Emotions have the potential to derail any settlement discussions, particularly in the context of divorce. This is one reason our law firm favors a collaborative approach to divorce. By working out issues in advance, a divorcing couple can present these proposals to the court for approval and minimize their time and expense.
Is Collaborative Divorce Akin to a Business Negotiation?
Interestingly, a recent article compared divorce settlements to business negotiations. True, there are tax considerations. For example, a party may initially want to retain their family home for sentimental reasons. However, a good attorney will provide counsel that addresses both the short- and long-term implications. In this example, our counsel would calculate the property taxes and weigh that ongoing expense against any settlement offer.
A business approach to divorce might also benefit the subject of alimony. If the spouse paying this support cannot claim it as a tax deduction, he or she may need additional incentive. A recent article recommended putting such payments into a grantor trust, where the receiving spouse is liable for the taxes on its distributions.
Children Are the Wild Card
The one exception to this business analogy is children. Our law firm believes that both parties will benefit when the best interest of the child is advanced. This view reflects not only our values, but also the view of the court. Thus, if staying in the family home would provide more continuity through a time of transition to the children, both parties may consider viewing the property taxes as an ongoing cost of their child care, rather than simple an asset to be divided in property division discussions.
Source: The New York Times, “4 Tax Strategies That Could Make a Divorce Settlement Easier,” Paul Sullivan, Apr. 19, 2019