September 29, 2017
Once upon a time, one person sitting across a divorce negotiating table was the love of the other person’s life. They may have dreamed about what their children would look like and taken sunset walks on the beach. Now they may not be able to can look at one another.
Divorce isn’t exactly the happily-ever-after they dreamed of on their wedding day. But a crumbling marriage doesn’t have to become a horror story either.
Pre-test for Co-Managing the Family Business
What happens to the mom-and-pop business when “mom” and “pop” file for divorce? Just because you and your spouse can’t resolve your personal differences doesn’t necessarily mean you can’t maintain a professional relationship.
If you own a private business, it’s probably the biggest asset in your marital estate. Many family businesses — especially small startups — depend on key people to stay afloat.
For example, a California vineyard relied on the wife (Daisy) for sales and bookkeeping and the husband (Donald) for field management and wine fermentation. If either person stopped being actively involved in the business, the small vineyard lacked the infrastructure to survive.
Donald was a great field manager and chemist but his temper made him impossible to live with. So, after ten years of marriage and five years of co-owning the business, Daisy contacted her lawyer about getting divorced.
She read an article about the collaborative process, and the couple decided to give it a shot. They figured collaborative divorce would be a good pretest to determine whether they could realistically work together after the divorce was final.
Through the collaborative process, Donald and Daisy learned that they could problem solve and fully disclose information at the personal level. It also convinced employees, bankers, suppliers and customers that they could put aside their personal differences and work together.
But Donald and Daisy realized that there might someday be limits to their co-management arrangement. In conjunction with their divorce settlement, they set up a buy-sell agreement that stipulated how a buyout would occur down the road.
After successfully co-managing the vineyard for another two years after divorcing, Daisy helped Donald find and train her replacements, a salesperson and a CFO. Then, Donald bought out her interest in accordance with the buy-sell agreement.
Today, the vineyard continues to thrive, because the owners were collaborative, despite their personal differences.
Unlike the traditional process that might pit spouse against spouse, collaborative divorce focuses on negotiation, cooperation and compromise. When you agree to collaborate — instead of compete — it can preserve time, money and dignity. And it’s not just for small marital estates. The wealthier a couple is, the more they stand to lose in lengthy courtroom battles and court-imposed settlements.
A Growing Trend
More than two decades ago, one divorce lawyer was fed up with the roadblocks his clients encountered during the traditional divorce process. After years of practicing family law, he was tired of lengthy, high conflict situations. In the end, former spouses often ended up hating each other, and many were disappointed by how the court had arbitrarily split up their assets.
So began the collaborative divorce movement, wherein the parties contractually agree to:
The only court appearance in a collaborative divorce occurs when the judge approves the uncontested, self-imposed settlement agreement.
Since it debuted, collaborative divorce has spread through the United States and Canada.
Collaborative divorce attempts to create a win-win situation for both parties. If you and your spouse can commit to resolve your differences collaboratively, you may reap four major benefits:
Too Good to be True
Collaborative divorce isn’t for everyone. It only works when both spouses are seriouslycommitted to working together and completely honest. It involves taking more responsibility for your own settlement — rather than leaving it in a judge’s hands. Collaboration can’t work if one spouse intimidates the other or there’s an imbalance of power in the relationship, for example, in domestic abuse or fraud cases.
The biggest downside of collaborative divorce can occur when the parties start down the collaborative path and fail. If either party seeks legal action or a stalemate occurs, the collaborative process ends. Then, costs increase as the couple get their attorneys and financial experts up to speed and embark down the traditional divorce route.
An Honest Appraisal
You know yourself — and your spouse — better than anyone else. Can you realistically set aside personal differences to settle your financial and parenting issues? Or do you harbor too much resentment and anger to truly collaborate? If you think the collaborative process might work for you, ask your attorney about the process.
What to Expect in a Deposition