WHY COLLABORATIVE DIVORCE IS ESPECIALLY VALUABLE TO HIGH INCOME AND NET WORTH FAMILIESTwo specific attributes of collaborative divorce are particularly valuable to high income or net worth divorcing persons—private financial fact gathering and neutral financial expertise.
Private financial fact gatheringAn adversarial divorce frequently relies upon the hiding, exploiting, or misrepresenting of financial information to mislead, embarrass, annoy, and wear down either or both of the divorcing spouses.
For example, owners of family or closely held businesses are often victims of zealous financial fact gathering in an adversarial divorce. The lawyer for the non-owner spouse has the right and often the ethical obligation to subpoena employees, competitors, suppliers, and customers to testify in depositions or at court and to produce and disclose confidential business records. The spouse of a small business owner may retain his or her own expert to review business books, records, and tax returns. This expert’s job is to attack the credibility of the owner spouse’s financial representations, most often regarding business value or income, often producing a written report that may become part of the public court file.
Highly compensated corporate executives are not immune from the public and negative impact of zealous fact gathering associated with divorce litigation. Corporate superiors including officers and board members or human resource directors are often subject to subpoenas and depositions. The lawyer for the other spouse must find every dollar of compensation received in whatever form and gather any information that might be manipulated to support the other spouse’s claim for a greater percentage of the property or a higher alimony payment.
Business owners and corporate executives have their own tactics that allow them to hide and misrepresent financial information from their spouses. Many of these strategies are not only permitted through the adversarial process but also encouraged so that the owner or executive’s lawyer fulfills his ethical obligation of zealous advocacy. Sometimes simply skilled use of standard discovery objections and motions is enough to wear down the other spouse.
Collaborative divorce, on the other hand, focuses on an honest exchange of information by both spouses. All the collaborative participants are committed to the belief that a positive post-divorce financial plan for both spouses can be achieved only by having full and accurate understanding of the couple’s finances. We accomplish this by thoroughly and carefully identifying and analyzing financial information in a private setting. Litigation techniques such as subpoenas, depositions, and interrogatories are specifically prohibited.
Neutral financial expertiseAdversarial divorce focuses on the past and which spouse can leave the marriage with the most dollars. Many litigation attorneys are skilled at getting the court to give more to his or her client than his or her client’s spouse. However adversarial divorce does not look toward either spouse’s future and neither the litigation attorney nor the judge have the training, expertise, and/or time to analyze long term financial impact of a settlement or court order. In fact, Connecticut judges are not required by the laws of our state to consider the tax consequences of their orders.
With collaborative divorce, rather than relying upon the biased claims of financial experts retained by either the husband or wife, couples divorcing collaboratively benefit from the expertise of neutral financial specialists. These specialists whether certified public accountants, financial planners, investment advisors, or valuation specialists, are collaboratively trained and experienced. Because they are jointly retained by both spouses, their opinions, advice, and guidance are unbiased and credible. Like the collaborative attorneys, upon the conclusion of the collaborative process, whether before or after the couple has divorced, the financial specialists cannot and will not be called into court to testify.
Collaboratively trained neutral financial specialists, combine their specific financial expertise, whether asset management, tax planning, or retirement planning, with collaborative skills to educate and empower a less financially experienced or sophisticated spouse and maximize the long term financial well-being of each spouse.