Turning your Divorce Settlement into Dust
“Who do you believe about what is a fair property settlement?”
Henry says this was one of the hardest things he had to decide when he got divorced. He got lots of advice, as you probably have too, if you’ve been separated.
Henry saw a couple of lawyers in the early days of his separation, mainly to educate himself about what was reasonable in his case. He also wanted to be “……not just fair. I actually wanted to be generous to Anna and the kids. I knew I would be OK, but she was terrified and didn’t earn all that much”.
Henry did what he thought was right, and made an offer to Anna that was higher than any of the lawyers had suggested. He offered Anna 70% of the assets. On Henry’s offer, Anna would have got the house valued at $3,000,000 and $500,000 cash, and he would have kept the business and some cash, totalling $1,500,000.
What did Anna say to Henry’s offer?
Like anyone else in her position, Anna went to see a lawyer for advice. But sadly, that was when the seeds of mistrust were sown for Anna. The house and business valuations were challenged, Henry’s generosity was derided, and after three trips to court and eighteen months of conflict and heated exchanges between the lawyers and Anna and Henry (and yes, often in front of the kids), what Anna got was $2,300,000 and Henry got $1,600,000.
Anna was $1,200,000 worse off, and Henry was $100,000 better off after the court case. Ridiculous? You bet.
So where did the money go? It turns out that the valuation Henry had placed on his business was overly generous, and added to what was paid to the lawyers ($600,000), the pool had shrunk and the house had to be sold.
And the lesson is? Certainly not to avoid lawyers and legal advice, but to see the right kind of lawyers. Those who can think in terms of co-operation, not those whose default position is suspicion and cynicism. It is more than possible for anyone, including lawyers, to balance their job with a sense of proportion and an ability to build common ground rather than create division.
Both Anna and Henry’s rights to proper information and valuations could have been protected without the fight that cost $600,000. If the financial information had been collated in an atmosphere of co-operation, Henry’s original intention to be generous might have been sustained.
As it was, says Henry, “After the way she behaved, I’ve lost all pity for her. I get that she didn’t want to be married to me anymore, but I’ll never get why she thought I would turn into some kind of ###### and rip her off”.
And Anna? “All I did was what I was told. I had no idea about the business. My lawyer told me that the valuation was probably wrong, and that Henry was not as generous as he was pretending. I didn’t know we had to go to court about all of that, and it’s just dumb for Henry to blame me. After all, I’m the one who lost all my money”.
And the kids, Billy and Tash? Well, the house with the pool has been sold, they’ve changed schools, and their parents are mad at each other. Not the greatest outcome is it?
So how could Anna have found the kind of lawyer who would look after her, but not create a war that caused lasting animosity with Henry?
Lawyers who can do Law and Peace. Ten Tips:
• Ask the lawyer about their training in negotiation, mediation or collaboration. If they have none, run;
• Tell the lawyer what you value and what you want to preserve, and ask if they can work with that;
• Talk to the lawyer about what you most fear, what your goals are and see if they can talk about more than “the law”;
• Ask yourself, “Does this person get me?”;
• Remember that tough talk can feel good, but you have to live with the consequences, the lawyer doesn’t;
• Ask the lawyer if they like going to court;
• Follow your gut instinct after the first meeting;
• Be prepared to see more than one lawyer to decide on the fit;
• Ask a friend, relative or colleague;
• Ask your GP, accountant or psychologist.