Couples that seek to dissolve their marriages without the challenges of litigation often turn to alternative dispute resolution. Non-litigation settlement strategies are particularly effective for couples committed to maintaining respectful relationships with their spouses after the divorce, and may also minimize negative consequences facing the children. The following issues, among others, are typically amenable to such settlement strategies:
- Property divisions
- Spousal support
- Interim living arrangements
- Child support
- Custody and visitation
Divorce Mediation and Collaborative Divorce, Generally
Two kinds of alternative dispute resolution models, often used by divorcing couples, include collaborative divorce and divorce mediation. In divorce mediation, the parties hire an independent neutral third party who brings the spouses together (with their attorneys if any were hired) to assist them to reach a satisfactory divorce settlement. In collaborative divorce, a relatively new form of dispute resolution, each spouse hires their own attorney, and the two attorneys and their clients negotiate directly with each other without resorting to litigation.
Although divorce mediation has become a popular alternative to litigation, collaborative divorce, available in most states, is also beginning to establish itself as a successful form of divorce dispute resolution. Further, just as the practice of mediation is common in numerous other areas of law, collaborative law is starting to be used for numerous non-family law disputes, such as employment and business disputes.
Same Goals, Different Approaches
The underlying goal of both divorce mediation and collaborative divorce is to allow couples to reach mutually satisfactory divorce settlements in lieu of facing the unpredictable results of judge-imposed decisions. While both resolution models have proved to be generally effective, numerous differences may affect a couple’s decision when deciding which would be most appropriate.
Fees and Experts
Although few comparison studies have been conducted with respect to the costs of collaborative divorce, the general consensus is that litigation, on average, is more expensive. One study indicates that collaborative divorce fees generally reach about 1/3 the cost of the typical litigated divorce. Expenses will increase when there is a need to hire outside professionals. For instance, if the attorneys reach an impasse or lack the expertise to address a particular issue such as the value of one of the spouse’s businesses, a financial expert may be retained for assistance. In collaborative divorce, the parties generally split all costs and fees.
Similar to collaborative divorce, in mediation the parties generally split the mediator fees. However, unlike collaborative divorce, the parties are not required to hire attorneys (although the option generally remains open). Mediator fees can range widely, being as low as $100 to $200 per hour and sometimes exceeding $400 per hour, often depending upon the type of law involved or the complexity of the issues. Many mediators have separate fee scales for couples who choose to schedule the whole day
In July 2001, the United States Department of State implemented a law regarding passport application procedures. Under the Two-Parent Consent Law, as amended in 2008, both parents are required to consent to the passport application for a minor U.S. citizen under the age of 16. By putting this law into practice, the Department of State sought to decrease the likelihood that a U.S. passport will be used to facilitate an international parental child abduction.
Basic Requirements of the Law
Under U.S. immigration law, passport applications for minor children under age 16 must be filed in person by a parent or an individual specially authorized as a person “in loco parentis.” (This term is used to identify a foster parent, or other appropriate authority, e.g., a county custodial agency, protecting the minor’s legal rights). The minor must appear in person when applying for the passport. Either parent, whether a U.S. citizen or not, may apply for a U.S. passport on behalf of the minor child. However, in addition to establishing the child’s identity and U.S. citizenship, the adult applicant must also document his or her compliance with the Two-Parent Consent Law.
Most people are aware that a surviving spouse is usually entitled to inherit all or a large portion of the estate of a deceased spouse. Fewer understand the effect on estates if one spouse dies during a legal separation or after a divorce. After a divorce, many neglect to change wills that specify bequests to a former spouse or their beneficiary designations for life insurance and retirement accounts. State law may dictate what will happen in such situations. However, provisions and procedures can vary substantially from state to state. Additionally, federal law may be implicated, especially when pension and retirement accounts are involved.
Minors have no legal capacity to manage property. Thus, transferring property and other assets to minors can be problematic. For example, parents or other adults may wish to convey a small amount of property to a minor without investing the time and expense of establishing a trust.
Another option is to set up a custodianship for the minor. Under a custodianship, the transferring party names a custodian and transfers the property into an account in the minor’s name. The custodian holds and manages the custodial property for the benefit of the minor. A custodial account is irrevocable and belongs to the minor as the owner.
Uniform Transfers to Minors Act (UTMA)
The Uniform Transfers to Minors Act of 1986 (UTMA) was passed in order to eliminate some limitations of the earlier Uniform Gifts to Minors Act (UGMA). All states have adopted some form of the UTMA or UGMA. The UTMA provides a convenient method of allowing the transfer of property to minors without setting up a trust.
In a custodianship, an adult custodian holds and manages property for the benefit of a minor child until that minor is old enough to receive the property. A UTMA transfer is irrevocable, and the custodian must relinquish the property to the minor as soon as they reach the age of majority, which varies by state (usually 18 or 21, sometimes 25)
The federal Defense of Marriage Act (DOMA) was signed into law by President Clinton on September 21, 1996. DOMA defines “marriage” to consist exclusively as a heterosexual union of a man and a woman. Further, DOMA directs federal agencies to recognize only opposite-sex marriages for the purposes of enacting any agency programs.
Over the years, intra-family immunity from lawsuits against other family members developed; “parental immunity” and “spousal immunity.” Some have suggested that these immunities were part of a body of rules that historically limited tort recoveries in general. At one time, there was even a certain stigma to bringing a lawsuit against another family member for damages. This radically changed in the latter half of the 20th Century, when courts (and laws) began to expand liabilities and recoveries for a number of reasons. Not all states recognized the doctrines of parental and spousal immunity from suit, but most states did. Recently, however, more states have abandoned or created exceptions to these doctrines.
Upon termination of a marriage by divorce, one of the most difficult problems is often division of the couple’s real and personal property. Although there are considerable differences in the way states treat property acquired by spouses while married, there are two common types of distribution schemes.
Tax Issues Relating to Qualified Domestic Relations Orders and Divorce
An increasingly large portion of the assets of married couples consist of rights to payments and stock from pension plans. In many states such assets are subject to division during a divorce. Divorce and division of property are generally controlled by state law, but pension plans are controlled by federal law in many respects.
Absent a QDRO, the amount withdrawn from the plan thus becomes income and/or capital gains to the plan participant, not the former spouse. If a valid QDRO is in place, however, the distributions from the plan are treated as income and/or capital gains to the alternate payee/spouse. However, if distributions from the plan are used to satisfy child support or payments to some other dependent of the plan participant/spouse, the distributions are still treated as taxable to the plan participant/spouse for federal income tax purposes, notwithstanding the existence of the QDRO.
According to the Child Welfare League of America, an estimated 200,000 children have a mother in prison, and at least 1.6 million children have a father in prison. As such, many children have been forced to enter the foster care system, and there has been a significant increase in the number of children visiting their incarcerated parents.