Monday, May 3, 2010

Settlements: Curb the Enthusiasm

For most people going through a divorce, the concept of someone being overly generous in settlement just doesn't compute. Most of the time, each side fights to get their fair share of the assets. What often happens in litigated divorces (in contrast to Collaborative divorces) is that each party stakes out opposite positions and usually makes extreme demands for settlement. That usually leads to protracted fighting, unhappiness on both sides and high attorney fees.

Sometimes, though, while one side is anxiously figuring out how to end up with at least enough to meet their minimum needs, the other side starts making concessions and ends up being incredibly generous. There are several possible reasons for the generosity:

  • Guilt. The most common reason is that one party feels guilty because of an affair or because of broken promises or because of how the decision to divorce affects the spouse and/or children.
  • Desire to be helpful. Although rare, sometimes a party has genuine feelings of concern for the other party and wants to make sure s/he is well taken care of.
  • Desire to finish the divorce quickly. One side realizes that if s/he is generous and gives in on most everything, there won't be anything left to fight over and the divorce can be granted right away. Similarly, not making the spouse angry means that the spouse may be more willing to sign off on a final agreement.
  • Hope that the parties will reconcile and get back together if a party is "nice" or "fair" to the other one. This occurs where one party is pretty much out the door (emotionally) when they tell their spouse that they want the divorce. The "leavee" sometimes will try to fix things by being generous and to show good faith.
  • Guilt. This is such a common reason that it's listed twice.
Sometimes, the strategies work, but sometimes they don't. When things don't work out well, there can be significant problems. Here are some cautions to keep in mind when developing your strategy for settling cases.

1. Be careful that you don't create a hardship on yourself by being overly generous. Be realistic. Don't assume that everything will go smoothly. Leave some "wiggle room" for yourself in case your circumstances change in the future.

2. When you want to be generous to try to win back your spouse, consider the fact that your spouse may have already found a new special person and may be ready to jump into a new and public relationship once the divorce is final. There have been many cases where a spouse took a generous settlement and immediately married someone else.

3. If you are in a hurry to start up a relationship with your own new partner, keep in mind that most rebound relationships don't last. Don't give away the farm just so you can be with your new heartthrob.

4. Just being generous now won't heal fundamental relationship problems between you and your spouse. To try to overcome past problems, you and your spouse need to start with a serious commitment to counseling.

5. If you have children, remember that both parents need to be able to be active parents with homes for the children. Giving all the assets to one parent really handicaps the parenting ability of the other parent. The kids need relationships with both parents.

The result in many cases from being overly generous in settlement is major regrets. How can you avoid that outcome?
  • First, approach this, as much as possible, as a business deal and look out for your own interests as well the interests of the other parties.
  • Second, listen to your attorney and develop options with your attorney to use in settlement discussions. Money spent on creating sound negotiation strategies is money well spent.
  • Third, think long term. Come up with a plan that makes sense for the long term. You have to be able to operate in the immediate future, but you should look beyond that and plan ahead.

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