When couples marry in California, there are laws that automatically apply to their assets and income. For instance, income received as a result of either spouse’s labor, skill and efforts is community property and belongs to the marital partnership. Assets owned prior to marriage or received during marriage as a gift or inheritance is separate property unless it increases in value during the marriage due to either spouse’s efforts.
These default rules can be changed in a premarital agreement. The process for creating such a contract is an important consideration. The relationship needs to be valued and the communication about financial topics facilitated to encourage open and heart felt discussions about the terms to be included. Instead of having a proposed premarital agreement prepared by one client’s attorney and delivered to the other client, in a collaborative process the couples and both attorneys work together to develop a Premarital Agreement. The process should be commenced well before the intended wedding date to assure the topics can be considered thoughtfully without any pressure related to timing.
Collaborative practitioners begin the premarital agreement process with a meeting between the prospective spouses and drafting attorneys where we learn together about the clients’ personal and professional backgrounds, as well as their goals for their marriage as a couple and as individuals. Full disclosure of all assets, obligations and income is required regardless of process. During the meeting, we review each person’s financial information and ask questions to ensure understanding. A review of what California law provides is given so those rights and responsibilities are known. Then we identify topics to be included in the document and brainstorm options for solutions. After all possible options are identified, each is evaluated to determine viability and connection to the clients’ marital goals and interests. If consensus about the terms is reached, the attorneys will then prepare a draft agreement for review. If the couple needs time to further reflect on the options together, another meeting is scheduled to hear the results of this conversation. After the draft is read by all, there is a final discussion to confirm the document is understood and consistent with the couple’s intent.
Susan Stephens Coats is certified as a Specialist in Family Law by the State Bar of California Board of Legal Specialization. http://www.collaborativepracticemarin.org/members/Coats
Photo Credit: Ann Buscho, Ph.D.
A very frequent question I am asked in my practice is do I need premarital (or sometimes referred to as a Prenuptial) Agreement. A premarital agreement can be important to someone for a variety of different reasons. The first important aspect of deciding whether you want or need a premarital agreement, is to understand what such an agreement can accomplish and address. A premarital agreement can address things like:
• how you are going to treat assets and debts that each of you bring into a marriage (examples include real property, retirement assets, inheritance, student loans, support you pay for a prior relationship);
• how you want to treat assets your earn or are gifted to you during the marriage (this can include compensation, bonuses, stock option grants, inheritance, etc.);
• how you are going to pay your day to day bills;
• do you want to pay each other spousal support (or do you want to limit it in some way);
• do you want to provide for each other in your estate plans;
• do you want to make gifts to each other;
A premarital agreement can be a very positive experience for a couple when it is approached openly and collaboratively. The objective of a premarital agreement, in my view, should be to address both parties needs and concerns going into their marriage in a way that allows a couple to (1) start their lives together with a solid foundation of being able to talk to each other about difficult topics and (2) find their own solutions. Often, people's needs and concerns arise from their past experiences (fears that arise from their parents bad divorce, their own bad divorce, or pressure from their families).
My feeling is that a premarital agreement should be something that is created together, addressing your respective needs and concerns, and reflecting who you are as individuals as well as who you want to be as a couple starting your lives together. Such an agreement can help a couple set their expectations going into their marriage and allow them each to express how they visualize their marital partnership.
If you decide you do want a premarital agreement, your next step would be to meet with a family law professional to talk about how to best go about creating a premarital agreement and the different processes and professionals you can utilize to help you.
Lissa Rapoport is a family law attorney in San Francisco and Marin County. email@example.com
Photo Credit: Ann Buscho, Ph.D.
Thank you to Brad Reid and the Huffington Post for this blog article.
Collaborate law is a variation of non-adversarial alternative dispute resolution. Specific collaborative law techniques have been discussed for about thirty years and fifteen or so states have enacted the Uniform Collaborative Law Act of 2009. While primarily focused on family law and divorce, collaborative law may be utilized in other disputes such as employment, insurance, mergers and acquisitions, or issues between family members in closely held businesses. Always consult an experienced attorney in specific situations.
In broadest overview, the parties voluntarily sign a collaborative participation agreement and are represented by attorneys whose representation ends if a traditional contested judicial proceeding begins. While participation cannot be court ordered, courts retain authority to issue emergency orders to protect health, safety, welfare, and financial interests. Attorneys must make a full disclosure of the advantages and disadvantages of collaboration in the specific situation so that a client may make an informed participation decision. There are limited institutional exceptions to the end of attorney representation when a free legal services clinic or governmental entity is involved in the collaborative representation. The parties agree to disclose all relevant and material information (although the agreement may limit the scope of disclosure) and promise to exercise good faith while negotiating. Disclosed information is deemed privileged and may not be utilized in subsequent litigation, subject to modification by the collaborative participation agreement. Exceptions to disclosure exist to prevent bodily harm or a crime, abuse or neglect of a child or adult, and to address professional misconduct or malpractice. The parties may engage appropriate professional experts to assist in the dispute resolution process. Courts may enforce an agreement that does not meet all of the formal requirements in the interest of justice when the parties intended to engage in the collaborative process.
Collaborative law, unlike arbitration under which a third party makes a binding decision, leaves the decision to the parties themselves. “Coaches” may facilitate direct communications. Unlike much alternative dispute resolution, collaborative law is pre-litigation. Hence, it may be less emotionally draining and more relationship preserving. The most serious criticisms of collaborative law center on attorney disqualification. Critics are concerned with potential attorney withdrawal at the very moment (litigation) when attorney services are most needed. An additional criticism is that collaborative law adds another layer of time and expense to disputes that end in litigation. However, attorney codes of ethics uphold the attorney withdrawal provisions and advocates of collaborative law assert that litigation rarely results at the end of a collaborative process. It is additionally asserted that privacy, control of the process by the parties themselves, and the individualized situational based aspects of the process are significant benefits.
Psychological and sociological knowledge underlies collaborative law. The following several paragraphs provide a few of many basic concepts. Fear of the collaborative process is perhaps best overcome by trust that is created by individual self-awareness and mutual self-disclosure. However, creating trust is hard work and the personal relationships may already be so damaged that trust, hence collaborative law, is impossible.
Additionally, the parties themselves may be at various points in the familiar progression consisting of denial, anger, bargaining, depression, and acceptance. There may be non-party individuals that have a high degree of unrecognized influence over the parties. Controlling parents, new boyfriends or girlfriends, and friend confidants are examples.
Furthermore, one must distinguish an individual’s interests, positions, and goals. Interests are concerns or matters of importance that drive persons and they may be unrecognized emotions such as sadness, anger, or shame. Skilled advocates help their clients develop self-knowledge and understanding that leads to attainable goals. Inquiring about “what you assume will happen,” “what is your expectation,” and “precisely what will that look like to you,” are recognized techniques to get beneath the surface.
Individuals may engage in irrational, self-sabotaging behaviors due to projecting their problems on others so that they avoid changing their behavior, defensive habits, creating excitement or chaos to override depression by stimulating the body’s physical chemical responses, and to acquire status or approval from others. Sometimes deeper psychopathology may be present that creates real risks of physical harm to themselves or others.
The parties must have common ground rules for negotiation and the attorneys themselves must be self-confident centered persons who are able to manage their own stress as well as the unique stressors of the particular situation. Professionals must be prepared to address such expected problem areas as an individual’s resistance to disclosing needed information or delaying the process either consciously or unconsciously.
Professionals must be able to recognize “transference” and “countertransference” when feelings are unconsciously redirected from one person to another. Self-knowledge, relying on facts not opinions, and discouraging posturing and positions are all helpful professional techniques. Initial meetings and the collaborative participation agreement set the stage for everything that follows. Common courtesy, mutual respect and constructive negotiations are vital to success. Certainly, however, collaborative law is not possible or even best under all circumstances.
Thankfully, an individual professional need not know and be everything as a collaborative team is likely. Particularly in family law and divorce situations, a variety of financial, wealth management and tax experts may be involved. Ideally the transparency of the collaborative process will allow efficient data collection and the development of and commitment to mutually beneficial financial goals and commitments. However, non-financial professional assistance in the form of child and adult therapists, addiction specialists, as well as family, friends, and clergy may be of equally important. The expectation is that professional individuals will bring their best neutral professional judgment to the process.
In broad conclusion, collaborative law is advocated as cost effective and relationship oriented and has spread globally. There are a number of professional organizations and training associations. These organizations may overlap and cooperate with family advocacy and mental health groups. Courts have been creating both local and state-wide rules to govern the collaborate process. Minimum professional training before one may practice collaborate law is frequently required. Consult an experienced attorney to determine the status of collaborative law in a particular state.
Collaborative law aligns with a recognizable movement to make legal services and dispute resolution more accessible and cost effective. Standards for attorney and non-attorney professional specialization, for example, licensed legal technicians, are developing. The “unbundling” of legal services so that attorneys are not required to personally engage in every client encounter, much like the current activities of a physician’s assistant or nurse practitioner, are the contemporary trend. Additionally, a host of specialized courts that have non-traditional powers and may grant unique remedies or divert parties to extra-judicial entities are increasing. Individual just-in-time services provided in a multidisciplinary package are coming to law. Increasingly, it appears that in the long-term the Anglo-American adversarial system of justice, while not totally replaced, will be reserved for certain unique problem areas. Even criminal law, uniquely adversarial, is not immune from these developments.
This comment provides a brief and incomplete educational overview of a complex topic and is not intended to provide legal advice. Always consult an experienced attorney and other professionals in specific situations.
You are faced with an enormous initial decision when you face divorce. Unless you choose otherwise, litigation is the default. However, more and more couples are choosing to divorce without going to court, by mediating or collaborating. Collaborative Law is rapidly becoming the norm, as Gary Direnfeld, LCSW, writes in his blog:
For years, family law litigators were the go to persons to facilitate the distribution of property, support obligations and the plan of care for children of the relationship between separating couples.
Mediation was always a distant alternative to the go to of family law litigators and hence the moniker, alternate dispute resolution.
Beginning the in the early 1990’s and gathering a head of steam into the new millennium and now an unstoppable force, Collaborative Law is biting the heels of mediation.
However, when looking at Google searches, Collaborative Law and Mediation combined as so called alternate dispute resolution solutions are closing in quickly on the family law litigators. As of Sunday, February 21, 2016, Google searches revealed:
Family law litigator: 35,600,000 hits.
Collaborative Law: 12,500,000 hits.
Family law mediation: 21,000,000 hits.
Given the head of steam rising from mediation and Collaborative Law, I would predict that they soon will surpass family law litigation, at least in terms of combined Google hits.
When Mediation and Collaborative Law surpasses family law litigation, which will then be deemed alternate and interestingly, Australia has long since deemed the so-called alternate dispute resolution solutions primary, at least since 1975.
This change in approach to dispute resolution is no minor thing. Given the rise of the so-called alternatives, people at the same time are becoming increasingly aware of the ravages of litigation particularly contrasted against the less costly and more peacemaking outcomes of mediation and Collaborative Law.
It may not just be a sea-change in terms of how people seek to resolve family conflict, but the sea change might also spell the death knell for litigation. Oh sure, there will always be those few who march towards court, but even there, couples are increasingly redirected to resolving matters in the hallowed halls outside the courtroom only returning to have their mediated agreements converted into orders for enforcement purposes. Many are realizing that they may as well begin where they are likely to end up – in mediation, even if going to court.
There’s a definite change a’coming. Indeed it’s here. The only question now is the depth of change and whether litigation will actually survive.
Are you looking to resolve a family dispute. Get with the times. Look at mediation and Collaborative Law.
Gary Direnfeld is a social worker. Courts in Ontario, Canada, consider him an expert in social work, marital and family therapy, child development, parent-child relations and custody and access matters. Gary is the host of the TV reality show, Newlywed, Nearly Dead, parenting columnist for the Hamilton Spectator and author of Marriage Rescue: Overcoming the ten deadly sins in failing relationships. Gary maintains a private practice in Dundas and Georgina Ontario, providing a range of services for people in distress. He speaks at conferences and workshops throughout North America. http://www.yoursocialworker.com
photo credit: Ann Buscho, Ph.D.
People often become paralyzed when it comes to dividing their personal property (household furniture, furnishings, sentimental items such as wedding gifts, photos, children's artwork, etc.). It is certainly one of the harder issues to contend with for families that are separating their homes because often there is much emotion attached to items accumulated during the course of a relationship.
While there are many ways to divide these items, if it is possible and manageable for them, it may be in their best interest both emotionally and financially to try to find a way to divide these items themselves rather than pay their professionals to become involved. I have seen many families navigate these issues constructively and thoughtfully when given a structure that works for them.
People often find the issue of how to value items challenging as well. It is often very difficult to put an economic value on emotional attachments. From a legal perspective, the value is generally thought to be what they could reasonably expect to get for an item at a garage sale or on Craig's List.
The first step for couples is often to create a comprehensive inventory of the items that need to be discussed and divided. Sometimes these lists can be created together. In the alternative, each person can create their own list. If one person has been out of the family residence for a period to time, they may need to go into the residence to refresh their memory in order to create their inventory. It is also helpful to identify items that either person may feel are their "separate property" (either owned prior to the relationship or gifted during the relationship). Also, if each person can identity the items they wish to retain and the items they do not wish to retain, often this can reduce the items that require discussion.
As to any items that require discussion, if after thoughtful discussion an agreement cannot be reached, when all else fails, a tried and true method that people can utilize is alternating selection until all items have been allocated. There are also creative ways to address some of the more emotional issues. For example, parents can create a sharing agreement that allows them to retain certain sentimental items related to their children with an agreement that the items "belong" to the children and will be returned to the children at some point. Photos, videos and artwork are also often a difficult issue. Today there are many ways to copy such items so that each person can retain copies of these items. At the end of the day your "stuff" is an important part of a separation or dissolution and should be treated thoughtfully.
Lissa Rapoport is a consensual dispute resolution attorney with offices in San Francisco and San Rafael.
Photo credit: Ann Buscho, PhD.
The simple answer is the inheritance belongs to the person who inherits it. It is their separate property. However, as with most things, this question is not as simple as it may seem.
Often inheritance comes in one form, say money, and is later used to purchase something else. Or, sometimes, it comes in the form of personal property. As an example, if your grandmother left you a piece of jewelry, that jewelry belongs to you and is your separate property. However, if you sell that jewelry and use the money to, for example, contribute toward a down-payment of a house purchased with your spouse - what happens then? Now the answer is not as simple.
During the course of a marriage, people often make choices as to how they want to use their resources, often focusing on the needs of their family or partnership. But, when it comes time to uncouple, they may rethink their prior choices. People may also change their intentions when facing a divorce.
If the inheritance was used to pay for living expenses, as example, that money is gone and unless you and your spouse agree otherwise, it would not be reimbursable.
If you take your inheritance and use it to buy something with your spouse, you may be able to ask for a reimbursement of that contribution--if you and your spouse can agree or if you can effectively "trace" the use of the inheritance through records, such as canceled checks, that show the trail of the inheritance. If you received an inheritance and you believe it was used to purchase something with your spouse during the marriage, the first step would be to review your records or obtain any records you don't have as soon as possible. This will help you better understand your concerns so that you can consider how best to approach this in the process of your divorce.
Lissa Rapoport is an attorney practicing in Marin County. You can learn more about her here: http://www.collaborativepracticemarin.org/members/Rapoport
Photo credit: Ann Buscho, Ph.D.
You made the very serious personal decision to terminate your marriage. This decision necessarily takes you to the procedure known as divorce (AKA Dissoluiton of Marriage in the Court).
You found yourself an attorney who discusses the different processes with you that can be used to divide assets and debts, set a child sharing plan, and set support. You say, “We don’t want to go to court – we just want to settle.”
The Collaborative Family Law model provides the most complete and efficient process to meet your goal. The hallmarks of the Collaborative Law divorce process are an agreement from everyone at the outset to exclude all court proceedings, and engage the services of various professionals, known as “the team” to assist in the resolution of all issues.
Why is a “team” needed? Why do we need a team just to get a divorce? If you don’t have any assets, income or children, then you don’t need a team and you can stop reading. If you do have any of these, I encourage you to continue.
ALL parties in a divorce in California no matter what process is used are mandated by law to exchange Preliminary Declarations of Disclosure. It means each side must provide in writing to the other a disclosure of all assets and debts. There is considerable debate regarding the extent and specificity required, but the goal of the law of disclosure is to adequately inform both sides before decisions are made regarding dividing assets and liabilities.
The main advantage to having one neutral financial person as part of a Collaborative team is that you deal with just one individual working to provide fair and accurate information to both parties in a divorce. Both parties provide financial information to the single financial expert. He or she verifies and organizes it, and reports the information in an understandable form to both parties and their counsel. Everyone is on the same page.
In comparison, in many “litigated” cases, a joint expert is not retained at the outset of a case, and after a great deal of increased animosity, distrust and anxiety, not to mention expense, the parties either reach the point of a joint expert or continue to battle each other with their own expensive experts – two instead of one.
Many times even the most sophisticated party in a divorce may be surprised to learn some information in the exchange. For example, husbands and wives can be wrong about how title is held on a property, whether something is community property or not, or the true value of a given asset. Clear, organized information such as this is essential to the parties in a divorce to reach reasonable and informed solutions.
The independent financial specialist also assists in determining the true income of both parties and the relative expenses for separate households going forward. Compensation packages for W-2 earners as well as the self employed have become increasingly complex with the proliferation of compensation such as Restricted Stock/Units, Performance Restricted Stock, Stock Options, claw back provisions, insider trading rules, irregular bonus payouts, profit distributions, 401K and profit sharing plans. Employment benefits can impact both asset division as well as ongoing income available for support. Self employed individuals often have unrealistic opinions of their worth or income.
The parties and their respective counsel need accurate, efficient documents and information in order to adequately educate and advise the parties as to the best solution and informed decisions for their particular case.
Even more important than the financial considerations in a divorce is the attention needed to preserve the best interest of the children. A child specialist can be the most valuable person on the Collaborative team.
First, the children need to be assured early and often that the separation of the parents is not the fault of the child. The child may be in need of therapy that neither parent is able to recognize or facilitate because of his or her own emotional upheaval. The child needs a neutral place to discuss his or her input and even vent, without fear of recrimination from a parent. Children of different ages have different needs and concerns.
All of this can be discussed with the parents and the child specialist in a safe and calm situation in order to reach a suitable, workable family child sharing plan. Every mental health expert agrees that continued animosity and conflict between the parents in divorce renders harm to the children from which they never recover. The Collaborative team, with the help of the child specialist, has the best chance of avoiding this tragedy.
If parents are unable to agree regarding the sharing of the children in a litigated divorce case in court, the family frequently undergoes a costly custody evaluation process and may have their own “expert” to review the work of the expert conducting the evaluation. Once again, you have the potential for three experts instead of one, as well as counselors and therapists, coming in at a much later stage of the proceedings after further polarization of the parties and damage to the children. The structure of the Collaborative team and process can “put everyone in the same room” from the beginning of the process.
Equally important to the team are the coaches for each of the adults. Divorce is one of the most emotional processes a person can go through in a lifetime. Everyone can use assistance from time to time for insight and balance while dealing with the inevitable feelings of loss, uncertainty, fear, anger and overall anxiety. Your attorney is not a psychologist. It is the duty of the attorney to maintain as much objectivity as possible in order to advise the client in the decision making process, and the individual coaches are a tremendous assistance in facilitating the parties to reach resolution.
With a professional Collaborative team in place from the outset of a divorce, you will be provided information, organization, support, advice and assistance for the entire family in the transition process for the best possible solutions. Otherwise, you may end up with a team or two anyway, but in a courtroom instead of a conference.
Win Heiskala is a family law attorney in San Diego. She graciously allowed CPM to repint her blog piece, and can be contacted at http://www.blsapc.com/
photo credit: Ann Buscho, Ph.D.
Divorce is a painful time no matter whether you are the one to initiate the process or you are the one who is reluctantly dragged through the process. You and your spouse together have the choice of how to go about ending your marriage and moving into a better space. The following are three ways to feel you have control of the process and its outcome.
One of the tasks that must be solved by couples going through a divorce is how to divide their assets and debts. A marriage is viewed as a partnership where whatever either spouse earns or creates during the marriage belongs to both. Income, including bonuses, stock, and retirement contributions, and assets, real property, savings and investments, as well as financial obligations, that are acquired during the marriage as a result of either spouse’s labor, skill and efforts, ie employment or self-employment, are called community property, equally owned by both spouses. Assets or debts owned prior to marriage, or received during marriage as gifts or from an inheritance, are called separate property. If assets were purchased during marriage using community and separate funds, there would be a community and separate component interest in the asset. How title, if any, is held could affect the percentage. Should a spouse work during marriage to increase the value of separate property, a portion of the increased value might be viewed to be community property to compensate the marital partnership for that spouse’s time. After separation, income becomes separate property but is available for child and spousal support payments.
For couples who choose to use a litigation process to divide their assets and debts, their community property will be divided equally and separate property will be fully retained be the owning spouse. A court does not have the ability to take into consideration the interests and needs of the family or their specific financial circumstances which might warrant a different division. The advantages of using a consensual dispute resolution process, such as Collaborative Practice, is that a divorcing couple is not bound by this narrow formula. Instead, spouses work together to consider multiple possibilities for the division of their community and separate assets and debts. With the assistance of a neutral financial professional, the various options are tested for viability and determined if realistic. They then have the opportunity to select a settlement package that provides benefits for each spouse and their children. The goal would be to achieve a mutually acceptable durable solution.
Susan Stephens Coats is a collaborative family law attorney in Marin and San Francisco
photo credit: Ann Buscho, Ph.D.