5 essentials for
separation and divorce
the MELCA way.
A gr
ound br
eaking eBook
by T
ricia Peters & Marguerite Picar
d
Separation is an emotional crisis, with legal and
financial consequences, not the other way around.
Divorce and separation can be one of life’s most difficult experiences. If you are separating
or thinking about it, you are probably feeling overwhelmed about the changes and the
major life decisions you face.
In this book, you can learn about how to take care of yourself now and how to create your brightest future, by choosing interdisciplinary collaborative practice to reach agreements at the end of your relationship.
Interdisciplinary collaborative practice is about making sure that all members of your family are in the best shape possible after settlement. It is not about winning and losing. It is about being supported to reach agreements that work best for you and your whole family. It helps you to manage the present, and to focus on the future.
Most people think that the first person to talk to when they separate is a family lawyer. But who will look after your emotional wellbeing? Who will help your children with the separation? Who will give you the financial advice you need? An interdisciplinary team including family consultants, psychologists, children’s experts and financial planners, will help with these jobs.
If you are separated or thinking about separating, you probably have many questions
running around in your head such as:
◊ How can I separate without ruining my family?
◊ How do we tell the children?
◊ Will our kids be OK?
◊ What can I do to protect the children during our separation?
◊ How can I survive financially after separation?
◊ Who pays for our children’s expenses in the future?
◊ How can I negotiate a settlement that is going to work for both of us?
◊ Do I have to make all these decisions now?
◊ Can I survive the end of my marriage and still feel good about the future?
There are different ways you can reach agreements, and the one you
choose will have a big impact on how well you and your family survive
separation and divorce.
In interdisciplinary collaboration,
you’ll benefit from working not
only with your lawyer, but with a
psychologist/family consultant,
child psychologists and financial
planner, as a small team
dedicated to looking after you
Contents
1. Amicable separation and divorce
4
2. Emotion and separation
8
3. Children and separation
10
4. Money and separation
14
5. Legal matters
18
Amicable separation and divorce. Is this right for you?
The way you separate will have a huge impact on your financial future, your wellbeing and
that of your kids.
Real MELCA divorce stories
from real people...
‘There are times in collaborative meetings
when I have thought that a comment from
my client’s spouse was a continuation
of the old patterns that my client had
described to me. If I had been the person
to address that, the spouse may have
felt under attack, no matter what words I
said, or how I said it. In that situation, the
family consultant who is neutral, has the
permission of both clients to be the one to
step in and re-balance the meeting. It is a
very powerful role’ - Collaborative Lawyer.
1. Meet the professional team 2. Work on your goals for the future
3. Identify what emotional support you have or might need
4. Focus on what your children need
5. Collect information about what you own and what you owe
6. Gain an understanding of what your financial future will look like
7. Participate in meetings to reach agreements 8. Sign legal settlement documents
What is collaborative practice?
This is very different from any other settlement process – you are able to focus on the things that are most important to you and reach agreements that are meaningful for you and your family and be supported every step of the way.
If you want to:
◊ stay out of court
◊ get the best for your children
◊ have a good relationship with your children
◊ have a co-operative parenting relationship with your spouse
◊ avoid confrontation
◊ understand how to manage conflict
◊ focus on the future and not the past
◊ reach an amicable and fair settlement
◊ know what the future holds for you
◊ be sure that you make the best of your assets
◊ pay fees that reflect value
then collaborative practice is the best choice for you – read on.
The steps involved in
a MELCA divorce
The team
In collaboration you and your spouse will work
with a small team. You will not go into battle.
You will go into recovery and healing.
The team may consist of a Lawyer for each of you, called a ‘Collaborative Lawyer’, a psychologist/couples counsellor, called a ‘Family Consultant’, a child psychologist, called a ‘Child Specialist’
and a financial planner, called a ‘Divorce Financial Planner’. Each member of the team is an expert in their own area and has worked with hundreds of families going through separation and divorce. Having the right person with the right skills working with you on your agreements will actually save you money.
A relationship breakdown is like a medical crisis where you might have a GP, a specialist, a surgeon, an anaesthetist, a nurse, a radiologist, and a physiotherapist, amongst others. Each professional does a different job, either preparing you for the surgery, working in the operating theatre or assisting with your recovery. They all play an important part in eliminating your illness and your return to good health. Similarly, having the different collaborative professionals do the work they are skilled at, at the right time, gives you the best chance of recovery after a relationship breakdown.
The team supports you in
your joint meetings
You will have private meetings with the professionals you engage. After careful preparation, you will attend joint meetings with your spouse, both lawyers, the family consultant and the divorce financial planner - the ‘joint meetings’.
Meetings are usually chaired by the family consultant, and they follow an agenda that you and your spouse agree on. The rules of conduct in meetings can be summed up by the word ‘Respect’. The aim of the joint meetings is to help you to get to the agreements that you need, about money, your children and anything else that you both decide on. Joint meetings are an opportunity for you and your spouse to hear each other’s perspective.
The team will recognise the emotions you are feeling in preparing and going into the joint meetings. You are experiencing separation for (usually) the first time; the team works with separating couples every day and are skilled at coaching and supporting you to manage your emotions and reactions, so that you can make the agreements and practical arrangements that you need. Most importantly, you and your spouse will make the decisions. They will not be made for you. Collaborative practitioners believe that you are the best people to make decisions about your life. You will be given all the help you need to do that.
About each of the team members
The team members are:
◊ Lawyers
◊ Family Consultant
◊ Financial Planner
◊ Child Specialist
Each member of the team plays an important role.
Having a team as part of your MELCA divrorce helps you to come to an agreement. A team makes sure you have all the information and support you
need to reach agreements – and it will actually save you money.
‘I was really nervous about this, and I
didn’t trust what I had been told about how
the lawyers work in collaboration. I was
suspicious of my husband’s lawyer, but
at the first meeting, she looked at me and
asked me if a suggested arrangement was
ok for me. She was sincere, and I relaxed a
lot, and have felt so safe and supported in
every meeting since then’
Real MELCA divorce stories
from real people...
Lawyers (of a new and different kind)
You both have your own divorce lawyer in collaboration. These lawyers have undertaken significant training and education to work collaboratively instead of working as warriors. They know where the Family Court is, they just know better than to go there.
Your story is important and before you start negotiations your lawyer’s job is to hear your story and to learn what is important to you. He or she will help you to describe what you would like to achieve and will support you to have a clear voice in joint agreement meetings.
In collaboration, your lawyer
will meet with you privately, go to all the joint meetings with you, be your supporter, and help you to express what you have to say about what you need and want in an appropriate way. Your lawyer will also give you legal information and advice. Most people do not want to end up hating their former partner. However, this can happen when your settlement is negotiated in the shadow of the Family Court, or ends up in Court. A collaborative lawyer works in a very different way from how lawyers traditionally work, which is to focus on getting a win for their client. But a win for one person means a loss for the other - in the end nobody really wins. Often neither person is happy with the settlement, and the truth is that the court system delivers many decisions that nobody is happy with, and some decisions that on any assessment are just plainly wrong. It costs a lot of money. Nobody is looking out for your kids. Nobody thinks about how you will get along as parents or as former partners, when the war is over. Even amicable relationships can turn sour as a result of traditional legal approaches.
Your collaborative lawyer will help you to understand that there are always two perspectives. Your spouse’s perspective will probably be different from yours, about some things at least. Understanding each other’s perspective is one of the keys to reaching agreements that you can both live with.
Your lawyer will write the usual legal documents when agreements have been reached, and give you all the usual legal advice at that time.
Divorce Financial Planner
The divorce financial planner is there to help both of you. They do not side with either of you, but offer a balanced voice. They are neutral. They will spend time with you separately and together. They will attend joint meetings with you as needed. They will work with you to understand:
◊ your budgets
◊ what you own
◊ what you owe
◊ what your financial future will look like
◊ how you can make the most of the resources your family has
◊ the pros and cons of the different settlement scenarios
The financial planner helps give meaning to the financial information by assessing your overall financial position, looking at how your family has spent money in the past and how the future can be financed. By looking at parent’s and children’s budgets, the divorce financial planner will assist you to get an understanding of the resources you need to look after yourselves and your children.
It is quite common for one partner to have a greater understanding about the family’s finances than the other. The divorce financial planner acts as your financial coach in the collaboration and helps you and your partner to build your knowledge and confidence about your finances so that you can both make informed decisions about your settlement. The financial planner will help to make sense of the numbers so that you are able to understand what is possible for your future. They can help generate financial settlement options and prepare financial projections to show what the various options would mean for both of you.
Real MELCA divorce stories from real people...
‘The financial planner made all the difference in our case. It was
her work that really turned it around. Our goal was to provide for
the kids and to minimise the changes they would have to make
due to the separation. After working on the budgets with her, I
got that it was not about what I was paying to my ex-wife, but
about what the children cost. When I had someone to help me
look at the figures, I realized my ex-wife was actually a really
good financial manager. That meant I could get over the money
thing being about me ‘having to pay the ex-wife’. Without the
financial planner I would never have seen the reality of the
situation, and my ex-wife and I would have argued forever.’
INFORMATION
PERSPECTIVE
AGREEMENT
You can get a fair legal settlement without going to Court.
Family Consultant
The family consultant understands the emotional and psychological issues of separation - for adults as well as children. They specialise in coaching for effective communication to address power imbalances and conflict management. They work to make sure communication between you and your partner is effective. The family consultant is there to help both of you and does not side with either of you. They are neutral. They will spend time with you separately and together throughout the collaborative process. The family consultant helps to prepare you for the negotiation meetings, and to bring your ‘best self’ to the meetings, which can be very difficult when you are struggling with the emotional impact of separation.
They help you both to understand the intense emotions that you are experiencing and what support you need to be able to manage your emotions so you can negotiate effectively.
Child Specialist
The child specialist is there to help you understand what separation is like for your children, to help you to speak with your children about your separation, and how to respond to their needs during and after separation.
The involvement of the child specialist begins with meeting you both and hearing about your children. They will then usually meet with your children to hear from them about any concerns they have and their perception of the separation. This is not therapy or asking your children to make decisions. It gives kids
an emotionally ‘safe place’, where they will be listened to and not judged. Children are inclined to tell both parents what they think that parent wants to hear. They love and will want to protect you both. Children don’t want to be asked to make decisions about the place they live and the time they spend with each parent, but they do want their parents to hear what’s important to them. After talking with your children, the child specialist will meet with you both to share what he or she has learned about what’s important to your kids.
Having a child psychologist on the team brings your children’s
voice to you and into the Parenting Plan so that when making decisions about living in two households, you both know what your kids special concerns are. The child specialist is someone who you and your children can ‘check in’ with in the months and years after separation. They can guide your family when changes happen, reassure you about how your kids are doing, and make suggestions if things are not going so well.
Parenting plans are like a new pair of shoes; they need to fit well now
but have room for growth.
Real MELCA divorce stories
from real people...
The family consultant helped me to see
that if I continued to speak to my partner
in a blaming way, he would continue to
respond angrily. She suggested different
ways of expressing the things I wanted
to say. It was a nice change to get a civil
response from my ex. I can see that this
is going to help me when we have to work
things out for the kids in the future.
Real MELCA divorce stories from real people...
‘At first it was funny talking to her (the child specialist), but she liked Mum
& Dad and I told her about my little brother and my teacher Miss N, and
she told me about other kids who come to see her, and she is going to tell
Mum and Dad about me being allowed to sleep at two houses and going to
swimming lessons with (friend). And I think I’m going to get a pet rabbit.’
melca.com.au | 9078 6980 [email protected]
Emotion and Separation
Separation is a major life crisis, and it can be like a roller-coaster ride that you didn’t buy a ticket for. It is important for you and your children that you look after your physical and emotional health.
Grief and Loss
It is normal to experience grief at the end of a relationship, even if you are the person who has decided to finish it.
Ending a relationship brings emotions just like a death. It’s all about loss- loss of the dream, loss of what you thought and hoped your future would be, as well as loss of the actual person.
Grieving emotions include anger and sadness. But there are more complicated ones like disbelief and bargaining where you don’t really believe what is happening.
Relationship breakup includes two people (at least) and often the two are at different places in their emotions. This is often described as ‘stages’. One person could be in ‘denial’ and the other person further ahead in ‘acceptance’. This is often linked to whether one person made the decision rather than it being mutual. The person deciding to leave or end the relationship may be a long way ahead emotionally of the other person, as they have had a longer time to think about and accept that the relationship is over. For the person who feels they have been left, it may come as a big shock and it may take many months for that person to accept that the relationship is over and be ready to negotiate a settlement.
Depression
‘Depression’ is often used to describe sadness and feelings of loss. These are common emotions after separation, but if you feel this way for long periods, very intensely, and if they start to interfere with your work you may need extra help. Your counsellor, psychologist, psychiatrist, doctor or trusted person can help you.
Emotional readiness to negotiate
There is more to negotiating a Parenting Plan or Financial Settlement than creating a diary for the kids or a spreadsheet for your financial future.
To do this work you need to have survived the emotion of your separation. In ‘ordinary’ family law, nobody considers this, and you are not given emotional support in a way that is connected to settlement negotiations.
The Family Consultant understands the psychological and emotional impact of separation. They and the rest of your collaborative team monitor how you are managing emotionally and will give you the right support.
As you are in the midst of the ups and downs of separation and divorce, you are likely to find it very difficult to concentrate and focus on the business of negotiating a settlement. Advances in technology have enabled researchers to look inside the brains of people going through stressful situations. Research shows that our brains are not able to function normally when we are highly stressed. We are not able to think rationally or clearly and simple tasks that we once undertook without thinking are no longer achievable. This can be debilitating when we are used to functioning normally.
How well your grieving emotions are managed will determine how ready you are for the business discussions needed to sort out separation.
◊ Can you talk together without it getting out of control?
◊ Can you be in the same room?
◊ What happens when you start to disagree?
◊ Can you compromise and let some things go?
◊ How much are you focussed on ‘winning’ (or maybe your spouse ‘not winning’)?
◊ How far apart are you in what you think you need?
◊ How fixed are you in those ideas?
◊ Do you have friends or relatives telling you what you should end up with?
It’s normal to feel sadness and grief at the end of your
relationship.
Real MELCA divorce stories
from real people...
‘My partner was wanting to finalise everything
straightaway, I was still in shock and felt
my life had been turn upside down. Our
collaborative team helped my ex to see I was
not up to negotiating a settlement yet and we
agreed to slow things down. I was able to
get the emotional support I needed and came
back to the negotiating table when I had come
Tips for managing stress
There are many things you can do to manage the stress that arises when you separate.
Some suggestions are below – find something that works for you.
◊ Positive thinking and building confidence; Tell yourself ‘I did the best I could’, ‘I am pleased with the way I did that’, remember that mistakes are a learning experience
◊ Be realistic; Changing what you can, and letting go of what you can’t change
◊ Exercise
◊ Careful diet
◊ Limit alcohol, cigarettes and other substances
◊ Spend time with friends
◊ Reduce your working hours
◊ Take a break away
◊ Seek counselling help to work through your emotion and anger.
Relax
ation
Meditation
Yoga
Music
Dancing
Walking
Swimming
Aerobics
Weight training
Breathing exercises
Reading
Socialise
Exercise
Limiting Alcohol, Cigarettes & other substances
Good Diet
Collaboration will allow you to leave important decisions until you are ready. You will get the support you
need to be ready to come to the negotiating table.
melca.com.au | 9078 6980 [email protected]
Children and Separation
Children do best when parents keep them as their compass.
Talking to your children about separation.
All families are different but there are some things in common for Mums and Dads going through separation. Being concerned about your children is one of them.
When you speak to your children about the separation, think about the age they are, and how much information they can handle.
Little children need to hear about things like where they will be sleeping, where their toys are and when they will be seeing the other parent.
Older children want to know if they have to change schools, if they can still see their friends and continue their sport and other activities.
Change for teens is tricky. They may act cool or uninterested, but underneath they are likely to be anxious, very angry and looking for security and leadership from their ‘parenting team’.
Children and their parent’s conflict
Some parents continue the fight well after separation and property settlement, provoking and antagonizing each other. This continues the conflict they had hoped would be solved by ending their marriage.
Parental conflict is the thing that is most likely to hurt children whose parents separate. It is essential that you learn to manage it for the sake of your children. Conflict is not just about arguing and fighting in front of the children. It is about
all of those remarks to others and your spouse that your children hear, the overheard telephone conversations, your tone of voice and body language. If you are angry and are fighting with the other parent, your children will know, and it hurts them. If you want relief from conflict and to protect your children, you will have to learn to detach. You will have to learn to keep the emotion out. This can be a really hard. It means not wanting to get lots of information about the other parent’s life. Don’t pump your children for information. Don’t put them in the middle by asking them to carry messages back and forth. Deal with the other parent in a business like fashion.
To be an effective co-parent is a bit like being a neighbour – friendly enough to be helpful if needed but not interested in their personal life.
See Joan Kelly’s top 10 tips on how to make sure your children are OK after separation at the end of this chapter.
When caring for the kids becomes a battleground between parents, everyone loses. Innocent
children pay the price.
Real MELCA divorce stories
from real people...
‘Looking back, it would have been better if we
told the kids about our separation earlier. The
child specialist told us that the kids probably
knew things weren’t good, but I was sure they
didn’t have a clue. Turns out I was wrong, and
the kids had been agonising about what was
happening for ages. They were relieved when
we finally told them. I thought we had to have
the property sorted out first, but really the kids
didn’t care less about that.’
With a child-centred MELCA divorce, your kids win-on
Keeping the family home for the kids
Sometimes parents feel strongly that it is important for the children to stay in the family home. But if this is not possible, you can help them cope with the change. What’s more important to your children’s wellbeing is likely to be the assurance that they will have a loving relationship with both of you.
If there is conflict between you about keeping the house, this is likely to cause more problems for your children than moving to a new home.
If the cost of maintaining the home puts you in financial stress, this will be felt by your children. Setting up something that is affordable and where the children can live safely with a happier parent will provide them with the security they need to adapt to their new surroundings.
Child Support
Both parents are obliged to pay for their children’s upbringing as much as they can. Your children especially need your financial support when you are separated. Who pays child support and how much, should depend upon what you can afford and what you want for your children.
The Child Support Agency provides a formula for those who cannot agree on how their children are to be supported. The formula is incredibly complex, difficult to understand and does not take account of your unique family situation. For example, it does not take account of any of the aspirations you have for your children, or the way your family has lived in the past. When you lived in one house, there was no Agency telling you how much to spend on your kids. Why now?
In collaboration, decisions about support for your children are not driven by the Child Support formula, but by what you, as parents, decide is appropriate and affordable for your children.
Child support is just one part of the financial picture. You will learn more about how children’s expenses fit into the context of your whole family finances. Read more about this in the ‘Money and Separation’ chapter.
Good Advice
Is 50:50 shared care best for your children?
Children don’t measure the love of their parents by whether they spend 50% of the time, or more, or less with them. That kind of measuring is what adults do.
Gary Direnfeld says: Children who grow up between their parents’ animosity and conflict live for the day when they can leave home to escape. They grow weary and angry with their parents and will naturally seek to ultimately get away from them both. Hence a parent may win the 50/50 battle of time with their child, but lose the lifetime relationship when their child becomes an adult in their own right.
The best you can wish for is a 100% relationship with your children with whatever time is available. Any time put towards fighting and you are undermining what you already have.
Concentrate on what you’ve got and the future takes care of itself. From the work of Gary Direnfeld www.yoursocialworker.com
Parents who learn to successfully co-parent after separation have far more to offer
their children than staying in the family home.
Good advice
10 top tips to make sure your kids are OK - based on the work of Joan Kelly.
People worry about how separation will affect their children. Separation gets a lot of bad press, but the good news is that when parents educate themselves about how to care for their kids in separation, and act on what they learn, their kids are OK. More than OK.
1. Talking to your children when you are planning to separate:
◊ Both parents should speak to them together
◊ Rehearse what you and your partner will say
◊ Deliver the same message
◊ Tell them that your separation is not their fault
◊ Don’t blame each other for the separation
◊ Reassure them that both their parents love them
◊ Let them know that they will continue to see both parents
◊ Focus on the things that will stay the same
◊ Let them know that you will listen to what they have to say but that you will make the decisions 2. Don’t talk about your own distress or worry in front of the kids:
◊ Don’t speak about your separation to friends and family where you children can hear it
◊ Don’t have arguments with your partner in earshot of the children
◊ Don’t secretly let your children know the ‘real reason’ for the separation and blame the other parent. You will lose their respect and take away their innocence
◊ Don’t leave documents to do with your separation where the children can find them
◊ Keep your anxiety about money and uncertainty away from the children 3. Keep your conflict away from your children:
◊ Children hate to be exposed to their parent’s conflict
◊ Get help from professionals to work out living arrangements
◊ Be prepared to have honest and mature conversations with your ex to look after your children’s best interests
◊ Arrange to discuss hot topics with your partner somewhere away from the home
◊ Don’t use your children as messengers or spies
◊ Drop off time is not the time to have arguments with your ex
4. Do what you can to make sure your children have a good relationship with both parents:
◊ Actively support your spouse as a parent
◊ Don’t make negative comments about your spouse in front of the children
◊ Don’t allow your extended family and friends to criticise the other parent
◊ Learn to accept that parents have different parenting styles
◊ If you have difficulties managing parenting differences, seek help from a child specialist or parent educator
◊ Be flexible about the parenting plan – put your children first
◊ Keep discussions and comments about child support away from the kids
Kids are just kids. They don’t want to decide. They just want Mum and Dad to stop
5. Deal with your own anger appropriately:
◊ When you’re hurting it can be easy to think that the children feel the same way – they probably don’t
◊ Don’t involve your children in your emotional response to the separation (this is hard to do but is healthy for your children)
◊ Seek counselling help to work through your emotion and anger 6. Be a good parent
◊ Competent parenting is essential to your children’s positive adjustment to separation
◊ You can be forgiven for momentarily “losing it” in anger or grief, but not for long
◊ Going through a separation is not a holiday from parenting – you still need to provide appropriate discipline, monitor your children and maintain your expectations about school and the usual rules at home
◊ Be emotionally available for your children
7. Manage your own mental and emotional health
◊ If feelings of depression, anxiety, or anger continue to overwhelm you, seek help. Even a few sessions of therapy can be enormously useful
◊ Remember, your own mental health has an impact on your children 8. Keep the people your children care about in their lives:
◊ Make sure your children stay connected to your ex’s family and important friends
◊ If possible, use the same babysitters or child-care. This keeps some things constant in the children’s world 9. Be thoughtful about your future love life:
◊ Ask yourself: must your children meet everyone you date?
◊ Take time, a lot of time, before you remarry or cohabit again
◊ Young children in particular form attachments to your potential partners and, if new relationships break up, loss after loss may lead to depression and lack of trust for children
◊ Don’t expect your older kids to instantly love someone you’ve chosen - this person will have to earn their respect and affection
10. Continue funding your children’s expenses:
◊ Remember that child support is for your children – it is not a payment to your ex
◊ Even if you’re angry, contribute properly to your kids expenses
◊ Even if the children are not spending as much time with you as you would like, keep supporting them financially
◊ Children whose parents separate or divorce face much more economic instability than children whose parents remain together, even when support is paid. Don’t make the situation worse
In every way, let your message to the kids be that you care so much about them that you will keep them safe and away from any conflict. They will appreciate it as they get older
Your children’s future wellbeing and happiness depends on you. A better separation has better outcomes for your children – better mental health, better educational success, better future relationships .
Modified from research undertaken by Joan Kelly, 2002
The Child Support Formula does not take into account
your children’s needs. melca.com.au | 9078 6980
Money and Separation
The collaborative team is there to support you with the information you need to make sensible decisions about how to use your available resources to meet the objectives of your family, and to look at all the different ways you could share.
The financial impact of separation is different for every individual and family. In collaborative family law you’ll be able to design a financial settlement that takes into account the way your family has been living and how you wish to live, and how you can afford to live, in the future. Working towards financial agreement is made easier when the focus is firstly on the things that you will both need, such as housing and income. When you understand these big picture items, it’s easier to work through any differences.
Division of property
There’s no formula to tell you what property settlement you should get. Decisions made by judges vary significantly and it is impossible to know what decision a judge would make in your case. Past decisions are made about other people’s circumstances and offer incomplete guidance on what decision might be made in your case. In collaboration you will be helped to reach agreements that are about what you and your children need, what is reasonable in your individual circumstances and what would work best for your family – not what a judge thinks is best for you!
Separation and divorce has a long-term impact on your financial wellbeing
and this is a worry for most people. In collaboration, you are helped to make decisions about how your family’s income and resources can be shared to look after everybody as well as possible.
To help you make these decisions, your Divorce Financial Planner will ensure that you:
◊ understand your financial position and your needs
◊ learn how to maximise opportunities and minimise loss
◊ have a clearer vision about your financial future and
◊ think about and plan for your retirement
Understanding your financial position
The law requires that there is full disclosure of financial information when a couple separates, and that is no different in collaborative family law. You will need to know what your family owns and what it owes. You will be helped to gather the financial information and it will be shared and openly discussed in joint meetings.
One of the jobs of the Divorce Financial Planner is to gather the financial information. This includes getting information about all the things your family owns. For example, information about the value of your family home, any investment properties or shares and bank accounts you each have. This also includes
assets that are owned by a family trust or a family company. Information about your superannuation and insurances is also collected.
As well as what is owned, information is collected about what is owed. For example, do you have a mortgage, credit card debts or car loans?
Having a common understanding about what is owned and what is owed is an important starting point when working out a property settlement.
Superannuation
Superannuation is a family asset that can be shared as part of the property settlement even though it may not be in your name. Most people these days have superannuation and the longer you have worked the more superannuation you are likely to have. It is usual for men to have higher superannuation balances than women. Many women who have had time out of the workforce to raise their children will have low superannuation balances. What you do with superannuation can be a big question when you separate and divorce.
No one really knows what a judge might decide is fair if you
went to court, you might get more, but you might get less.
Both parties have to provide all the financial information about what each owns and owes. This
is the same in collaboration as any other family law process.
It is not unusual for people to focus on the assets they can use now and to overlook the benefits of superannuation. Receiving some superannuation in your settlement will have a positive impact on your long-term financial wellbeing. Without some savings for the future, you may not be able to retire, or you may find that you have to rely on the Age Pension to support yourself.
In collaboration, you can talk about how the superannuation should be divided and what would work best for you both. Would it be better to have superannuation savings for your future or cash and assets that are available now? The Divorce Financial Planner will be able to provide you with information
about what your retirement might look like under the different settlement scenarios you are considering. This could include projections, suggestions for splitting the superannuation and ways to maximise your superannuation.
Debt
As well as sharing assets, debts will usually be shared between you, or paid off before splitting the assets. It is important to identify all your family’s debts so that none are overlooked in your negotiations. This is a job that the Financial Planner can help you with.
There are different kinds of debt and most of us are familiar with these:
◊ mortgages
◊ margin loans
◊ credit cards and
◊ personal loans
You and your partner may have different attitudes to and understanding of debt and are likely to have different capacities to repay debt. It is up to you, with help from the Financial Planner and your Collaborative Lawyer, to decide how much debt you wish to take and are able to afford as part of the settlement.
This can be especially important for you if you wish to retain the family home. It is important to know that you can
comfortably meet the mortgage repayments and still have the money needed to meet all your other expenses. If you do not have an income, it is likely that the bank will not extend credit to you and you will not be able to retain your home, unless you can find a way to manage the mortgage.
It is useful to have some debt in your own name so that you can establish a credit rating. Even a small credit card of your own is enough to establish a credit rating. Banks are more likely to lend to you if you have shown that you are able to pay off debt.
Family budgets
Some things you might be worried about as you think about life a single person are:
◊ How much money will I need to support myself and my kids?
◊ Where will my income come from?
◊ What bills will I have and when do they have to be paid?
◊ Will there be enough money left for me to live on after I’ve paid for the kids?
Being able to answer these questions will give you knowledge and confidence when negotiating your property settlement.
Budgeting is another important job that your Divorce Financial Planner will help you with during the collaboration. Having a good understanding about what you need to live comfortably provides the foundation for your property settlement.
A good starting point is to look at what your family has historically spent. This will give you a good guide to how you lived in the past and help you to see where things could change in the future. Budgets can show whether your family has been living within your means or whether family expenditure has been greater than income, dipping into savings (or even the mortgage) to help meet expenses. This can sometimes be a surprise, and it is helpful to gain a common understanding of how and why money was spent in the past so that you do not feel resentment about what this now means for you both.
Nearly everyone has to make some changes to the way money is spent when separating, and it is likely you will have to make some adjustments.
A budget will help you to quickly see which expenditure items are fixed, like rent or mortgage, car registration and insurance, etc, and which are discretionary.
Debts have to be shared as well as
assets. Superannuation is part of the
property settlement and can be shared, even if the account
is/is not in your name.
Real MELCA divorce stories
from real people...
‘Having a good handle on my budget was the
best way to reduce my fear and uncertainty
about how I was going to manage financially
after separation. My MELCA divorce really
helped me through my fears and now I feel in
It is helpful to think about your expenditure in the following three categories:
◊ necessities: utilities, food, shelter, basic clothing and footwear
◊ basic requirements: health and dental care, personal grooming, hobbies,
◊ discretionary: health insurance, leisure activities, dining out, holidays, pets This helps you to prioritise your spending and to allocate money first to the necessities, then the basic requirements and lastly to discretionary items. (These categories are just a guide).
Knowing how much it will cost to run your two households is important information when working out a fair settlement for you both. One of the real benefits of working in collaboration with a Financial Planner is that you will both be supported to gather the information you need about your expenditure needs and those of your children, in a neutral way. Together you can see what is able to be afforded and make mutual decisions about how to share your resources and about what compromises might be needed to meet everyone’s reasonable needs.
Child Support
We talked briefly in the ‘Children and Separation’ chapter about the problems with the child support formula. Some people might think this is a valid and government authorised way to work out what child support should be paid for your children. But, as we have already said, this formula is complex and not at all relevant to the specific needs of your family.
In collaboration, you and your partner will be helped to make joint decisions about what can be afforded for your children after separation. This will be based on the work done for you by the divorce financial planner.
You will begin by creating a children’s budget which identifies the ways you have chosen to spend money on your children in the past. It can often be a surprise just how much it costs to raise your children. The budget information underpins the best financial decisions about child support.
Here a few of the important questions that may need to be answered:
◊ What income and resources are available to fund our children’s expenses?
◊ Will that change in the future?
◊ Do we both agree with the way the money is being spent for our children?
◊ What can be afforded?
◊ What needs to change?
◊ How can funding our children’s expenses be shared between us?
◊ How do we make decisions about funding our children’s expenses in the future?
There are many different decisions families make about how money is spent on their children, whether they are separated or not, and there’s no set-and-forget formula that tells you how much you should spend on your children (or where the money will come from).
Good decisions look at what’s important in your unique circumstances. Mutual decisions help deliver a united voice to the children and protect them against the arguments that can happen when there is no agreement or when a formula is used, because formulas rarely work.
The MoneySmart website is a useful resource for you to start working on your budget. It has a wealth of information and a template budget set up to get you started. You may need to go back through old bank statements and credit card statements to work out how much was spent in the past. As well as budgeting, there is information about simple ways to save money, how to reach
your savings goals and how to manage on a low income. It even has an app which you can use to track your spending!
A MELCA divorce will help you work out what you can realistically afford for your children after separation.
The ‘breadwinner’
It’s accepted in family law that the work of the parent who stays at home and looks after the children, or who keeps the household, is generally regarded equally with the parent who worked outside the home. So, the financial resources of the family will be shared, regardless of who earned the money.
Spousal maintenance
It’s often the case when people separate that partners don’t have equal income or skills. It can take time and retraining for a non-working spouse to gain meaningful employment, and that’s where the concept of spousal maintenance comes in. In collaboration spousal support is part of achieving the best for everybody, rather than about legal rights and responsibilities. The law has no formula or time limit for payment of spousal maintenance; amounts are decided on the circumstances of each couple. Your collaborative team will help you work out what’s needed for both people to re-establish themselves in the short term and to have confidence about the future, and that will also be based on your individual circumstances. A co-operative approach to spousal support can have long-term benefits in increasing future income. If the non-working spouse is given the opportunity to gain skills and restart work in a position which will pay well, there is more money to go around and to support the children. It can really be a win-win result, if looked at as a long-term investment.
Insurance
It is hard to think about what would happen to your family if you were to die, and even harder if you are separated. We have already discussed that your children need to be supported and this is true even if you become sick and unable to work or die.
Insurance provides peace of mind that, no matter what happens to you, there will be money to pay for the things your children need as they grow. The types of insurance that may be useful to consider are:
◊ income protection – covers up to 75% of your income if you become too sick to work (does not cover unemployment)
◊ critical illness – pays an agreed lump sum if you are diagnosed with a named illness, such as cancer, kidney failure, stroke,
◊ total and permanent disability – pays an agreed lump sum if you become unable to work due to a permanent disability
◊ life/death cover – pays an agreed lump sum upon your death
Separation is a time when the need for insurances to protect your family should be re-examined and the types and extent of insurance and how that will be paid for, could even be agreed upon as part of your negotiations.
Centrelink
Centrelink can provide much needed support when you separate. Even though the amount of payments can be low, they can add some much needed additional resources into your household.
Many people who are separating have not had any previous dealings with Centrelink and feel ashamed and fearful about making the initial call. Centrelink is there to help people who are struggling financially and need support, whether you need help only in the short-term, until you re-establish yourself, or whether your needs are longer-term.
The level of support available will depend upon your individual circumstances. Some of the benefits that you may be eligible for are:
◊ Parenting Payment (if you have a child under age 8)
◊ Widow Allowance (if you are a separated woman born before 1 July 1955)
◊ NewStart Allowance (if you have no income and plan to re-join the workforce)
◊ Youth Allowance (if you have young adult children)
◊ Age pension
The rules are quite complicated and a Financial Planner can give you advice about the type of benefit and amount of
payment you are entitled to receive. This can then be included in your budget to help you see how you can make ends meet. Centrelink staff is there to help you. The Financial Planner can also assist you with your interactions with Centrelink. The Centrelink website has a lot of information about how you can be helped. www.centrelink.com.au
To make sure your children are taken care of if you get sick or die, you need to have
insurance.
You might be entitled to some financial help from Centrelilnk after separation.
Legal matters
Regular legal advice is based on the Family Law Act, and most importantly on cases that have been decided in the Family Courts. These are not just any cases, but cases that have been fought all the way to appeal and beyond, and only occasionally focus on a complex area of law. They are usually cases that result from extreme levels of conflict and dysfunction between the parties, or the dysfunction of one of them. That is the first reason to think about putting aside the law and thinking about your own situation and goals when you look for ways to reach agreement.
The agreements that you make in a collaboration are not dictated by the law. Your own decisions may be quite different from the decisions of a Judge, and that’s OK. The reasons you make your decisions will also be different from the reasoning of a Judge, and that is one of the most important benefits of collaboration.
When facilitating collaborative agreements, we don’t start by talking about percentages or any other fixed legal position. We start by talking about what there is to share, and what each of you and your children need. It is all about you and your family, not all about the law and other people’s cases that have shaped the law.
The Family Law Act does not have a formula for dividing property. It is not possible to forecast exactly what a Judge would decide, and often a lot of money is wasted arguing about the different advice that you and your spouse may have received. Often you are arguing about very little when you stand back and look at what each % point means. Court decisions are aimed at a ‘clean break’ or having you become financial strangers as quickly as possible. The reason for that is that couples are seen as unlikely to co-operate over time, and couples who need a judge to
make decisions for them may not have that ability. There are many couples who can co-operate in the financial best interests of themselves and their children. There are times when there are advantages in delaying the sale or transfer of an asset, for example for tax effectiveness. That is not something that a Court would routinely consider or order. There are also times when you can maximise your assets by some continued or new investment together, which a Court would never order. Creative thinking and longer-term co-operation are encouraged in collaboration.
The legal documents you sign at the end of your case are the same documents that you sign anywhere else. They are one or more of the following: Consent Orders, Financial Agreement, Limited Child Support Agreement, Binding Child Support Agreement, Parenting Plan.
The law according to the Family Law Act and cases.
The law about marriage, children and de facto relationships is a ‘No Fault’ system. Some of the important legal concepts are outlined below:
De Facto relationships
These days the law is generally the same for de facto relationships and marriages.
Pre- Nuptial Agreements
In Australia these are called financial Agreements, and can be made before or during a marriage or defacto relationship. ‘Pre-Nups’ are increasingly popular in new relationships between older couples who have estate planning issues in mind.
Divorce Application
A Divorce application can be made jointly by the husband and wife, or separately by one spouse. A divorce is the legal ending of the marriage. It is not the property settlement
The application can be prepared by a solicitor, or it can be prepared by one or both spouses, by going to www.fca.gov.au or
www.federalcircuitcourt.gov.au. A filing fee is required to lodge an application for Divorce. The fee changes each year, and is published on both of the above websites.
Separation
Separation is generally when you either stop living together because your marriage or de facto relationship has broken down,
The collaborative lawyers write the same legal documents as you would get
in any other legal process.
Real MELCA divorce stories
from real people...
‘At first I did not understand why my
collaborative lawyer did not seem interested
in telling me all about my legal rights at our
first meeting. Talking about what each of the
team members would do calmed me down,
and in the end we both managed to get as
close as was ever going to be possible to
what we had hoped for.’
Children
The main aim of the Family Law Act when it comes to making arrangements for children, is to ensure that the best interests of children are met. There is a focus on children spending regular time with both of their parents and other people significant to their care. The Family Court has a focus on the rights of children and on the responsibilities of parents.
50:50 Shared Care
Contrary to popular belief, the law in Australia does not say that children spend 50-50 time with their parents after separation.
The Court must consider whether the child spending equal time with parents is in the child’s best interests and reasonably practicable, if the parents have joint shared responsibility. There is no rule that children will spend equal time with their parents even when the parents have joint shared responsibility.
Co-operative arrangements for children
Parents are encouraged to make arrangements for their children in a co-operative manner. If, after mediation, parents are unable to agree about arrangements for the children, it may be necessary to make an application to the Court.
Relocation of children
If one parent wants to move away with the children, that is often called a relocation case, but the same considerations are taken into account in those cases as in any other case about children. If a Court has to decide, it will consider what effect moving or staying would have on the children and on their relationship with each of the parents.
Child Support
Both parents are responsible to support their children to the best of their ability.
Ideally payments for children would be decided between parents on the basis of what is needed to ensure children have appropriate housing, and to meet their daily needs, health, education and activities. The Child Support Agency assesses and administers child-support, if parents are unable to agree on appropriate amounts and methods of paying child support. There is a formula for payment of child support, which is based on cost of living scales, the time the children spend with each parent and on the income of each parent. It’s rare for both parents to be happy with these formula payments. There are better ways to work out what your children need.
The child support agency website site www.csa.gov.au
provides information, questions and answers and an estimator for child-support.
Child Support Agreements
Child Support Agreements are used to document arrangements for covering children’s expenses other than by the formula. Legal advice in drafting Child Support Agreements is necessary.
Support for Children over the age of 18
The Child support agency does not assess or administer payment of maintenance for adult children.
If an adult child suffers from a disability, or requires financial support to continue education, then parents will have a responsibility to provide support to the extent that they are able, as long as such support is reasonably necessary.
Real MELCA divorce stories
from real people...
‘Neither my wife or I could see how the
Child Support Agency formula was going
to help us to support and pay for the kids.
What did work was doing the kids’ budget
so we could decide where the money was
going to come from. Our collaborative
lawyers were able to write a Child Support
Agreement based on what we had decided.
Spousal maintenance
When you marry or live in a de-facto relationship, you have rights and responsibilities to support your spouse and to be supported.
The purpose of maintenance is to address difference in incomes or earning capacity of spouses. It is usually for the purpose of allowing a spouse to retrain or re-establish themselves financially, and is usually for a short period of several years. It will be affected by reasons of age and health, the need to care for children, re-training and many other factors. There is no formula for this.
It is often paid in a lump sum as part of a property settlement.
What is a de facto relationship?
The definition considers:
◊ the length of your relationship
◊ the nature and extent of a common residence
◊ whether a sexual relationship exists or has done
◊ the degree of financial interdependence
◊ ownership use and acquisition of property
◊ the degree of commitment to a shared life
◊ any registration under state or territory law
◊ whether there are children
◊ the reputation and public aspects of the relationship.
What period of time defines a de facto
relationship?
A de facto relationship is generally defined as being for no less than a two-year period. Any court action is to be brought within two years of the date of separation, but there are some exceptions.
Division of property: How does a court decide?
There is no formula used to divide your property. No one can tell you exactly what orders a Judge will make. The decision is made after all the evidence is heard and the judge decides what is just and equitable based on the unique facts of your case. The law has general principles to be considered when dividing assets after the breakdown of a marriage or de facto relationship. Those principles are based on:
◊ working out your assets and debts and what they are worth
◊ looking at the direct financial contributions by each party, such as earnings, loans or gifts from family, property owned at the start, inheritances
◊ looking at the non-financial contributions to the marriage or de facto relationship such as caring for children and homemaking
◊ future requirements – a court will take into account things like age, health, financial resources, care of children and ability to earn
It is important to realise that the way your assets and debts will be shared between you will depend on the individual circumstances of your family. Your settlement will probably be different from others you may have heard about.
Superannuation
Superannuation is property, and can be divided by agreement or by Court Order. This does not mean that you can access the superannuation before you meet a condition of release under the superannuation regulations.
Real MELCA divorce stories
from real people...
‘My wife asked me to do a collaborative
separation at MELCA. I didn’t want the
separation and went to court because I was
angry. I didn’t know what I was getting us into,
and what a bad mistake it has turned out to be.
It cost more than double the amount MELCA
quoted and that was spent just on lawyers. It
has been really traumatic and now neither of our
adult kids will speak to me.
The law will not provide a settlement that necessarily
takes into account the needs of your family.
Time Limits
Applications for division of property are required to commence no later than 12 months after the date a Divorce Order becomes absolute, or two years after the end of a de facto relationship.
In cases where there would be hardship to a spouse or a child, exceptions may apply.
Inheritances
An inheritance is property, but how it is treated under the law will depend on many factors, including the timing of the inheritance, the size of the asset pool and other contributions.
Gifts and Loans from family or others
If a gift was to one party rather than to the couple, that person will have a greater claim to it. It will often be a matter of evidence as to whether a gift was to one spouse or to both, and whether money advanced was a loan or a gift.
Interest in a trust
These interests can be seen as property, but that will be affected by the type of interest and the degree of control that a person has over the trust.
Debts
Debts are usually deducted from the value of the assets before arriving at a valuation of the asset pool. Regular debts such as home mortgages would be considered to be joint liabilities of the marriage. There are situations where one spouse might have incurred a debt recklessly or deliberately, and that person may be responsible for such a debt.
Consent Orders
If you and your spouse come to agreements about division of property, splitting of superannuation, spousal or adult child maintenance, you can record those agreements in Consent orders that are filed for approval at the Family or the Federal Circuit Court.
You can file the application yourself, but most people find that they do require some assistance from a lawyer.
Financial Agreements
A Financial Agreement is a private contract between spouses which can cover agreements about division of property, splitting of superannuation, spousal or adult child maintenance and child support. These Agreements are technical and require a lawyer to draw and advise on them. They are not filed with the Court, and there are strict requirements that have to be observed to make them valid.
Stamp Duty
In all states of Australia transactions that would otherwise attract stamp duty are exempt from duty when they occur as a result of marriage or relationship breakdown.
Capital Gains Tax
Payment of capital gains tax in circumstances that would otherwise trigger a payment are deferred, when resulting from marriage and relationship breakdown. The implications of this, and how deferred liabilities are managed requires legal advice.
Real MELCA divorce stories
from real people...
‘I had done a lot of reading about Family Law
because I wanted to be well informed in my
separation. I thought I had it all sorted until I
heard my husband’s perspective. I was actually
surprised that we didn’t end up spending much
time talking about ‘law’. Our lawyers let us talk
much more about what we wanted. Amazing.’
melca.com.au | 9078 6980 [email protected]Collaborative practice emphasises the importance of your own decisions rather than relying exclusively on
melca.com.au | 9078 6980 [email protected]
Links And Resources
Melbourne Collaborative Alliance
www.melca.com.au
Tricia Peters – Collaborative Financial Planner
www.petersmckeown.com.au
Marguerite Picard – Collaborative Family Lawyer
www.margueritepicard.com.au
Dr Tina Sinclair - Collaborative Professional
www.drtina.com.au
IACP: Collaborative law, collaborativepractice, collaborative divorce.
www.collaborativepractice.com
Australian Institute of Family Studies - Australian Government
www.aifs.gov.au
Your Social Worker - Gary Direnfeld - Parenting Articles
www.yoursocialworker.com/articles.htm
Child Psychologist - Rosalind Sedacca
www.childcentreddivorce.com
Dr Tina Sinclair’s ‘Divorce Tips from Puppets to Parents and Children’:
www.youtube.com/watch?v=aWi9C0yy6L4
OCLF: Ontario Collaborative Law Federation. Video Story
www.oclf.ca/OCLF-CPVideoPublic.htm
‘Today Show’ on Collaborative Practice
www.youtube.com/watch?v=R61fCemn9Ls
