Divorce, like a business dissolution, is a process to terminate a relationship and divide assets, liabilities and wealth, says Kaitlyn D. Arthurs, an Attorney at McCarthy, Lebit, Crystal & Liffman. Unfortunately, this process can be complicated by emotion.
“Divorce is a high-conflict situation that involves sadness, anger and grief,” Arthurs says. “However, when a person approaches it with a business mindset, he or she can lessen the emotion in order to reach an end and minimize cost, both financially and emotionally.”
While there has been a shift away from litigation to numerous alternative dispute resolution processes, every case is unique. Clients should know their options and work with a practitioner who has a firm grasp on how those alternatives will coincide with different personalities and situations, and can then help determine the right approach.
Smart Business spoke with Arthurs about these processes and how bringing a business-minded approach to divorce can reduce some of the stress involved in reaching an end.
What are some important things to keep in mind when going through a divorce?
It’s important to recognize that a divorce is like a business breakup. The end goal is to ‘cut a deal’ to reach a resolution where both parties are satisfied and will, therefore, adhere to the terms. It is advantageous to both parties to be solution-driven to avoid getting lost in the weeds on the problems, which may or may not matter.
More importantly, a process provides the parties significant control over both the process and the outcome. The more involved the parties are in taking steps towards resolution, the better off the parties will be in the end.
What are some of the processes available?
Dissolution and divorce. In a divorce, a lawsuit is filed and, absent a settlement, the court will decide all issues. Litigation provides the ability to issue subpoenas to obtain information, to secure restraining orders, and/or to obtain a “divorce” if the other party refuses to engage.
However, litigation makes sensitive family matters public record, which can be problematic.
A dissolution allows the parties to reach a resolution prior to submitting the final agreement to the court. The parties may use one of many alternative dispute resolution processes, which include the following:
■ Cooperative Divorce: Through counsel, the parties utilize principled and facilitated negotiations to come to a settlement, which can involve meetings, phone discussions, sending proposals or shuttled diplomacy.
■ Collaborative Divorce: The parties and counsel agree in writing to work together in a series of ‘four-way’ planned meetings (which can involve joint evaluators/experts) to resolve the case. If there is an impasse, the parties must hire new counsel to pursue other processes, including litigation. This rule keeps the parties engaged to the collaborative process, while promoting an environment of confidentiality.
■ Mediation: The parties jointly hire a mediator to facilitate discussions to lead them to an agreeable solution. A mediator cannot provide legal advice, but will place the parties in the driver’s seat to problem-solve solutions, which can minimize cost. Either party may retain counsel to consult on legal issues as they arise.
How does being proactive help minimize costs and preserve wealth?
Organized information is power. It’s important to establish a team (attorney, accountant, financial planner, etc.) that will be available to answer questions during the process.
Moreover, compiling documents to substantiate all assets, liabilities and income is a proactive way to prepare. Such information would include documents to demonstrate premarital, inherited, gifted or personal injury monies, which would remain a party’s separate property not subject to division.
Wealth can only be preserved when a party asserts and proves a claim with documents. Knowing how to transfer wealth during the marriage is also good preparation. Staying one step ahead of the other side will create an advantage. Time is money. The more information that can be provided in an organized fashion, the better an attorney can prepare and keep costs reasonable. ●
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