Marital dissolutions can get ugly and expensive, but they needn’t be. Collaborative divorce has emerged as a way to split up marital estates amicably and creatively, all the while minimizing professional fees and court costs. This approach is not just for small estates either — wealthy couples actually stand to lose more if settlement is left to the court’s discretion.
In collaborative divorce, the parties contractually agree to settle their breakup out of court and to openly exchange all relevant financial information. Each side hires his or her own attorney — then the parties meet regularly to brainstorm settlement options. The only court appearance occurs when the attorneys present their final settlement agreement to the judge.
Why does collaborative divorce save time and money — especially for larger marital estates with complicated settlement considerations? Simple — it requires only one neutral financial expert.
For example, suppose the wife owns a private business interest. In a traditional divorce case, two experts would be hired and educated about how the business operates. Each expert would prepare an independent appraisal of the business. This process is time consuming and may disrupt normal business operations. In addition, two experts rarely arrive at exactly the same value conclusion, requiring them to rebut each other’s report and reconcile the differences.
But with one expert, these problems are eliminated. And beyond providing appraisal expertise, the financial expert can help divorcing spouses with many other issues, such as alimony and child support payment options, equitable asset and debt allocations, and postdivorce budgets and tax preparation.
True, collaborative divorce isn’t for everybody. Trust and honesty are key prerequisites. But those who successfully collaborate stand to benefit: The goals are to maximize the “pie” before slicing it up — and to minimize hard feelings. The latter is especially important when the parties intend to co-parent or jointly operate a business after the dust settles.
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