Planning for an Amicable Divorce

Planning for an amicable divorce is easier than the alternative but it still does require planning.

Too often, I hear spouses decide to walk into a mediator's office (or someone who calls themselves a mediator) and figure things out as they go along. That is not planning. That is a complete failure to plan.

Here are some tips for those spouses who believe their divorce will be amicable. We will first talk about those amicable divorce that are mid-sized estates. Then, we will discuss amicable divorce for higher valued estates.

Planning for an amicable divorce with a low to mid-sized estate

A mid-sized estate usually involves a home, vehicles, retirement accounts, bank accounts, life insurance policy and sometimes, additional assets such as a small business, brokerage accounts and a moderate amount of debt.

A typical mid-sized estate may have several hundred thousand dollars in equity within the family residence, one or both spouse's annual income in the $100,000 to $300,000 range and liquid cash in bank and brokerage accounts of $50,000-$250,000.

Mid-sized estates also have retirements, the value of which depends in large part on the length of marriage and the retirement plan.

1. The California county does make a difference when determining the estate size

We of course understand a mid-sized estate may have a very different meaning to different people and especially depending on in what California County or city the spouses reside.

Regardless of what range a mid-sized estate may fall into, an amicable divorce will keep the spouses out of court and instead keep them negotiating in good faith to resolve issues.

To that end, here is what the spouses should focus on.

2. Should you and your spouse hire a mediator?

Many spouses who seek an amicable divorce believe hiring a mediator is the best way to go. Sometimes, that is true. Sometimes, it is not. First, any mediator the spouses hire should be an experienced divorce attorney.

The spouses will benefit if their mediator also has significant divorce litigation experience. An experienced litigator can provide spouses with a much more realistic perspective on what may happen in Family Court if the spouses are unable to resolve the issues.

Such an experienced divorce attorney can also provide a clearer perspective on how family law judges may make a ruling on the issues.

While there are some good divorce mediators who have never seen the inside of a courtroom, we believe the better ones do have many years of past or ongoing litigation experience. A retired family law judge is also a good choice.

Should you hire your own independent attorney even if you hire a mediator?

In addition to hiring a mediator, the spouses should each have their own independent attorney. You may wonder why you and your spouse may need your own independent attorney if you agree to use a mediator.

Contrary to what many believe, the mediator usually does not give legal advice. In addition, that mediator cannot advocate either spouse's position.

The mediator helps spouses come to a settlement agreement but is often not there to protect either spouse or even advise a spouse if a position he or she takes is not wise.

Many mediators look at their role only as an intermediary

While they may generally discuss California divorce laws with the spouses, if spouses do not conduct their own due diligence and do not retain independent counsel, one or both of them may enter into settlement agreement that is inconsistent with what a family law court would do. It may also be inconsistent with what the law states and that may unknowingly leave a lot of money on the table.

It is best to hire your own independent lawyer

That is why the best divorce mediators strongly suggest each spouse retain their own independent lawyer to review any proposed agreement before the spouses reach an agreement and well before they consider signing it. The better mediators also prefer to have independent counsel for each spouse involved throughout the mediation process to advise them every step of the way.

We believe mediators who dissuade spouses from retaining independent counsel not only do the spouses a great disservice, but may engage in conduct that makes them culpable for not giving the spouses that option within the mediation process.

3. Full disclosure is a must in any divorce, including one that is amicable

There cannot be a true amicable divorce unless the spouses provide full disclosure of all assets, debts and liabilities as well as income and expenses. Spouses who are unwilling or claim they are unable to provide full disclosure regarding assets, debts, liabilities, income and expenses are usually hiding something. That has no place in an amicable divorce.

Learn more about the consequences of lying on an income and expense declaration.

4. Should there be temporary agreements while the divorce is pending?

Even under the best of circumstances with spouses cooperating with each other, an amicable divorce can still take several months before it is complete.

That is because California has specific laws regarding disclosures and that includes each spouse completing a preliminary declaration of disclosure and exchanging it with the other spouse. This declaration of disclosure includes a schedule of assets and debts and an income and expense declaration, as well as other forms.

The bigger the estate, the more complex these disclosures get

Until the spouses serve disclosures and everyone has fully disclosed everything, it is difficult to enter into good faith negotiations regarding division of assets and debts.

In addition, until the spouses disclose to each other income from all sources as well as expenses, it is challenging to come up with a child and spousal support number.

Reaching an agreement on temporary support is exactly what some spouses need to do while they go through an amicable divorce. Before the final divorce judgment, one spouse may need continued financial support.

That may be child support, spousal support or both. In addition, if the spouses decide to live together during the divorce, there should be an understanding about how day-to-day expenses are paid. All of this requires dialogue.

It does not have to be complex or highly stressful

If you properly prepare for an amicable divorce, you resolve such issues through that diligent communication and cooperation. Your attorney as well as the mediator can also help guide you to a reasonable temporary agreement while the divorce is pending.

Planning for an amicable divorce in higher assets cases

Higher asset cases can range from estates that are worth $2 million to estates that are worth 20 times that amount. Similar to mid-sized estates, the term high asset means different things to different people.

Everything we wrote about mid-sized estates applies to higher asset estates but there are a few additional items to keep in mind when planning for divorce.

1. Self representation is an awful idea so do not do it

We believe it is extremely foolish for husbands and wives with a high asset estate to represent themselves through a mediation process.

While we believe independent counsel is necessary in every case to some extent, a high asset estate that usually involves complex financial, estate planning, tax and related issues, makes an experienced and knowledgeable independent counsel a must.

2. Retaining consultants or experts may be unavoidable so be be very open to doing it

Higher asset estates also usually require an independent forensic accountant or accountants depending on whether the spouses want to hire a joint expert and/or have their own independent expert accountant.

Such estates also often need advice from a tax professional and estate planning professional. The tax professional may be a certified public accountant or a tax lawyer. The estate planning professional is usually an experienced estate planning attorney.

What is the role of "status quo" when planning for an amicable divorce?

Knowledgeable divorce attorneys often speak about "status quo" and the importance of maintaining it while the divorce is pending. That means keeping things as they are without significant changes during the divorce.

For example, unless both spouses give informed consent, one spouse should not sell assets or make significant changes to insurance policies. To do so may financially harm the other spouse before there is a final adjudication of the estate.

Maintaining the status quo is more important in higher assets cases. This is especially true if one or both spouses own a business or have significant funds invested in the market. Sudden changes or sale of assets could have an irreversible, negative financial impact on the marital estate.

For these reasons, as part of the divorce planning, spouses should have dialogue about the status quo and whether there needs to be any change in its status and maintenance.

Learn more about Standard Family Law Restraining Orders.

Planning for an amicable divorce requires proactive preparation

No matter what the size of the estate, planning for an amicable divorce requires proactive preparation.

"Reacting" to the situation can leave you unprepared and exposed to life changing mistakes. The larger the estate, the greater those mistakes may become.

There is no substitute for legal advice from and representation by an experienced California family law attorney. We believe good men and women deserve great family law representation. Contact us for an affordable strategy session.

Ready to learn more? Check out the links below for more articles on planning and preparation.