Divorce Financial Planning

People getting divorced generally do not want to destroy their lives. In fact, people who chose divorce often do so to improve the quality of their life, not extinguish any satisfaction and joy they may have. Of course, this is not always the case and even people who chose to end their marriages often have trepidation and anxiety about what that will mean for their future. Either way, one thing no one wants to do is to destroy their economic security.

Financial security often means financial planning and the plans most people make usually do not include divorce. One of the biggest fears people getting divorced have is that they will have no money. This is often true even for people of substantial means . . . the fear of not having money seems to go with the territory of divorce.

There is actually often good reason for this fear. A financial plan for one family structure may simply not work when that family restructures into two households--it may not work if the assets are simply chopped in half. A plan for a certain level of income to cover the expenses of a family that made a lot of sense before, may no longer work and this is true for college expenses and estate planning as well.

What can we do? The obvious thing to do is to make a new plan. Take a look at the available resources, the plan that is in place --even if it is ad hoc--and structure the settlement to take into account the preservation of wealth and the lifestyle needs of the family. What's amazing is how infrequently this actually happens. When divorce is approached antagonistically, as it often is in the traditional adversarial process, everyone grabs as much of the pie as they can often leaving them with a handful of crumbs. That is not a plan!

Collaborative Practice and mediation both encourage parties together to make a new plan for financial separateness. Collaborative Practice utilizes the services of a financial specialist who can help the parties assemble the information they need to understand their situation and carefully consider the ramifications of each option as it is discussed and considered. If a family has been working with a wealth manager, estate planner, accountant or other financial professional, the Collaborative lawyers and other Collaborative professionals or mediator can work with those people to best understand the objectives and structure of the original financial plan and the best way to revise it for the new situation. Financial specialists can also be brought into a mediation to help the parties best understand their money and find the best way to manage it going forward.

I am often asked if people getting divorced can actually work together to figure out the best way to come apart. I answer if they want to and they get support, they usually can. Jon Kabat-Zinn explains in an interview how the mind is like the ocean, typically agitated by waves and activity on the surface, but calm and peaceful below the surface. If the calm below the surface can be reached, lawyers and other professionals can actually help more than they can by fanning the flames of fury.

Happy or Right? Finding an Authentic Voice in Divorce

In the Prologue to her book The Dance of Connection, Harriet Lerner, Ph.D. writes of a story she had heard: Two little kids in a sandbox with their pails and shovels. Suddenly a huge fight breaks out and one of them runs away screaming, “I hate you! I hate you!” In a few minutes, they are back in the sandbox playing together as if nothing has happened. Two adults observing from a nearby bench are watching. One comments to the other, “How do children do that? They were enemies five minutes ago.” “It’s simple,” the other replies. “They choose happiness over righteousness.”

This is a bigger struggle for adults and certainly for adults who feel betrayed and angry going through a divorce. Very often people in the midst of divorce or separation feel completely misunderstood by their partner. It can feel that divorce happens after years of struggling to be heard and appreciated by the other coupled with not understanding why the other does or says what he or she does or says. All in all a very frustrating downward spiral!

And of course, as adults struggling to find a way to communicate, just moving on is not an option. Through divorce we need to find some way to begin to reconcile hurt feelings and be able to talk about the things that matter after years of feeling unheard as we look for ways to communicate in an authentic voice about important issues.

People frequently develop habitual non-productive conversational patterns around conflict with each other. We all know what this looks and feels like. There are a few topics around which my husband and I often disagree. When we get into a discussion on one of them, he might say something to which I have my usual response. In turn, his response is just as predictable and when it’s my turn again, the words that spring into my head, if said, will spur a 20 minutes argument of such predictability that I could easily script it in advance. Not only is the argument predictable, it is frustrating and boring. Neither of us feels heard nor do we make room for the other’s feelings. In other words, neither of us is willing to sacrifice the struggle to be right in order to be happy.

We can choose to stop these non-productive patterns of conflict-conversation, opting instead to find an authentic voice with which to express what is most important to us. We can work toward being our best selves even in the most difficult of situations – and conversations around separation and divorce are challenging! Not only can we do it, we can do it without the participation of the other person.

In her book The Good Kharma Divorce, Judge Michele Lowrance recommends finding and defining the person you want to be though your divorce (the person you would like your children to remember) and acting from a strong sense of that person as you make decisions throughout the process. Dr. Lerner writes, “We can operate from a strong sense of self, even when the other person won’t talk to us at all.” And goes on to say, “The challenge in conversation is not just to be our self but to choose the self we want to be.”

The challenge of course is how. How can we find and hold onto the person we most want to be without sacrificing what is important to us? This takes work and for most of us it requires help. One of the most important things we can do for ourselves, is to get the kind of help and support we need to figure out what we want and need, how to be the strong and how to figure out how and when to communicate it. If we are successful in learning a way to communicate in this manner, we are likely to feel a lot better about our partners and ourselves as we emerge from divorce. Although our marriages or partnerships may be over, the time spent in them is not wasted nor should it be disparaged by divorce. If we honor ourselves and find a way to honor the relationship we had even if we were hurt or betrayed, we will do much better by our selves and our children.

Surviving Divorce . . . and Thriving!

Divorce is a painful experience. People going through divorce feel vulnerable and they very often feel shame. Think about the language we use around divorce . . . “failed marriage” . . . “broken family” . . . these are words that imply that we have done something wrong if we or our partners choose to end our marriage. Yet as a culture, we do not know how to handle shame. Even the word itself can be hard to say.

I recently went to a conference and heard a talk by a wonderful speaker, Brené Brown. Dr. Brown is a researcher on shame and vulnerability. She is actually a fantastic and inspirational speaker which might seem surprising given her field of expertise. Believe me, I went to hear her with trepidation, but I left with joy in my heart.

What is so inspirational about Dr. Brown’s work is that she has discovered that people can develop shame resilience and learn to live fuller more joyful lives if they do. I recommend her book, The Gifts of Imperfection to anyone wishing to learn more about her fascinating work and how to apply it to your own life.

One thing I have learned in many years of working with divorcing families is that divorce can happen without anyone doing anything wrong. I have also learned that while divorce is the end of something, it is also the beginning of something new and as yet undiscovered. It can be scary and unsettling not knowing what that new thing may be and some of us may dread that sense of unknown but even then, we can be resilient, we can hope and we can plan. The combination of resilience, hope and planning can lead to a better outcome from divorce than we could ever have imagined.

Dr. Brown’s work seems to indicate that there are some things we can do to actively help ourselves survive divorce and thrive afterward. Some of those things are

• · Seek help – get professional legal and emotional support to help you through the process. Collaborative Practice has these supports built in but they can also be pieced together.
• · Get and maintain social support. Nurture your social life and don’t be afraid to call your friends to do things with you. Sometimes people going through divorce feel ostracized from their friends and sometimes friends just don’t know what to say to be useful. Frankly, people often say the wrong thing. So what? Tell them how they can be useful and most people will be glad for the guidance. You can also join a divorce support group.
• · Stay connected with others such as family or friends. Pick up the phone and call. Don’t worry about being a drag.

Divorce is a significant change in our lives. It can make us feel vulnerable, ashamed and afraid. Pretending that it doesn’t (even if we are the person seeking the divorce) does not help us overcome those feelings. Acknowledging and coping with the ramifications of divorce on all levels, including our feelings, can lead us to a place of better understanding of ourselves and help us to learn to cope through adversity. We cannot do it alone. One thing that Dr. Brown’s work makes clear is that we need other people to help us figure it all out.

Divorce Doesn't Have to be So Hard

A colleague of mine recently sent me an article that estimated approximately one half of all marriages in this country end in divorce and another one-forth of couples remain unhappily married because they assess their misery as less difficult to bear than the process and effects of divorce. That struck a cord for me because I don't think that divorce should be than spending your life in an unhappy marriage.

Of course we have all heard the horror stories, read the books and may even know first hand how absolutely awful a divorce can be if that is the road a couple chooses to change their legal status. If the hurt and anger following the end of a marriage lead to a scorched earth approach to divorce, that is certainly a disaster for the couple and for any children in the family. Sometimes, people do just need to fight.

Sometimes it's more complicated than that . . .

There are alternatives to fighting. More and more people are finding different ways to end their marriages. More and more, divorcing couples are looking to find a way to heal themselves and find a new peace on the other side of divorce. More and more, people are looking for a good divorce. Divorce is certainly a very difficult event in life whether or not you choose it. It can be an opportunity to reshape your life to better align with your core values. It can be an opportunity to plan your future rather than stick with the inertia of status quo even if the status quo is not working.

Below are a few guidelines to help you make your divorce easier:

• Decide who you want to be --how you would like your children to describe you--and act like that person even when you don't want to.
• Plan for the future rather than react to the past even if that is harder to do.
• Get experienced professional help to process everything that comes up in the transition--whether emotional, financial or legal. Don't count on your friends to offer the advice you need.

I am a big believer in choosing your own destiny. Choose professionals who will help you be the person you want to be rather than professionals who will want you to fight the good fight. Some fights are worth having--other fights, cost a lot of money, end up with no good result and ruin the possibility of good future co-parenting. Ask yourself which is yours.

I also believe that mediation and Collaborative Practice are much more likely to help you grow through the process of divorce rather than diminish. Even if you are really angry, it may be worth the time it takes to learn about these choices and consider if they may be right for you. I admit that this is my personal bias. It is a bias I have come to after more than 20 years working as a matrimonial lawyer and going through my own divorce.

The Importance of Really Listening

Dick Cavett once said, "It’s a rare person who wants to hear what he doesn't want to hear." My experience goes further, sometimes people simply don't hear what they don't want to hear or do hear what they expected to hear.

Why is it important to hear, even when what is being spoken is not what you want to hear? Because listening to other people is the only way to truly resolve conflict. Does that mean that listening to others means not expressing our own needs? Quite the contrary. Changing the way we listen to a person, changes the way we interact with that person. True listening can change an adversarial relationship to a cooperative one.

Truly listening to the other party can feel threatening to a person in conflict because it requires the listener to temporarily set aside her own frame of reference and position and truly try to experience the speaker's perspective. A mediator or Collaborative divorce professionals can be effective under these circumstances by allowing and fully listening to all parties' perspectives in the presence of the other.

Empathetic listening allows the speaker to open up emotionally and become more available and amenable to problem solving. Win win solutions that add value require problem solving ability on the part of all sides of a conflict or dispute. Without it there can only be frustrating argument.

Divorce Without Destroying Your Family

Divorce does not have to be destructive. Even though divorce is painful and difficult, it does not have to destroy your children or your finances if you and your spouse are willing and able to work together to try to find a solution that works for both of you and your children. Recently, I have been incredibly impressed with the strong impulse of my clients and their spouses to do this even in the face of challenges.

I wrote recently of the financial advantages that can be accomplished by planning together rather than teraring each other apart. I was speaking to a financial expert last week who told me that there are many ways that divorcing couples can save money on taxes if they and their divorce professionals are willing to work together rather than adversarily. One huge advantage of Collaborative Practice and Mediation is the opportunity to talk candidly about how the family might save money. Almost no matter how angry at your spouse you may be, everyone wants to have a smart plan. I say almost because some people are so angry that they would rather take a scorched earth approach than think through the problems to find good solutions to divorce. Years ago when I was litigating, I had a client who told me that she would rather stand on the corner with a tin cup in her hand begging for money to pay my fee rather than concede one cent to the other side. Of course that was a very sad situation and no children were involved. She was very angry and hurt and could find no other way to express her feelings than by fighting. I do not know what happened to those people but I have always regretted that I was not able to pursuade my client to work more cooperatively to find a better solution. Of course this was years before Collaborative Practice was available and my client would not have been comfortable mediating.

Divorce does not have to destroy your children. If divorced parents work together to cooperatively parent, children of divorce fare no worse than children of intact families. I recently attended a workshop given by two child psychologists on developing healthy parenting plans for divorced families. Even parents who are really angry at each other can co-parent successfully if they are willing to make a commitment to their children. Successful post divorce parenting does not necessarily mean spending any time with your ex. It does not mean that you have to like them. There are steps that you can take to support your children to be well adjusted. Working with divorce lawyers and other professionals who are sensitive and knowledgable about these methods can allow you to successfully parent after divorce.

Financially Surviving Divorce

Earlier this week a colleague of mine mentioned that she was just coming from bankruptcy court. She said she thought 85% of the people there have suffered a divorce disaster and are dealing with the repercussions in bankruptcy. Wow. Could that be true? Even if the statistic is less than 85%, the fact that so many people come out after a divorce so financially maimed that they are forced to declare bankruptcy is horrifying.

What leads to this devastating state of affairs? It is not one circumstance alone but a culmination of several factors that can create the potential for financial ruin.

The cost of divorce alone is a factor. It isn't cheap. The more unmanaged conflict there is between the couple, the more expensive it can be. Legal fees can be expensive. The more time lawyers spend resolving conflict, the more the fees are. Sometimes, one spouse has hold of the purse strings and the other is left scrambling to find a way to pay the fees. Recently, new New York Divorce legislation has been enacted designed to require the moneyed spouse to lay out funds for the less moneyed spouse to hire legal counsel. This is a good effort to try to help level the playing field between spouses from the get go. I recently read an article about a woman in California who is using the money she received from her divorce to start a business loaning money for legal fees to divorcing people (mostly women) secured by the likelihood of their future divorce settlement.

Another reason people suffer financially after divorce is the difficulty maintaining a lifestyle on reduced--sometimes severely reduced--income. Whether or not a person is the payer or the recipient of support, it can be extremely challenging and sometimes impossible to make the adjustments in lifestyle necessary to live on a lot less money especially if children are involved. If there are small children, it can be hard for a parent with primary parenting responsibility to work enough hours to make ends meet given the structure of the post-divorce finances.

What to do?

I think there are two things divorcing couples can do to increase the likelihood of financial survival for both of them after the divorce. First, they can choose a process to make the necessary decisions that minimizes conflict. Mediation and Collaborative Divorce both concentrate on the problems to be solved rather than the conflict itself and can help people stay focused. They also support participants to do the hard work of minimizing the blame game and centering their discussions around their children and their finances. This problem-solving approach reduces costs by keeping the professionals focused on problem-solving rather than the conflict. It also segues into the second big way people can ensure that they [financially] survive divorce. . . by taking the time to plan. Divorce is painful and anxiety provoking. People are often in such a rush to get it over with that they reach agreement on the finances without really understanding what they are agreeing to. In the end, it pays to take the time to examine the costs of the current lifestyle, find out what thing cost, figure out or estimate the cost of lifestyle choices going forward and plan a way for both to survive.

Divorce is a difficult process that involved disentangling an emotional as well as a financial relationship. It makes sense to tease the two apart and planning a way to address both sensibly and realistically before getting to a "deal" that night not be do-able.