Collaboration and Divorce: The Pros and Cons
Can two people ending a marriage really cooperate to create good outcomes for themselves and their children? It isn’t easy, but it can be done—especially if they use the collaborate divorce process.
As tempting as some may find the idea of hiring a ruthless bulldog lawyer and going after the other person for everything they’ve got, divorce is tough enough without purposefully trying to cause more hurt. And if there are children involved, it’s even more important to keep conflict and anger to a minimum.
If you and your soon-to-be ex-spouse are willing to approach the divorce process with openness and a desire to compromise, a collaborative divorce can have many positive benefits for you, your partner, and your children. The “full” collaborative team consists of the two parties, two attorneys, two trained “coaches” (one for each party) or one “neutral” coach (if you so choose) to facilitate effective communication, a neutral financial consultant, and a child specialist to serve as the voice of your dependent children.
Here are just a few of the major advantages in choosing collaborative divorce over a traditional “courtroom” divorce.
Better Overall Outcomes for Everyone
Because a collaborative divorce requires that both parties come together in a spirit of cooperation, negotiations are often less adversarial than in a traditional divorce process. The voluntary nature of a collaborative divorce makes it far more likely that you’ll both be starting off on the right foot—with an eye toward compromise and securing a win-win agreement.
Stops the Revolving Door of Returning to Court
One of the frustrating things about divorce can be when you think it’s all over but your ex-spouse refuses to honor agreements already made. This often opens up an endless cycle of fighting and going back to court, which is expensive and emotionally draining. But with a collaborative divorce, decisions are made jointly by both parties—not mandated by a judge—which often results in everyone trying a lot harder to follow through on their commitments without putting up a fight.
Happier Kids (this one is big!)
The collaborative divorce process gives children a much stronger voice than in a traditional divorce process. A child specialist will speak with your kids and find out their concerns and preferences and then act as their advocate during the negotiation process. As you can imagine, this critical component can really help dampen down the hostility and adversarial dynamic that sometimes exists between two parents who each think they know better than the other what is best for the children. Consider, too, that in a traditional divorce, a judge often makes important decisions about critical issues like visitation and child support, and he or she will do so without knowing you or your children on a personal level. But in a collaborative divorce, you and your spouse work together to make decisions you know will be best for the health and happiness of your most treasured concern, your children.
A Streamlined Process at Your Preferred Pace
Because you’re not beholden to the schedule of the court, you can move the process along at your own pace. You won’t waste time waiting to be scheduled to see the judge, waiting for your case to be called, waiting for your next hearing, and so on. Avoiding all these logistical delays can really help reduce everyone’s stress as well. Move quickly if you both want resolution as quickly as possible, or move more slowly if you need more time to deal with difficult emotions, give your children additional time to adjust, or for any other reason.
More Privacy and Confidentiality
When you go through a collaborative divorce process, much less of your private information becomes publicly available than if you go through litigation. The details of the conversations among you, your partner, and other team members are kept confidential, and no final paperwork is filed with the court unless and until both parties agree to the language used.
Often Less Expensive
In many cases, a collaborative divorce is cheaper than going the traditional litigation route. Even though there are more professionals involved—all of whom need to be paid—the process often is smoother and can completed more quickly that when the two parties are fighting to win in court.
Are There Any Potential Downsides to a Collaborative Divorce?
The list above explains just a few of the reasons you may want to seriously consider using the collaborative divorce process. In my many decades as a family law attorney, I have consistently witnessed that couples who choose this option experience a smoother separation and less conflict during negotiations and even after an agreement is reached.
That’s not to say a collaborative divorce is for everyone, or that it’s necessarily a perfect solution for you and your family. Here are some things to consider:
You can only use the process if both of you agree to it. You don’t have to get along or agree on everything (if you did, you probably wouldn’t be divorcing), but you DO both have to commit to a spirit of cooperation and compromise in your negotiations. If one person isn’t interested, or won’t stay committed to the process, it won’t work. Also, if you are not committed to having mature conversations in a business-like setting, but instead insist on speaking negatively about your former partner during the meetings, it would not be a good fit for you.
If you don’t trust your spouse to be honest about finances, it could put you at risk. Because this is a voluntary process, both parties must agree to be completely forthcoming about financial assets and debts—and it’s based on the honor system. You’ll have a mutual financial expert to help with negotiations and ask for additional documentation, but because there’s no court-ordered financial discovery process (subpoenas to obtain documents from third parties) in a collaborative divorce, honesty is essential.
A collaborative divorce isn’t always the cheaper option in the short run. In fact, sometimes it’s more expensive (but certainly not always). You’ll be working with your chosen team of collaborative professionals, all of whom will be charging for their time. It’s up to you and your spouse how many experts to involve, but at a minimum, you should expect to have two attorneys. Then you could agree as necessary to add a neutral divorce coach, and a neutral financial expert--and if you have children, a child specialist. (Still, even if the short-term expenses seem higher, remember that you can move the process as quickly as you both agree to, and since you’ll both be more likely to be satisfied with the outcome, you’ll save money in the long run by avoiding further fighting in court.)
If you can’t reach an agreement, you’ll have to have another attorney for court hearings. At the outset of the collaborative divorce process, the parties agree that if either spouse backs out or if the couple is unable to reach an agreement, the process will end and a traditional litigation divorce process will begin. You’ll have to get new attorneys; however, the disclosure documents you have already exchanged will be helpful to your new attorney who would pick up where you left off. One important thing to note is that your collaborative attorneys are highly motivated to help you reach an agreement through collaboration, even if it is on a few of the issues, leaving one or two issues for the judge to decide for you.
The Bottom Line: It’s an Option Worth Exploring
Overall, the potential benefits to a collaborative divorce make it an option well worth considering. I’ve seen my clients who go this route secure far better outcomes for everyone in the family than most of those who take the traditional litigation route. The best way to make the determination if it’s right for you is to talk to an experienced collaborative divorce attorney who will take the time to learn about your specific situation and give you thoughtful advice. Contact us today for a confidential conversation.
Is Divorce Mediation Right for You? Here Are Two Emotional Roadblocks That Could Cost You Dearly.
One of the many potential benefits of divorce mediation over a litigated “courtroom” divorce is that both you and your partner can make mutually beneficial decisions together instead of relinquishing control to a judge. This is so important when it comes to making big decisions about your children, of course. But what about when it comes to property? I’d like to share some thoughts about how to make it work, what can get in the way, and use a few stories to help you decide if mediation is right for you.
Do You Want to Split the Baby?
Not literally! Now that I have your attention, let me remind you of a Bible story with which you may already be familiar. Two women who both claimed to be the mother of an infant child brought their case before King Solomon to settle the matter. Unable to determine which woman was telling the truth, Solomon ordered that a sword be used to cut the baby into two as a fair resolution that would allow each woman to have half a baby. One woman was satisfied with the judgement and agreed to the decision, while the other begged Solomon not to kill the baby but instead spare his life and give him to the other woman. It was her selflessness that showed Solomon she was the child’s real mother.
When you hear of a “split the baby negotiation,” this is the story being referenced. It typically describes a situation where both parties simultaneously win and lose in the agreement. It certainly describes what often happens in a divorce where the two parties can’t or won’t come to a mutual agreement about dividing assets and a judge has to make the final determination. Trust me—both parties are usually pretty dissatisfied.
Being Willing to Compromise Creates More Mutual Wins
When it comes to divorce, I think most people can relate to this feeling of both winning and losing at the same time. The dissolution of a marriage, the splitting up of a family, the splitting up of belongings and properties and assets are difficult to deal with. There’s pain in ending one chapter and hope for a fresh beginning—the best one can usually hope for is an experience that is bittersweet.
One of the reasons I love working with couples who use mediation to settle their divorce is because of the spirit of cooperation both parties try to embrace in the process. That’s not to say it’s easy for them—but the fact that they want to part peacefully starts them off on the right foot.
Still, no one is perfect, and we bring not only our recent hurt and disappointment into the divorce process but also our lifelong characteristics, habits, and attitudes. The mediation process is there to help everyone negotiate in a productive way with an eye toward win-win resolutions.
Entitlement and Resentment: Significant Emotional Roadblocks in Mediation
There are certain emotional roadblocks I routinely see get in the way of smooth negotiations. One of those is a sense of entitlement and a strong internal drive for people to make sure they don’t settle for less than they feel they deserve.
Entitlement and resentment often go hand in hand, as you can imagine. Even if you weren’t “keeping score” while you were married, at the end, you may find yourself making a mental tally of all the ways and times you believe you gave more than your spouse did and how unappreciated or taken for granted you now feel. Who earned more, spent more, did more housework, spent more time with the kids, enjoyed more time with friends or hobbies, had the better or worse extended family...there are countless reasons to feel you gave more than your spouse did and now maybe you want to make sure you are compensated for your sacrifices. After all, aren’t you owed for your trouble?
Resentment and entitlement are big emotional roadblocks that need to be overcome in order to enjoy a successful mediated divorce settlement. Let me tell you two true stories that may inspire you to check your resentment and entitlement levels before you get started.
The Marriage of Cream and the Old Faithful Geyser
Consider the 1993 landmark divorce case of Olga and Howard Cream. They were married in 1970, and in 1973 they purchased Old Faithful Geyser of California (yes, you can own a geyser!). For 15 years, they worked together to manage the property and run the on-site business. Then the marriage ended, and so did their desire to work together in the business.
Both parties claimed the combined value of the property and the business was $800,000, but neither one of them submitted an actual appraisal. Neither Olga nor Howard wanted to give up their half. Howard offered to buy Olga out at above-market value, but Olga declined. With the couple unable to come to a mutual agreement, the court stepped in.
Despite Olga’s repeated objections, the court ordered a nonbinding private auction. In this process, each party would enter a bid for one-half the value of the business, and whoever entered the highest bid would then buy out the other party at that price. Olga bid $596,000 and Howard was the auction winner with a bid of $600,000. The court valued the geyser at $1.2 million and awarded the property and business to Howard.
Here’s where it gets tricky. Howard was unable to make escrow, which then gave Olga the chance to buy him out for $596,000. So she won, right? She got the geyser and the business. But she didn’t feel like she won. She was very unhappy that she had to pay 50% more than she would have had to pay on the property both she and Harold originally agreed was worth $800,000, not $1.2 million!
Olga won the property and the business but lost nearly $200,000 she didn’t feel was fair to pay for it. Harold lost the property and the business but won because he was ultimately paid more than 50% of the value of the business.
Think about that. If Olga and Howard could have come to an agreement together rather than handing control over to the court, they might have both felt better about the outcome.
By the way, Olga filed for divorce in 1987 and the whole ordeal wasn’t over until 1993. That means they both endured five long years of stress, conflict, and legal fees. I wonder, once it was all over, did they both think the fight was worth all that time and trouble (and money)?
How Much Is That Thing Really Worth?
I had a similar case a few years ago (no geysers involved in this one). My client and her husband were both dead-set on keeping a piece of framed artwork they had purchased together. Either of them could have purchased the same print online for about $300, but for some reason, this particular framed piece became a sticking point and neither party would give it up. (Was their stubbornness because of emotional attachment or spite or a sense of entitlement? I never did understand!)
The other attorney and I finally convinced them to agree to a silent "auction" where each of them would bid for the piece and whoever placed the higher bid would “win” and pay the other party 50% of the winning value and keep the artwork. My client bid $1,500 and her spouse bid $800. She paid him $750 for his share and kept the artwork.
Technically, my client “won” because she got the keep the artwork. But she didn’t just pay him 50% of the real value. She paid him quadruple what she should have--enough that he could buy two more of the same print and get them framed!
Technically, he “lost” but he came out hundreds of dollars ahead on the deal. My client “won” the bid and kept the artwork but paid more than double its value. I couldn’t help but think both of them were operating from a place of resentment and entitlement—they both wanted to win, and that was more important than any sense of compromise either of them could muster.
But What If You Really ARE Feeling Resentful and Entitled?
Divorce is difficult for everyone, and it’s natural to have lots of negative emotions. If you didn’t, you probably wouldn’t be splitting up. It’s understandable. And it doesn’t mean mediation is off the table. But if one or both of you approach the situation with the intention of refusing to settle for less than you feel you deserve, it’s going to be practically impossible to arrive at mutually satisfactory outcomes. You’ll lose more than you win. If you want to make sure your partner pays big time, hire a bulldog lawyer and fight it out in court.
But if you want to experience as many wins as possible, use mediation. Mediators are trained in helping negotiations run smoothly. We are skilled in conflict resolution and in facilitating constructive conversation. We help both parties practice putting emotions aside and stay focused on a spirit of cooperation and compromise. There will still be bumps in the road, but the important thing is that a mediator will help you both stay on track and aim for positive outcomes.
Collaborative divorce is another way to negotiate without giving control to a judge. In collaborative divorce, there are two trained divorce coaches who are skilled at helping you put your emotional roadblocks aside and have effective communication during a difficult time. Learn more about collaborative divorce.
Can a trust or estate plan protect your assets during a divorce?
Planning for the end of life—much like planning for the end of a marriage—is something nobody wants to think about. My experience has shown me that going through the process of creating a prenuptial agreement can actually be helpful in keeping a marriage together—it's almost as if being prepared for an unwanted outcome makes a couple more likely to work hard to avoid it. But when it comes to estate planning, the odds aren’t in our favor. Completing a will, trust, and other essential documents OR avoiding the process entirely will have no effect whatsoever on whether or not we die. We can prevent divorce, but none of us will avoid death!
What’s the difference between a will and a trust?
While estate planning is not my area of specialty, it’s certainly something I encourage my clients to learn about. Both a will and a trust ensure your assets are protected and will go to your heirs upon your death. A will is necessary if you have young children and want to dictate who their guardians will be upon your passing. A trust is necessary if you want your assets to go to your heirs when you die--without going through probate first (probate is lengthy and time-consuming so it’s worth avoiding).
Does everyone have a will or a trust?
If you don’t have a will or a trust and you’re already feeling overwhelmed by the terminology or daunted by the idea of going through the process, you’re not alone. A shockingly small minority of Americans have ANY estate planning documents prepared. According to a recent survey by Caring.com, the number of Americans who have a will (the easiest document to prepare) are low in every age range:
Ages 18-34: 26.8%
Ages 35-54: 22.5
Ages 55+: 44%
Does it surprise you that so many people over 55 don’t have a will? It surprises me! Then again, I know how unpleasant it is for most people to face their own mortality. But that’s not the only reason people don’t have a will.
AARP reports that the primary reasons people give for NOT having their essential documents in place are predictable: when asked, 47% say they just “hadn’t gotten around to it” and 29% say they “don’t have enough assets to leave to anyone” (29%).
I don’t even know where to get started.
When it comes to setting up a trust, I’m sure the numbers are even lower. After all, there are many different types of trusts, and if you don’t have one yet, just getting started can be confusing. Creating a trust is NOT something you can do on your own—you’ll definitely need the help of an estate planning attorney. But if the topic is completely new to you, perhaps you'll find it useful to familiarize yourself with a few basics on your own before you meet with an attorney. A little online research will only take you a few minutes. This Investopedia article about the differences between wills and trusts is a nice primer, as is this one from NerdWallet.
Warning: Keep in mind a lot of the resources available online will NOT give you information that’s specific to California, and websites aren’t always kept up-to-date, so don’t rely on online research for anything other than some basics. You really do need to speak with an experienced and licensed estate planning attorney to make sure you make the right decisions for you. If you would like a referral, contact me and I’ll be happy to refer you to someone in the Santa Rosa area I know you can trust.
So, if I have a trust, do I still need a prenuptial agreement to protect what’s in the trust?
The short answer: probably. Trusts and prenuptial agreements are different documents that serve distinctly different purposes. A trust protects your assets in many ways, but in California the laws can be complicated, and there are many potential areas of conflict between a trust and a pre- or post-marital agreement. In fact, sometimes when a change is made to a trust, it can actually affect the terms of your prenuptial agreement and require that amendments be made.
Unfortunately, this can create a problem your estate planning attorney may not even realize exists!
But I thought a trust would protect me from practically anything and everything, right?
Occasionally I’ll meet a client who has the idea that “my trust protects everything that’s mine and keeps it from becoming available to my spouse, no matter what.” They’re always shocked when I tell them that this is an overly simplistic idea of how much a trust protects you, and this idea can get them into a messy situation down the road.
Let me share with you a pretty common scenario that helps illustrate why you need the expertise of a family law attorney even if you have a great estate planning attorney when both a trust and a prenuptial agreement are involved.
The Story of Tony and Teresa and the Trust (names and some details have been changed)
Meet Tony and Teresa. Both Tony and Teresa were married when they were younger, and now, both having lost their spouses, they find themselves blessed to find love again with each other.
Decades earlier, Tony had worked with an estate planning attorney to establish a trust which protected several of his assets, including his primary residence, a rental property, and several investments. When his wife died, the parameters of the trust were unaffected. Now approaching retirement age, Tony learns he’ll be receiving a $50,000 golden parachute package from his company. Tony is obviously excited about this windfall, and he wants to place it into his trust. From his perspective, this is his money. After all, it’s payoff for many years of hard work in his industry and loyalty to his employer.
When he meets with his estate planning attorney to discuss amending the trust to include this big bonus, he brings along his beautiful bride of just under a year. Amending his trust will require an extra step because Tony is now a married man. But it’s no problem, the attorney assures him: they have a handy-dandy contract ready for situations just like this.
By signing this contract, the attorney explains, Teresa acknowledges that there are no conflicts of interest and she waives all rights to that money—both during the marriage and in the unfortunate event the marriage dissolves. It’s a short contract, simple and straightforward. Teresa and Tony sign it, both feeling assured they’ve done everything right. They have followed the advice of an attorney, after all.
By the way, in some estate planning firms, this is very common practice--to handle a very complicated process with an overly simplified solution that actually puts everyone at risk.
Now let’s look at a few ways this story might unfold....
Scenario 1 – Tony and Teresa have a happy marriage, and always have plenty of money in their joint account. They never experience any significant financial troubles, and they remain together until one of them passes away. The trust is never challenged, and the handy-dandy contract they signed years ago turned out to be a formality that stayed neatly filed away, never to be read or referenced again.
Scenario 2 – Tony and Teresa hit some bumps in the road and decide to part ways and get a divorce. They’re pretty upset with each other, and there are arguments about how to divide their assets. Tony assumes that everything in his trust is protected and that Teresa has no claim to it. Imagine his surprise when Teresa demands half of that $50,000 retirement bonus he got! Impossible, he thinks...we signed a contract.
Unfortunately for Tony, his estate planning attorney didn’t understand California community property laws well enough to make sure Tony had the protection he wanted. There are really two issues here:
- The $50,000 bonus was received from an employer and is therefore considered income earned during the marriage, and by California law, is community property.
- That handy-dandy contract wherein Teresa waived her rights to that $50,000 is useless. Why? Because contracts like that signed by spouses during a marriage have to follow the rules for California marital agreements. The attorney had the right idea, but he didn’t have the knowledge he needed to make sure they did things right.
See how messy things can get? Let’s take it a step further, just for further illustration.
Remember those real estate properties that were in Tony’s trust when he and Teresa got married? Surely those are his and protected from Teresa’s greedy fingers, right? Not so fast. For many years, the couple used joint funds to pay the mortgage on the house—that they lived in together. And at one point, they pooled money from their separate investments to make renovations to the rental property. Teresa thinks she now has some claim to the house—she lived in it and contributed to the mortgage. And it doesn’t seem fair to her that Tony will continue to collect rental income on the other property when he’s pulling in a lot more than he did before she helped pay for the renovations and upgrades!
So, who’s right? Does Tony get to walk away with the two properties? Does Teresa have some claim to them?
As soon as finances comingle, things get messy, and this is a perfect example of a VERY messy situation! Tony won’t like it, but Teresa is going to get some of the value of the house—the fact that it’s in a trust has nothing to do with the fact that joint finances paid the mortgage. While Tony could potentially walk away with the rental property, he may have to repay Teresa for her investment in upgrading it—not to mention the resulting increased value might also have to be shared with Teresa. If Tony doesn’t have the funds to pay Teresa what she’s owed, then one or both of his properties could be at risk. The trust doesn’t protect them.
The Bottom Line
Every situation is different and there are an infinite number of variables that can affect your outcomes. As the scenario above shows, things can get messy pretty quickly. Overall, there are three very important lessons I hope you’ll take away from this:
- Trusts protect assets from the government and from probate so you can pass them on to your children and heirs after you’re gone, but trusts don’t necessarily protect your assets from a spouse if a marriage dissolves.
- Agreements made between you during marriage need to comply with California law, and they often require independent legal counsel to be valid. Otherwise, you open yourself up to unanticipated loss during a divorce.
- Always seek the professional advice of attorneys who specialize in their fields—you may need to hire both an estate planning attorney AND a family law attorney to protect your interests and assets.
California law is complicated and changing constantly, and when it comes to specialty areas like estate planning and prenuptial agreements, it’s important to be armed with knowledge and the support of experienced attorneys who will help you navigate the terrain and avoid pitfalls. Please reach out if I can help you with a prenuptial agreement or give you a referral to a trusted estate planning attorney.
8 Lessons We Can Learn From the “Gray Divorce” of Bill and Melinda Gates
When one of the world’s wealthiest couples announces their divorce after decades of marriage, the world takes notice. Perhaps it’s easy to dismiss the wave of stories about the divorce of Bill and Melinda Gates as just so much celebrity fluff. After all, what do we mere mortals have in common with people worth $130 billion, right? Perhaps more than you think.
When I first heard about their split, I was saddened, as I always am when I hear about the end of a marriage. I have compassion for Bill and Melinda, and I worry about the impact the split will have on their children, as I expressed in this earlier blog post. I wish the Gateses nothing but the best and hope the process goes smoothly for them and for their family.
But as I’ve continued to think about it, I realize there are many reasons to pay attention to their story. There are lessons to learn and warnings to heed. As an attorney, I cringe a bit hearing some of the details of their situation and I find myself anticipating pitfalls they may encounter as they go through the process. They’ve asked for privacy, and I’m sure they’ll keep many aspects of their situation confidential. Still, even with the little we know, this high-profile case provides an opportunity to consider how all of us—whether marriage hopefuls, newlyweds, or seasoned spouses—can evaluate our own situations and ensure we have planned and prepared for both the best and the worst outcomes.
While US Divorce Rates Trending Down, “Gray Divorce” is On the Rise
None of us wants to be a statistic. Unfortunately, Bill and Melinda Gates are part of a growing trend in the United States called “gray divorce.” According to Pew Research, divorce in the US is generally on the decline—except for married people over the age of 50. Since 1990, the over-50 divorce rate has more than doubled, and for the over-65 crowd it has more than tripled. As of this writing, Bill and Melinda are 65 and 56 respectively, so they fall neatly inside the group most at risk for so-called gray divorce.
Why is this happening? Why are couples splitting up after decades of marriage? There’s no one reason and no simple answer. The US Census reports the current life expectancy for women is 82 years, for men it’s slightly lower at 77 years--and for both genders, we’re living longer. It’s easy to imagine an unhappily married person might do the math and decide they have years or even decades of life ahead of them... and they don’t want to spend it with a spouse they no longer love. Perhaps, too, the fact that women have more financial opportunities and empowerment than their mothers and grandmothers did means they’re less likely to feel trapped in a marriage and stay purely for financial security. There are many other contributing factors to the increase in gray divorce trends too, of course, and if you want to dig more deeply into the topic, The Gray Divorce Revolution is a study worth reading.
Whatever the reasons (and there are many), the numbers are clear: gray divorce is on the rise. Rather than feel disheartened by the trend, we would be wise to look for the warnings and then take deliberate steps to avoid becoming part of it.
What Can We Learn from the Divorce of Bill and Melinda Gates? More Than You Think!
The media can be unkind, but as caring human beings, the rest of us find no joy or entertainment in the misfortunes of others—not even when the “others” are among the wealthiest people on the planet. What we can do, however, is try to learn from them. Consider these eight lessons and ask yourself how you might apply them to your life and marriage.
Lesson #1: No Matter How Many Good Days You Have Behind You, Good Days Ahead Aren’t Guaranteed
One lesson to be learned from Bill and Melinda and the increasing number of late-in-life divorces is that no matter how long you’ve been married, there’s no guarantee you’ll stay married. You must work constantly to keep communication open and productive, to strive for mutual love and support, to work toward improvement of the self and the marriage, and to check in with one another often to learn how to best foster your partner’s happiness.
Lesson #2: Money Doesn’t Buy Happiness
Watching celebrity splits always reminds me that the well-known adage is true: money can’t buy happiness! If it could, certainly Bill and Melinda would be among the happiest people on earth, and their marriage would have been indestructible. Financial success is no indicator of marital success and wealth is no buffer against hardships or mistakes. At a recent event in Sun Valley packed with billionaires (many of whom we can guess are probably divorced themselves!), Bill openly stated that the divorce was “his fault” and that he was responsible for “messing up” (by many accounts, it was not a one-time dalliance to which he was referring). For the average person facing occasional or prolonged financial difficulties, it might be hard to understand why a couple who has it all can’t seem to keep it all together. The fact of the matter is that whether rich, poor, or anywhere in between, all married people are just human and they all face the same types of human challenges—both throughout a marriage and during a divorce. For those going through a gray divorce, money can be a particularly contentious subject as both parties realize their years of earning potential are fewer now than when they married, and the wealth they acquired over the past several years and decades feels suddenly in jeopardy.
Lesson #3: Divorce Is Tough on the Kids, Even When the Kids Are All Grown Up
According to people close to the couple, Bill and Melinda had been living separate lives for years and that they delayed divorce proceedings at least in part because they didn’t want to split up until after their youngest child had graduated from high school. Many couples make the decision to “stay together for the kids.” One thing I always try to remind parents is that no matter how old your kids are when you get divorced, your split will take a mental and emotional toll on them. They will have questions, concerns, and pain, and they will need time and support to heal—even if they are technically adults when their parents’ marriage ends. The idea that “they’re adults so they’ll be fine” is completely untrue. If you’re going through a gray divorce yourself, be mindful of the many negative ways your adult children may be affected, and do your best to help them through the healing process.
Lesson #4: Avoid Litigation and Use a Mediator or Collaborative Attorney Instead
One reason parents may put off what they believe is an inevitable divorce is to spare their young children the trauma of having to go to court. If that’s why Bill and Melinda waited, and it wasn't because they were actively working to fix their marriage and resolve their differences, I hope they were fully aware of the benefits of using mediation or collaborative services. With both of these non-litigation approaches to divorce, control remains with the couple and their attorneys instead of being handed over to a judge. Children’s concerns and preferences are weighed more seriously. And with a collaborative divorce, there is a child specialist whose role is specifically to ensure the children’s welfare and best interest are treated as paramount.
I’m guessing the cost of divorce attorneys wasn’t a major consideration for the Gateses, but for those of us who aren’t independently wealthy, cost is always a concern—and both mediation and collaborative services are often less expensive than going through litigation. Even if you can “afford” to hire the best attorney to protect your personal financial interests, if you have children of any age, please consider pursuing mediation or collaborative services. In my experience, outcomes are far more positive, enforceable, and healthier for all members of the family if you can avoid litigation.
Lesson #5: A Prenuptial Agreement Helps Protect Everyone in the Family
I was certainly surprised (as I’m sure you were) to learn that the Gateses didn’t enter into their 1994 marriage with a prenuptial agreement. After all, Bill had become a billionaire in 1987 and had been included on the Forbes list of the world’s wealthiest people every year since. Melinda, on the other hand, was one of his employees at Microsoft. In 1994 when they married, Bill was the richest man in the United States with a net worth of $9.35 billion, and Melinda was still his employee. The financial imbalance was dramatic, and the potential for problems was obvious. We can only assume that when they married, they believed it would last forever, just as everyone does.
The radical financial disparity between Bill and Melinda makes their situation highly unusual, but financial imbalance exists to some degree at the outset of most marriages. Even if you just know you’ll stay together forever, going through the process of putting together a prenuptial agreement is a valuable exercise. It helps you consider every aspect of your financial, familial, and professional lives and prompts conversations that are very enlightening. I would recommend that every couple start their marriage with a prenuptial agreement; but even if you never put one in writing, you’ll be better off for having had some tough discussions upfront. I can’t help but wonder if the Gateses missed an opportunity that might have made a difference in keeping their marriage and their family together.
Lesson #6: Even If You Don’t Have a Prenuptial Agreement, It’s Never Too Late for a Post-Marital Agreement
When Melinda quit her job at Microsoft to focus on family in 1996, it was a perfect opportunity for the couple to consider putting together a post-nuptial marital agreement. They were having their first child, and Microsoft was booming. Household roles were being defined and solidified. External pressures were growing, as were both financial opportunities and risks. Again, I find myself wondering if the couple missed an opportunity to discuss how things were changing and how they might protect themselves and their children in the event of divorce. There’s little doubt they both considered divorce to be very unlikely, and surely both were confident they’d have the financial means to take care of their children. Unfortunately, we know now that only the latter would prove true, but that their marriage would end, and now it has.
In terms of finances, their lives are now several magnitudes more complex than when they welcomed their first child. Unless they have been very disciplined throughout the years about creating specific contracts and documents about their individual liabilities and responsibilities, they are unquestionably facing a lot of messy and frustrating work ahead. When they formed The Bill and Melinda Gates Foundation in 2000, they missed another opportunity to create a post-nuptial marital agreement.
Lesson #7: Update and Amend Your Agreement When Things Change
It’s been reported by the Associated Press that both Bill and Melinda will continue to work together as co-founders of The Bill and Melinda Gates Foundation, one of the world’s largest charitable foundations with an endowment of $65 billion ($15 billion of which was recently added by the couple as a gesture of their shared commitment to the foundation). What’s of particular interest is the agreement they’ve made--if they can’t continue to work together as co-chairs, the solution has already been determined: Melinda will resign as co-chair and trustee, Bill will effectively buy her out, and Melinda will “receive resources from him to do her own philanthropic work.”
Again, I find myself wondering if this is the deal the couple would have made if they had created a marital agreement years ago when their marriage was on solid ground. It’s difficult for most of us to feel any empathy for a couple who is negotiating how many billions will go to each person and his or her respective charitable foundation. But might Melinda remain in the situation even if it becomes unbearable so as not to lose her ability to contribute to the organization both she and Bill refer to as their “fourth child”? She’ll never have to worry about surviving as a woman from an earlier time may have, but the relative losses would undoubtedly be painful for her if she and her former husband cannot both agree they can work together. A marital agreement might have provided her with a higher level of protection in this regard than what she has with the current agreement.
Lesson #8: Working Hard for the Best Should Include Preparing for the Worst
The Gateses are obviously handling their divorce very privately, as is their right, and as is probably wise. But even with limited knowledge of their circumstances and agreements, we can extract valuable lessons. During the course of a marriage, you may grow your family, acquire assets, incur debt, increase your net worth, create businesses or non-profits, buy property, make investments, and become more and more financially entangled. The time to document agreements about what you will do if the marriage ends is NOT after you’ve decided to call it quits...or even when you fear things may be unraveling. The time to discuss and decide important things is when you both are in a loving, supportive, compromising, and giving frame of mind. I can’t tell you what a difference it will make for you and your children if you can avoid “duking it out” through anger, resentment, fear, and hurt feelings.
Remember These Lessons
Enter your marriage with a prenuptial agreement, or create a post-nuptial marital agreement if you’re already married, and update it as married. Commit to using a mediator or collaborative attorney if the unthinkable happens and your marriage comes to an end. Protect your children from pain as much as possible because even when they’re all grown up, they’re always your “babies”). And tend to your marriage and your partner with constant and consistent care.
One last thought: if you are considering or facing a gray divorce and there is no way to salvage your marriage, take heart. Your life isn’t over, and your chance for happiness is not gone. You still have tremendous opportunities for joy ahead of you. If I can help you to get through this painful event so you can begin the next phase of your life, I would be honored to do so. Please contact me for a completely confidential conversation.
How Bill and Melinda Gates Can Make Their Divorce Easier On Their Children
"Bill and Melinda Gates - NPG Washington DC" by FaceMePLS is licensed under CC BY 2.0
It was sad for me to hear the news of Melinda and Bill Gates deciding to separate after 27 years of marriage. I have seen the increase myself of what is being called the "Gray Divorce" or in the Gateses' situation, perhaps the "Silver Divorce." Confusing sometimes, isn't it? They seemed to have it together.
Unlike many divorcing couples, the Gates probably were not fighting over who forgot to log in the ATM withdrawal without telling the other. I mean with a net worth of roughly $130 billion, it doesn't appear there were money woes. While there have been rumors of infidelity, their public outcry was for us to honor their "space and privacy" at this time. I really hope we do--for them, and especially for the sake of their children. There's likely to be a lot of grieving going on, not just with them, but with their entire family.
It is mystifying watching couples separate when they seem to have a really great marriage. After all, Bill and Melinda regularly travelled and laughed together, and shared mutual interests. They taught their children about world hunger, health risks, and poverty and then formed a successful charitable organization to put actions to their words and caring motives.
After viewing a few snapshots of the Gateses' children on vacations and meetings with world leaders with their parents over the years, I couldn't help but want to reach out and ask them about their feelings about all of this.
Divorce Affects Children at Every Age
Their oldest, Jennifer, age 25, is in medical school, and seems to be close to getting married herself. I wonder if she worries about getting married or how best to make it a lasting commitment. Or maybe she wonders about how life will be different for her younger brother Rory, who's 21. Perhaps she is more concerned about how her younger sister Phoebe is handling this shocking news, since she is barely 18 and has just endured a COVID high school experience.
One thing is for sure: these young adults are greatly affected by their parents’ decision to divorce and likely have no power to change it. Research has shown that no matter the age of children when their parents decide to divorce, they all wish their parents would have talked more with them about it and allowed their voice to be considered, or at least heard and acknowledged.
Collaborative Divorce Keeps Families Out of Court and Supports Privacy
I hope Bill and Melinda decide to use a confidential no-court option such as a collaborative divorce process, as it would honor their need for privacy while still equitably resolving their differences with skilled legal representation. They can have a team of trained professionals to address the financial, legal, and emotional aspects of their decision, and even allow their children to have a voice to bring understanding to their needs, even as adults.
Children Have a Stronger Voice with a Collaborative Divorce or Mediation
What type of divorce process allows adult children to have a voice? Certainly not the traditional litigation model. While there are mixed views about having minor children of divorce speak to a judge about their preferences, more courts have been willing listen to their input and give some weight to their opinion if the child I considered to be a "well-reasoned minor." (This is obviously somewhat of a vague term, but generally it means the court recognizes the young person as having a good head on their shoulders.) No courts interview adult children because when there are no minors involved, there is no custody dispute--the kids are no longer kids.
In California, even a minor child's preference or choice regarding living arrangement does not control the judge's decision, so outcomes vary. It is more common for children's views to be seriously considered in voluntary "out of court" processes such as mediation or collaborative law where couples can mutually agree to involve a trained mental health professional called a "child specialist." This specialist can interview not only the children, but also other adults involved in the lives of the children such as therapists, teachers, sports coaches, and tutors.
Even Adult Children Need Time to Heal
Perhaps Bill and Melinda waited until Phoebe turned 18 for a reason. Maybe they saw the benefit of a divorce with no custody battle, and figured Phoebe would be off to college and largely unaffected by their split. But the pain still runs deep for children whose parents divorce, even when the child is technically an adult. It is important to address divorce as a painful disruption to the entire family dynamic, and each member of the family—regardless of age—will need to go through a personal healing process.
No Prenuptial Agreement?
As a side note, I was a bit surprised by the news reports that they had not entered into a prenuptial agreement. However, since neither Bill nor Melinda had any children before they married, perhaps they felt they didn't need documented protection—at the time of the wedding, there was no fear that their biological children would not receive an inheritance. Even so, the absence of a prenuptial agreement opens them up to more stressful conflicts over finances and assets, but I’m hopeful that will not be the case for them.
Good Communication and Respect Will Help Them and Their Children
Overall, I wish the Gates family only the best. My hope is that as parents they model good communication and respect for one another throughout this divorce process, and continue to teach Jennifer, Rory, and Phoebe about how to use their talents, skills, education, and finances to serve others. May they continue working together, as a family, so that the needs of those experiencing disease and poverty in our world will be met by their joint efforts.
Despite the bumps in the road ahead that will inevitably come as the result of a marriage coming to an end, may they all find the right path for their future.
There are many lessons to learn from the story of this high-profile divorce. Read my follow-up post, 8 Lessons We Can Learn From the “Gray Divorce” of Bill and Melinda Gates.
Learn more about out-of-court options for divorce including collaborative practice and mediation services.