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June 2016 Archives

Financial Infidelity Can Lead to Divorce

It goes without saying that marital infidelity can lead to the breakdown of a marriage. But adultery is not the only type of infidelity you have to worry about - there is also the notion of financial infidelity.
Financial infidelity basically means to lie to your partner about finances. And it's a growing trend, according to a Harris Poll for the National Endowment for Financial Education. Two out of five Americans admitted to lying to their spouse about financial matters.
Financial infidelity can be anything from a little white lie to full-blown hiding of a significant amount of assets or debt. Sometimes it can be for a good reason, like saving up for a surprise family vacation. But often, the reasons for lying about money are more malicious, and this type of deception, when discovered (when - not if), can lead to enormous trust issues that may culminate in divorce.
What Are Common Types of Financial Infidelity?

Collaborative Law

The Collaborative Law is where two parties and their lawyers sign a binding agreement stating that the only purpose for the lawyers' representation is to help the parties use creative problem-solving aimed at reaching a negotiated agreement that meet the needs of both parties. In the collaborative law process, the parties agree that no one will threaten to, or engage in litigation to force compromises. The parties still have a right to access the court system, but if they do, both lawyers are automatically disqualified from representing either of the parties in the case going forward.
The important points of the collaborative process are:
1. Full, voluntary, early disclosure of all facts and information necessary to come to an agreement
2. Both parties voluntarily accept that they have a fiduciary duty to each other
3. Both parties accept that the goal of the process is settlement with the understanding that each party fully participates and treats each other with respect.
4. Transparency of the process. In other words, nobody tries to hide assets or important facts.
5. If experts are needed, only one joint neutral expert will be hired.
6. Both parties commit to try to meet the legitimate goals of each party, if at all possible.
7. No threat of litigation
8. All lawyers and experts are disqualified from participating in any legal proceeding between the parties outside the collaborative law process.
9. Using four-way settlement meetings to communicate goals and needs and to negotiate a settlement. 

Who Should get the House in a Divorce?

Deciding who should get the house at the end of a divorce is not only a financial but also a very emotional decision. On one hand, there are emotional benefits to keeping the house,especially if children are involved. On the other hand , the house is often the couple's most valuable asset. If there is equity in the house that equity is community property (assuming the house is community property) and this equity should be divided between the parties. If you get the house with all the equity, it could mean that you get nothing else. It could mean giving up retirement, cash and other investment accounts. This is a decision that should not be made lightly.
Another thing to consider is: can you afford the house? In other words can you afford the mortgage payments and the cost of the upkeep? It is important to look at what your monthly income and expenses are going to be after the divorce is final.
Maybe the best option is to agree to sell the house and split the proceeds. Or maybe one of the parties might be able to re-finance the mortgage in a way that he/she is able to get some cash to give the other spouse his/her share of the equity in the house.
There are also times when it is more cost effective to keep the house: for example if the mortgage payments are lower than the cost of paying rent. Sometimes people find themselves in a situation where the house is not worth as much as the total mortgage debt. In that situation the parties would have to pay the difference to the bank in the event they sell it.
All of these factor should be considered before deciding whether to try to keep the house. 

What is the Difference Between Arbitration and Mediation?

Both Mediation and Arbitration is called Alternate Dispute Resolution which means that they are both a way to avoid a formal trial before a Judge. Both are ways for litigants to retain more control over their case and over their lives.
In Arbitration, the parties hire a private judge to hear their case. There are many ex-judges who can be hired to do either mediation or arbitration. Arbitration can usually allow the parties to finish their case quicker than if they are litigating in the traditional court because the parties, not the court, decide when to schedule the Arbitration. Arbitration is usually a less formal trial than a traditional trial before a District Judge. Often the Rules of Procedure and Evidence are more relaxed, thereby making the trial go faster. Before the date of the Arbitration Hearing, the parties will agree on the rules of Arbitration and will sign that agreement before the Arbitration starts. In Arbitration, the parties' attorneys present evidence and information to the Arbitrator and at the end of the Arbitration hearing the Arbitration Judge has the power to make a final decision in the case. That final decision is binding upon the parties just like if there had been a trial before a District Judge.
In mediation, a trained mediator acts as a neutral third party to help both parties negotiate a settlement. The mediator will often help the parties come up with different options to help with the settlement of the case. A mediator does not have the power to make a final order or make a final decision in the case. The case is only over once both parties have come to an agreement regarding the contested issues. Often there are many offers and counteroffers exchanged between the parties before a settlement is reached. If the parties do come to an agreement, they along with their attorneys will sign the agreement. This is called a Mediated Settlement Agreement. Once all parties and all attorneys have signed the agreement, the mediator will sign it too. Then the agreement will be filed with the court and once the agreement has been filed with the court it is nearly impossible for either party to change their mind. The agreement is irrevocable. 

The Changing History of Parental Rights

The way we think about parental rights have changed and evolved over the ages. In Roman and English common law during the early 1800 children were viewed as their father's property. The father had the duty to protect, support and educate his children. Therefore in the event the parents separated the custody of the children always went to the father.
This paternal presumption changed in the late 1800 and was replaced by a presumption that the mother is better suited to care for children under six years old. This was called the "tender years doctrine." So, in the event the parents split, the children would live with their mother until they turned six years old. Once they turned six, they would be returned to the fathers. One reason for this change could be the start of the industrial revolution. During this time men were more and more likely to seek work outside the farm or village where they lived. That left the women to stay at home and take care of the children.
In the 1920s the maternal presumption in both American and English law was expanded even further. Mothers were thought to be more suited to raise and nurture children, regardless of the children's age. In the 1930's the maternal presumption was further strengthen with Freud's psychoanalytical theory, which focused exclusively on the mother-child relationship and completely ignored the father's role in a child's life.
The theory regarding custody of children was changed in the 1970's when the "best interest of the child" standard was substituted for the maternal presumption. One of the reasons for this change was that fathers complained of gender discrimination. The feminist movement could also have been a factor in the change of focus, as more and more women entered the workforce.
Today there is a movement by some people to change the law to allow for parents to have equal amount of time with the children. This would essentially do away with the current state of the law where one parent is the "custodial parent" with the right to have possession of the children at all times except for the possession schedule given to the other parent. 

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