Customizing Child Support

The Traditional Approach

Most, if not all, states now rely on formulas to calculate child support in a uniform manner for the child support cases filed within their state. In Texas, for example, our primary formula is 20% of net income resources for 1 child, 25% for 2 children, 30% for 3 children, etc. Some other states base their calculations on gross income. They may also use different percentages. Texas also has adjustments (different percentages) when there are children in different households and there are child support obligations in each household. There may also be variations from state to state about what deductions are permitted before the child support is calculated and about what resources are to be considered possible funds for child support.

Traditionally, one parent pays child support to the other parent each month, regardless of how much time the child spends with each parent.

In Texas Collaborative Law cases, we often explain how child support is calculated under Texas rules, and we can also look at other states' statutes, as well. BUT, we don't want the parties to feel like they need to follow the statutory formula of Texas or any other state. On the other hand, the parents should feel free to examine and consider the child support arrangements of any state.

New Ideas

To open up the discussion further, here are three other suggestions of approaches that parties might take in Collaborative cases, especially in cases where the parents end up with close to equal time with the child, a scenario that is becoming more and more common.

1. Split the difference. The parties each calculate how much child support he and she would pay under the Texas Family Code. Whichever parent has the greater income would pay to the other parent the difference between the two amounts of child support.

2. Pay half of the expenses. Some parties get along well enough that they can each pay half of specified expenses. Sometimes the list of expenses includes items the court would not, or could not, order, such as religious expenses or college expenses. Generally, parents can agree to share any expenses that they want to.

3. Pay a proportionate share. If there is a significant difference in income between the parents, they could agree for each to pay a proportionate share of specified expenses. For example if wife made $6,000.00 per month and husband made $3,000.00 per month, wife might pay 2/3 of the expenses and husband could pay 1/3 to match their comparative incomes.

There are obviously many other possible formulations for child support. The most important point here is that the parties should not feel bound or limited by traditional or statutory schemes for calculating child support. Spending time brainstorming at a joint meeting can lead to creative, flexible and satisfying child support arrangements.

The lesson to be learned: don't limit your options!

Getting What You Want -- First Ask for It

Today I saw the weekly newsletter that Francie Cooper, a local life coach, publishes. She also has a blog. The newsletter had an interesting article about the need to ask for something that you want. She says it's the first step in attaining your goals and meeting your needs. Asking for things is also a key part of the Collaborative process.

Asking for things occurs in two ways in a Collaborative case: first, in setting up their goals, the parties are identifying and asking for what they want; second, to get specific agreements, the parties themselves must ask for what terms they want. In contrast to litigation, the parties speak for themselves, rather than let the attorneys do the talking in negotiations.

Francie illustrated her article with two examples that also illuminate the Collaborative process. In one example, a woman wanted a specific kind of car at at specific price. In the other example, Francie's son figured out he needed more money for college than he had planned on. Each story had additional elements that also related to Collaborative Law.

• In each case, the person started off with specific goals.
• Each person followed up by gathering information and organizing it.
• The information was presented to the other party in the negotiations in a persuasive manner, the person asked for what she or he ultimately wanted and there was a discussion which lead to agreements.

It sounds much like Collaborative Law and shows that the basic structure is sound.

Litigation
One of the main differences between Collaborative Law and litigation is how Collaborative Law focuses on the goals of each. In litigation, where there's negotiation, it is usually positional bargaining instead of interest-based negotiation which is the basis of Collaborative Law. In litigation, in a property division discussion, most times the talk is about what percentage of the assets and liabilities each party will receive. Each side often stakes out an extreme starting position so that they can compromise and end up where they want to be. In other issues, there are more or less automatic decisions on some issues like setting child support and a visitation schedule. In each case, there's very little discussion.

Collaborative Law
By contrast, in Collaborative cases, the focus is on how to achieve various goals. Once the goals are established, the parties gather information and then go through a brainstorming process to generate options. After evaluating the options, each party asks for what they want to help meet their needs. Instead of automatic formulas to be applied, there is a genuine discussion that leads to an agreement. The parties must speak up for themselves and ask for what they want. There is a full discussion of the various options and the parties generally reach a conclusion that they are both satisfied with.

Is Collaborative Law Really Speedier Than Litigation?

Usually, it is, although it's hard to know. Comparing two litigated cases is hard to do because of so many different variables in each case: different judges, different emotional states of the parties, different facts, different histories of the parties, different motivations, and so on. Although people try to compare divorces all the time, the comparisons are not fair or accurate because of the differences in the cases. It's easy to find a few things the cases may have in common, but it's the differences than prevent the cases from being fair comparisons. For the same, and other, reasons, comparing a litigated case to a Collaborative case is inappropriate.

Having said that, I would still argue that Collaborative cases will usually be resolved sooner than the average litigated divorce that is contested. Collaborative Law cases would be counted as contested cases because the parties use the process to resolve issues that they have not been able to agree on.

Collaborative Law cases could take months and months to complete, if the parties want to take that long, but the "average" case will usually take no more than 4 or 5 months, and often, quite a bit less. In Tarrant County, and probably most large urban counties (except Harris, with the famed Rocket Dockets), it usually takes at least a year for a contested case to be resolved.

Nevertheless, a large number of Collaborators seem to end up feeling like their cases are taking forever to resolve. There are several reasons for that, even where the cases are resolved much more quickly than they would be in litigation.

• The parties to the lawsuit usually have no point of reference. The attorneys can easily imagine the amount of time that would pass as they experience the various routine stages of a contested, litigated case: filing, setting a temporary hearing, doing discovery, getting a scheduling order for all the usual steps, attending mediation and preparing for, and participating in, final trial. Attorneys know how long various steps take in litigation and what would be happening if the case were in litigation. On the other hand, the parties usually only know what they are experiencing in their case, so they don't realize that they are actually moving along relatively quickly.

• The face-to-face negotiations are sometimes much more stressful for the parties than litigation where the attorneys do most of the speaking and work. Although meetings are usually limited to a maximum of two hours at a time, the meetings can be tiring and emotionally draining, although they are not always so. Stressful events seem to take longer than enjoyable ones.

• Sometimes, the parties get bogged down in small issues and get frustrated. Experienced attorneys and a mental health professional will do their best to recognize the pace and the frustration and will try to keep the process moving forward. But, it will happen occasionally.

• Parties often get frustrated because they see just one solution to some problems and the professionals in the case insist that the parties discuss other possible solutions. Many people who agree to use the Collaborative approach have a hard time following the "Roadmap to Resolution" that is often used to create solutions that are acceptable to both parties. The Roadmap includes steps that involve creating or considering multiple possible solutions before choosing one for the settlement. Some people, having forgotten the Roadmap, get frustrated and start to feel that the process is moving at a snail's pace.

The parties using Collaborative Law should keep in mind that they are not in a race. A speedy resolution is usually not one of the goals they come up with at the outset. Most of time, the parties are more concerned with such things as creativity, customizing solutions, maintaining privacy, keeping control over the process and maintaining family relationships.
If you are in a Collaborative case and start to feel like the case is really dragging, talk to your attorney or the mental health professional (if one is being used) about your concerns. In all likelihood, they will tell you that the alternative is a much slower process in their experience. And they would be right!

Can You Use Collaborative Law When There's Been Adultery?

Yes. And it's interesting to see how differently adultery is addressed in litigated divorces and in Collaborative Law divorces.

Litigation

For the people who are just angry and want to fight for the sake of revenge or to punish their spouse, adultery becomes a convenient scapegoat to help blame everything on the other party. Even where there was no adultery, in some litigated cases, the spouse who thinks he or she was wronged still sometimes makes adultery allegations a central part of his/her case, despite a lack of proof. Unfortunately, we can't do anything about people operating contrary to facts, logic and common sense.

Sometimes, a party to a divorce becomes so consumed in punishing a spouse for marital transgressions that the divorce overwhelms the parties emotionally and financially. In one case involving an estate of about $200,000, the wife believed that her husband had a girlfriend. He denied it, but still offered 60-65% of the assets because he made a lot more than his wife did and he didn't want to fight. His wife refused and continued to fight. She fought for over three years, spent about $100,000 in attorney's fees, and she still ended up with about 60% of the assets.

There are cases where adultery undeniably has occurred, but that fact rarely makes a major impact on the divorce judge's decision, unless you happen to find yourself in front of one of the rare judges who puts an emphasis on it. The odds are against you making any difference in the outcome just because there has been adultery.

Collaborative Law

In a Collaborative case, the parties are focused on their goals and problem solving. In litigation, the focus is usually on what happened in the past, while Collaborative Law focuses on the future. Instead of rehashing past mistakes and bad behavior, Collaborators usually move on and try to find or create solutions. Many Collaborative cases have involved cases where adultery has occurred and both parties know about it. And those cases are almost always successfully resolved in the Collaborative process.

If a husband or wife is very angry and can't get over that to focus on his or her goals, then Collaborative may not be an appropriate option for that person. It does required some emotional maturity and getting past the anger stage of the breakup.

What can you do if you want to do a Collaborative divorce, but you are very angry?

• Get some counseling for yourself to manage your anger and move forward emotionally.
• Get counseling for you and your spouse. That can help both of you address common issues in a safe environment, prior to divorce negotiations.
• Let some time pass. Everyone goes through several stages of grieving during a divorce, not always in the same order. Over time, perspectives and feelings change. At some point, you will be ready to work on the divorce without being consumed by anger and a desire for revenge.
• Consult with a trained and experienced Collaborative lawyer who may be able to help you focus on goals that are more important than just retribution.

Don't be afraid to try Collaborative Law when there has been adultery or an affair in the marriage. There have been many successful agreements reached where the parties have been able to work together then and in the future.

Managing Finances in a Collaborative Divorce

There's a new Collaborative Law blog in Oregon, the Collaborative Divorce Northwest blog that is off to a good start. It looks like it will be an interesting blog to follow. They have a recent post that is worth reading on the difficulties many people have dealing with finances in a divorce. The article is by a financial planner who obviously has worked quite a bit in divorce cases. It looks like her experience is similar to that of our financial professionals who assist in Collaborative cases in Texas. That post got me to thinking about some of the financial hurdles people face in going through a divorce.

In a divorce context, people confront several problems in working out a post-divorce financial plan: lack of knowledge, lack of experience and fear of the unknown.

1. Lack of knowledge. It is very common for the spouses to divide up the responsibilities in the marriage by having one in charge of the finances and the other in charge of the household and children. In practice, there is usually very little discussion or joint planning in finances for most or a large number of families. As a result, one spouse is usually somewhat in the dark. That situation is made worse by the fact that finances are getting more complicated and even a college graduate may have trouble keeping up with finances without having everyday involvement. When a divorce comes up, the uninvolved party usually feels very vulnerable because s/he doesn't really know what's there or what should be there.

2. Lack of experience. To compound the lack of knowledge problem, the uninformed partner usually doesn't have much experience in managing the finances. Once the divorce is granted, each spouse will have to be responsible for running his or her own financial life. Even after learning what they have, a spouse who hasn't been paying bills or making investments or other financial decisions usually starts out very insecure in that role. The party needs to learn what to do and obtain some experience in managing things.

3. Fear of the unknown. Aside from all the personal and emotional issues involved in the split up of a family, there is a lot of fear and concern about what the financial future will bring. For the financially less-experienced spouse, it may be hard to look confidently very far into the future. Even for the more experienced spouse, the future may be daunting, especially in times of economic turbulence.

How Collaborative Law Helps

In more and more cases in Texas, we are using a team model which includes an attorney for each party and then a neutral financial professional (FP) and a neutral mental health professional, all of whom have special Collaborative Law training. The two neutral professionals work with both parties, rather than for just one party. The FP is well aware of the issues outlined above and is trained to help resolve them.

• The lack of knowledge is overcome by the parties sharing their financial information and then having the FP analyze and review it with both parties. We often prepare a joint financial summary and exchange documents so that everyone can see everything. The FP will answer questions for both parties.


• The lack of experience can be dealt with by having the FP educate and train one or both parties as needed about how to manage the finances in the future. Financial professionals often help the parties learn to budget and to keep track of their expenses. Parties can also learn how to streamline bill payment, how to save money in different ways and how to avoid unnecessary expenses. Most importantly, the FP is available to answer questions for the parties.


• The fear of the unknown can be mitigated by learning about the financial resources available and in making plans for the future that are tied to the goals each party established at the beginning of the process. There will probably be some concerns about the future, but the worrying can be reduced by having information available and learning new skills to control finances in the future.

Although not all problems can be anticipated, solved or prevented, Collaborative Law provides a great opportunity to manage financial issues that are usually left unattended to in a litigated divorce. Knowledge, learning and planning, facilitated by a neutral, trained financial professional, can help minimize future financial problems for the parties.

Abe Lincoln's View of Litigation

"Discourage litigation. Persuade your neighbors to compromise whenever you can. Point out to them how the nominal winner is often a real loser -- in fees, expenses, and waste of time."

Well before Collaborative Law was even a concept, Abraham Lincoln had strong opinions about litigation. He still makes a lot of sense about 150 years later.

Can't Afford to Divorce

It seems that more people are staying together because they really can't afford to divorce. A recent newspaper article from Birmingham, Alabama discussed the situation there. Although there is talk of that here in Texas, there have been no local in-depth surveys or studies. Nevertheless, the economy undoubtedly is having an impact. There are reports in Tarrant County that the number of new divorce filings is down. Here are some of the reasons why this is happening.

• Can't afford the cost of a divorce. Divorces are expensive for everyone. Of course, the cost is often related to amount of fighting going on, but even a minimal amount of legal work can be expensive.
• Can't afford to support two households. Doubling the house payment and utilities can be overwhelming when most people tend to live up to their income limits regardless of how much or how little income they have.
• Lost a job. There have been overwhelming numbers of workers who have suddenly lost their jobs recently. Certainly, a job becomes the top priority, and the loss of a job creates huge financial and emotional stress for an individual and a family.
• Lost retirement. While housing values are falling and people are losing their jobs, almost everyone who has retirement funds has suffered a substantial loss. It's the kind of loss that sends retired people back to work and puts off retirement for others. When you start talking about dividing up some significantly reduced retirement accounts, there may not be much retirement left after divorce.
• Can't sell the house. It used to be that retirement funds and house equity were often the biggest assets of couples. With retirement funds shrinking, there's just not much left for some people because house values have also gone down and it has become much harder to sell and house.

So what's a person to do if he/she wants a divorce?

• Consider staying together. Get some counseling and work together on common goals. Don't expect overnight solutions, but the greatest value may be staying together if both parties commit to working on solving their problems.

• Try Collaborative Law. The problems outlined above call for creative solutions. The standard approach of dividing everything down the middle may not be appropriate or leave the parties with enough to get by. Following the Collaborative problem-solving process, starting with analyzing each party's needs and goals, a couple can be guided to to some creative solutions to adapt to the financial reality. In Tarrant County, and most of Texas, we utilize a mental health professional and a financial professional to help the parties and that improves the outcomes for the parties.

• Borrow funds. If divorce is necessary and urgent, maybe the best course of action is to borrow the funds to pay for it. You can approach family members or maybe you have credit somewhere that you can use. Remember that you will have to pay back the borrowed funds, so spend your money wisely. Investigate whether you think it will be more to your financial advantage to take the litigation approach or to use Collaborative Law. Be sure to discuss your situation with a trained Collaborative lawyer before you decide.

• Just wait. It's sort of the opposite of the Nike slogan. If you can't afford to divorce, if you can't borrow funds and if you can't figure out how a Collaborative divorce could save you money, then maybe you should wait.