with the valuator’s conclusions, so a second opinion was not needed.
The next to last meeting consisted of putting together all the information and discussing settlement. They now knew the value of the assets and debts on both the date of separation and the date of marriage, and were able to reach a settlement. Since Jackie’s pension was worth about the same as Kevin’s business, it was agreed that she would keep her pension and Kevin would keep his business. They would also divide their debt equally between them. They both had the children about the same amount of time and both had about the same income, so it was agreed that neither would pay the other child support. Instead, they agreed to equally share the costs for the children and to communicate regarding the children via email.
A draft separation agreement was prepared for their review. Some minor changes were made, and it was signed by both in the final meeting. The parties were very satisfied and were able to move on with their lives. And because the conflict between them was kept to a minimum, the children ultimately benefited.