Author’s Bio : The following article is written by Sophie Kinsella. She is a guest columnist, blogger, author for various websites and communities including http://www.ovlg.com/. She has completed her Post Graduation in Social Welfare from California University and is currently working with a reputed Bank located in California. She loves to write articles during her free time especially on topics like bankruptcy, investment opportunities, monetary policies, etc.

Here is Sophie’s blog. Thanks Sophie!

It’s a common saying that marriages are made in heaven, but why then in most cases they culminate in divorce. In accordance with the U.S. divorce statistics, separation rate in the nation is very near to the dreadful figure of 50 percent. While it’s true that a whole lot of marriages are unsuccessful these days, not all marriages fail for the similar reasons. One of the biggest issues in the lives of married couples that finally result in separation is “money”. The craze for money is at the root of all types of evil, and it’s undoubtedly the main reason behind quarrels, fights, and divorce filings. Impulsive spending habits and frequent arguments over money may lead to misapprehensions and poor communication between married couples. However, the fact remains that unscrupulous use of credit cards and impulsive shopping can easily lead a couple into a sea of credit card debts. Under such circumstances, a collaborative divorce process could be used to get rid of your debt problems.

Divorce is mostly an emotional procedure filled with perplexity, legal hassles and court dates. It might also prove to be financially exhausting for both the partners involved. In a majority of the cases, couples can jointly agree to conditions without the expense and time a divorce court procedure requires. This is a court procedure in which a divorce agreement is settled out of the court. There’s a separate legal counsel for each of the parties, and instead of a judge deciding the terms, both the parties take a decision over a jointly agreeable resolution.

Using the collaborative process for resolving complicated financial issues

In order to resolve their difficult financial problems, both the parties need to understand their financial position, are capable of expressing and developing alternatives that would solve the problems, and then select the option that’ll serve the requirements of each party separately and of the family as well. When it comes to collaborative practice, one of the big advantages is that, both the parties work together with a financial consultant. Financial experts who have experience in finance or accounting can help the parties in collecting and comprehending information about their debts and assets. They may also assist both the parties in developing monetary options for their multiple financial anxieties and then help them analyze the outcomes of each alternative. This could comprise exploring the tax consequences of some preferences and expected earnings and resources for each party in the upcoming days. If required, other experts might also be involved to offer assessment services, business evaluations, or other exceptional services that’ll facilitate both the parties, their financial consultant and collaborative attorneys recognize and value their resources. Once the parties get sufficient information regarding their economic situation and the choices on hand, their collaborative attorneys will help them in negotiating a suitable resolution plan.

Ethical considerations

The International Academy of Collaborative Professionals offers a regular set of values, ideologies and principles to guide decisions and behavior for collaborative experts. Each of the collaborative attorneys is supposed to maintain certifications necessitated by their profession. Also, collaborative professionals need to keep their clients informed regarding the privacy necessities and practices in the collaborative procedure which require open declaration among the collaborative professionals.

Often, the challenge is how to get two spouses to set aside their differences long enough to reach a number of difficult decisions together (usually involving the children, support, and division of property). You can do it in different ways. Your family lawyer can help you negotiate a separation agreement. You can use a mediator or an arbitrator. You can use a lawyer trained in something called Collaborative Family Law – a field of law committed to avoiding court. Or you can go to court and ask a judge to make your decisions for you. Court is the most expensive option. Paradoxically, court gives you the least control over your decisions. Court also takes the longest time. It is also the most emotionally challenging option. It might surprise you to learn that courts actually prefer you to reach your own separation agreement. With a few exceptions such as child support, the court believes you and your spouse to be more qualified to decide how to arrange your affairs. This is why it is usually better if the two of you can agree on how to settle the issues between you through negotiation, mediation or collaborative family law. The other reason is that spouses who communicate effectively pay lower legal fees: they can reach a result without the intense involvement of the lawyers that court requires.

If you have a written arrangement for these things, it is called a separation agreement. You don’t have to have a written agreement: however, if all you have is an informal agreement and if your agreement is not written down, what will you do if your spouse doesn’t live up to the agreement? Or if one of you forgets? How can you prove that you and your spouse agreed to certain things? The written agreement is what gives you certainty for the future. If you can agree on things and write down your decisions in a separation agreement, that is best for everybody, including the legal system. A separation agreement must be signed by both of you in front of a witness for it to be legal. Your witness must sign the agreement too.

Sometimes clients ask if they can write their own separation agreement. One reason that law can be difficult to understand that every situation is different based on the facts of each case. A lawyer’s job includes showing you what is fair and reasonable under your individual circumstances. This advice is custom-tailored for each client. That is why it is better that each of you to have the help of a family lawyer. Usually, you will need the help of a lawyer to advise on your rights to property, parenting and support.

Sometimes clients ask why there have to be two lawyers. For a separation agreement to stand the test of time, the court looks for each spouse to prove that they had their own independent legal advice. One lawyer should not advise both opponents in the same matter . This is because it is not possible for one lawyer to make sure that each opponent gets the best deal. You should speak to your own lawyer to make sure you know all of the legal consequences of your decisions. You have a right to complete and honest information about your spouse’s financial affairs before you make any decisions. A lawyer will also make sure that you understand what is written down and that you agree to it. Once you’ve had the advice of your own lawyer, the courts assume that you and your spouse will live up to your agreement in the future. If in the future, one of you decides you don’t like the agreement, you can try to negotiate a new agreement. However, if you cannot reach an agreement together, you have to go to court and ask a judge to change it, which can be costly for the spouses.

So, you can control your legal expenses by understanding your options, by communicating effectively with your spouse even after your marriage breaks down, and by working with your lawyer to craft an enduring separation agreement tailored to your individual circumstances.

*Source: Todd, Robert, “The Going Rate”. Canadian Lawyer. June 2011. Online at http://www.canadianlawyermag.com/images/stories/pdfs/Surveys/2011/legalfeessurvey.pdf

Are you one of them?

Well, for starters, the new rules – formally known as Bill 133 – only apply to spouses where no court order, family arbitration award, or domestic contract that provided for the division of pension assets between the two spouses was made before January 1, 2012. If you’ve entered into any one of these arrangements before the end of 2011, you’ll have to stick it out under the old rules.

The new rules also affect only those pensions covered by the Ontario Pension and Benefits Act, or in other words, provincial pensions. So if you or your spouse is a member of a pension plan that operates at a nationwide level like those available to federal public service employees or banks, for example, the value of the marital pension will be calculated in exactly the same way it was before. Provincial plans, however – like HOOPP, OMERS, and Ontario Teachers’ Pension Plan – will be directly affected by the new rules and there will be a number of changes divorcing spouses with pensions like these should be aware of.

The first major change involves just who’s calculating the value of the pension. Pensions are currently valued by third party actuaries retained either by one (or both) of the divorcing spouses or their lawyers. The new rules, however, no longer give divorcing couples this option. Beginning in 2012 divorcing spouses will have to apply directly to the pension plan administrator to calculate the value of the pension to be divided as net family property. You will need to appeal to them directly by filling out a form from the Financial Services Commission of Ontario’s (FSCO) website and they will likely charge a fee for their services.

The new rules also allow divorcing spouses to transfer the value of the member spouse’s pension in the form of a lump sum payment if they desire; this option was not available under the old rules. Previously, the only way that a spouse could receive their portion of their partner’s pension was either as a percentage of monthly pension benefits, when they became payable, or indirectly through negotiating their settlement (kind of a, “you get the house and I’ll keep my pension” arrangement). It’s important to know that this new lump sum option is just that: an option. Spouses can still elect to go at it the old fashioned way if they desire.

The last big change involves how the value of the pension is calculated. As they relate to pension valuation the new rules don’t contain any provisions that require the spouses to do anything over and above what they already do; you still have to get that pension valued. However, the pension administrators – now the folks in charge of calculating the value of these pensions – will not be applying traditional actuarial practices in valuing them. The new rules mandate that all pension valuations be performed using a prescribed formula that should apply to all pensions.

This last change appears to result from an effort by the province to minimize conflict and lengthy court proceedings. By setting out a simple formula for the administrators there’s very little room for either party to argue or to revisit the calculation at some later date in light of a change in circumstances, both of which were not uncommon under the old rules. The downside to this approach, however, is that not all pensions are created equal (and certainly, not all divorcing couples are either). The new rules don’t make any provisions for the kinds of unique circumstances that could impact the value of pensions – like retirement ages or health issues – but unless the Courts decide that these issues should be taken into account as they arise, we’re probably stuck with them for the time being.

My aunt was a wise woman. Money is an important commodity, especially when parties are divorcing. I help people minimize the problems related to sorting out the money issues in a divorce or separation.

As a Financial Specialist in the Collaborative process, I am a neutral This is a real advantage in that you avoid or minimize the back and forth arguments around many of the financial issues when you have the help of a neutral third party.

As the Financial Specialist my job is to collect the financial documentation so there is full disclosure. This is the boring but necessary part of the process. I will ask you to collect your tax returns, account statements, property valuations, pension valuations, etc. before we begin the financial process. Sometimes each party will have a different valuation from an expert such as opinions as to the value of the home. We discuss these valuations and come to some agreement, often somewhere in the middle. This is much more cost efficient than fighting in court. Even better, the parties jointly hire a single valuator to determine the value. This saves money, time and arguments.

Within the financial process, we focus on the property and support issues. I create a report for the family so that they can easily see what the assets and debts of the parties were on the date of separation and date of marriage, We also do a review of the last three years of income for each spouse. From there we can begin to look at settlement options for the property and I can run calculations on support ranges based on the Spousal Support Advisory Guidelines and Child Support Guidelines. I make sure you make decisions based on the proper information. Throughout our meetings and communications, I work to educate you about your financial options. It is important that you understand any tax, income or legal issues. I work together with the lawyers to alert them to when you might need legal details as they relate to the financial issues within your family. When your tax issues are complex, I always recommend that you work with your accountant.

Throughout this process, we work as a team to help you negotiate a financial agreement through individual, joint and five way meetings. This is a flexible model and we work with the unique needs of your family to help you reach an agreement. It is very efficient and results in better agreements.

The Collaborative Financial Review is the report that summarizes the information, agreements and areas to be resolved. Where possible, I assist you to reach agreement and we document that within the report. When there are unresolved issues, I provide the supporting information and outline the issue so that when the report goes to your legal team, they can work with you to resolve that issue.

I find my role very rewarding in that I can often assist to reduce the anger and animosity in the financial negotiations, and help the family craft an agreement that works for everyone fairly.

I am not sure that my aunt was right when she said “money is the root of all evil” but it certainly can cause arguments, especially when you are going through a divorce. I help people just like you resolve the arguments cost effectively and in a fair way for everyone.

If you aren’t in court, I don’t blame you if you don’t want to complete it.

As your lawyer, we ask you to do a financial statement to ensure that you are protected. Yes, to protect you! We want you to fully disclose your assets and debts on the date of separation and date of marriage to ensure that your spouse cannot wiggle their wait out of the agreement, claiming that you were hiding assets. The Family Law Act allows the Court to “set aside” (which means not enforce) a separation agreement if there has not been full disclosure.

The financial statement is an easy way to ensure that there has been full disclosure. It is like a checklist for lawyers.

We ask your spouse to provide a sworn financial statement for the same reasons. It is an easy way to ensure we have a complete financial picture from him or her too.

Once we have a complete financial picture, we can advise you as to the range of outcome should the matter proceed to court. In other words, we can give you legal advice. Without complete disclosure, we can’t give you advice: we are just guessing.

Lawyers can get into big trouble with the Law Society if we give advice based on guesses or assumptions that turns out to be bad advice. Okay… you got me… we are also covering our own butt when we are asking for sworn financial statements.

Disclosure is Essential

It isn’t the financial statement itself that is important – what is important is that there is full disclosure. It’s just that the financial statement makes it easy.

A recent case before the Ontario Court of Appeal, known as Ward vs Ward clearly states that the exchange of financial statements is not necessary but full disclosure and knowledge of the other person’s financial circumstances is essential. In that case, the parties exchanged some documentation with the assistance of the family’s accountant. Financial statements were not completed but there was full disclosure and knowledge of each other’s financial circumstances.

The court describes the disclosure process in that case as follows:

“…neither party filed a financial statement, nor was one required under the terms of the process to which they agreed. While this did not diminish the obligation to disclose, in this case, the parties relied on the collaborative law process and other avenues of disclosure, including net family property statements and information from Mr. Wetstein [the family friend and accountant]”

In the end, the Ontario Court of Appeal determined that the husband’s disclosure and the wife’s knowledge of financial circumstances of the husband were sufficient even without sworn financial statements exchanged. The Court refused to set aside the agreement reached.

Lawyers often use the financial statement because it is easy. It lists all of the categories of assets and debts so you don’t miss disclosing something important. In our law firm, we insist on backup documentation to verify every value in the financial statement. It is the backup documentation that is important and fulfills the obligation to disclose.

Collaborative Cases

In Collaborative cases, the Financial Specialist works with the clients to obtain a complete and accurate representation of the financial circumstances of the parties, usually without the use of a sworn financial statement. The Financial Specialist does a report and attaches the backup documentation for every value. Both lawyers ensure that their client has fully disclosed everything. Equally important, every lawyer must review what the other client has provided to ensure s/he has provided full disclosure.

In Collaborative cases, as lawyers we always carefully review the Financial Specialist’s report with our client to ensure it is accurate. Ultimately, the lawyers will ask for a sworn statement from each client stating that they have fully disclosed their assets, debts and income and that the Financial Specialist’s report is accurate and complete. Alternatively, the lawyers will add wording to the separation agreement that states both parties are warranting that they have fully disclosed everything and that the Financial Specialist’s report is accurate. Either way works.

Full disclosure is essential. If you are trying to hide assets or income, we won’t be your lawyer. We don’t play those games.

If you don’t like having to provide full disclosure, we get it. You are not alone. Complain all you want. We have big shoulders. We want your agreement done right and made to last so just get it done. It’s for your own sake.

The problem with the program is that it is made available only after a court action has been commenced. By that time, the parties are often entrenched in their positions and ready for a long drawn out fight. The mud throwing has begun.

It’s like advocating against drunk driving to car accident victims laying in hospital beds. It would be better if parties knew about alternatives to Court before they start their Court case….before it’s too late.

If we could somehow reach out to the public to let them know that they would be better off starting with Collaborative Practice instead of Court, society would be better off. Collaborative Practice is an excellent way to resolve family law issues quickly and cost-effectively, while minimizing the pain, especially for the children. It keeps people focused on problem-solving rather than verbally beating up each other. It keeps people out of Family Court. It works.

I don’t mean to rain on the Attorney General’s parade. I believe his heart is in the right place. Families going through a divorce need to know that Court should be seen as their last resort. It’s just about timing. The public needs to know before they commence a Court action.

Although most family law cases do eventually settle, they do so on the court house steps after most of the damage of litigation has occurred. The inflammatory court papers have been filed and become a public record, large sums of money have been spent on litigation and the children become victims of the divorce process.

Collaborative divorce in a relatively new concept for New Jersey.  It was approved by the Supreme Court  as a way for parties to divorce on December 5, 2005.   While relatively new, collaborative practitioners are experiencing a demand for this way to divorce.

In a collaborative case, the parties agree not to litigate from the onset.  Unlike mediation, which uses a neutral as the only professional in the dispute resolution process, in a collaborative case each party is represented by an attorney.  The value for clients  is that they avoid the damage that is done through litigation and save the  expense of the lengthy court room battle.

What can be said with confidence is that no other kind of professional conflict resolution assistance is consistently as efficient or economical as collaborative law for as broad a range of clients.  While the cost of attorney fees cannot be predicted accurately, a rule of thumb is that collaborative law representation will cost from one-third to one-half as much as being represented conventionally by a lawyer who takes issues in your case to court.

Our experience in Ontario is the same. Collaborative practice is a far more efficient and cost-effective way of getting through your divorce.

“Alex Crookes knew he was in for a divorce with a difference the minute he walked into a lawyer’s office with his ex-wife, Lynne Maclennan.

The couple instinctively sat at opposite sides of the table, until one of their lawyers, trained in the relatively new concept of collaborative family law, set a more comfortable tone for the talks.

“The first thing the lawyer said was, `Sit next to each other,’” says Crookes, 37.”

I can’t say I actually insist that clients sit next to each other during four way meetings but I certainly do my  best to help them understand that they should be working from the same side of the table – figuratively speaking.

What I mean by that is that clients sometimes think that divorce has to be a battle. I try to help them realize that they actually share the problems with their spouse, everyone wants to resolve the issues and they can work together to find a resolution that works for both of them.

Court is a battle. Each side is supposed to show the strengths of their own position and the weakness of the other.  The judge is then asked to choose between the two sides or do his/her best to come up with a just resolution. Often neither party is happy with the results and the costs can be staggering.

In the  Collaborative process, the clients work together to find a mutually acceptable agreement. The power to make decisions stays with the clients instead being given to the judge.

The International Association of Collaborative Professionals has an excellent description of the Collaborative process.

I won’t ask you to sit next to your spouse in the Collaborative process but I like the way this Toronto lawyer is thinking.

Collaborative Team Practice (CTP) is a revolutionary new way of resolving issues related to your separation and divorce without going to court. In CTP, a team of professionals works with you and your spouse to find the best possible outcome for your entire family. You stay in control of the process and the outcome. You find win-win, long-lasting solutions. It’s private, cost-effective, efficient and dignified. It works.

Here is how CTP Works:

1. In a CTP negotiation, both parties’ lawyers act as facilitators for constructive communication. They provide legal advice so you know the range of outcome at court and they ensure a legally binding agreement is produced.

2. Before negotiations begin, both parties and their lawyers must sign a “Participation Agreement” that commits them to reach a settlement without going to Court. The agreement also requires both parties to make a full and honest disclosure of all financial and relevant information.

3. If you or your spouse decide to withdraw, or if a lawyer discovers that important information is being withheld, both lawyers are required to withdraw from the case. No other lawyer from the firm can represent the client. This provides a very strong incentive for both parties and their lawyers to negotiate in good faith.

4. Each party works with a Divorce Coach to assist in dealing with the emotional journey inherent to separation and in developing communication and post-separation strategies.

5. A Financial Advisor is jointly retained to assist the parties to collect the relevant financial information and to explore settlement options.

6. Lastly, a Child Specialist will meet with the children and help the parents develop a parenting plan that is in the best interests of the children.

7. This process may, at first, sound more expensive, but in reality it is much cheaper than the Court process and is usually less expensive than negotiations between two lawyers. Why? When working through the financial issues you will be sharing the cost of one Financial Advisor rather than each paying for your own lawyers to do the same work. Likewise, you will share the cost of the Child Specialist instead of having to both retain experts. The Divorce Coach will help you keep the emotional issues from sabotaging or prolonging the negotiations, saving you hundreds or even thousands of dollars in legal fees.

8. If you get stuck in the negotiations, you can resolve the issue by arbitration and continue with the negotiation process for the other issues.

CTP just makes sense. You get the help you need rather than spending your time, money and energy on fighting. In other words, you are getting a team of experts working to find the best solution for the whole family rather than each of you assembling a band of warriors focused on waging war against your spouse.

In addition to saving you money, CTP will result in a better settlement: a win – win solution. As a result, you and your spouse will likely be able to preserve your relationship with one another. Perhaps hard to believe, but it’s true. This leads to a much more healthy situation for the children’s sake.