Q1 2025 Wealth Strategy Insights
by Elaina Serotte, CFDA, CFP, Principal, Wealth Advisor
What is a divorce?
"Divorce" refers to the legal process of ending a couple's relationship. For the purposes of this document, "spouses" and "marriage" include legally married individuals and registered domestic partners. Our discussion also covers unmarried couples.
What must happen to be divorced?
You must obtain a Judgment. This is a legal document declaring that your marriage is dissolved. Typically, this includes allocating your income, debts, assets, and parenting responsibilities. For unmarried parents, a Judgment defines your parental relationship and establishes financial obligations and parenting responsibilities.
What must happen to be divorced?
You must obtain a Judgment. This is a legal document declaring that your marriage is dissolved. Typically, this includes allocating your income, debts, assets, and parenting responsibilities. For unmarried parents, a Judgment defines your parental relationship and establishes financial obligations and parenting responsibilities.
How does the court determine your Judgment?
There are two ways to get a divorce, but they are not exclusive. In less than 5% of family law cases, your Judgment is after a trial where the judge applies legal principles to your situation. In all other cases, you and your spouse negotiate the Judgment without a trial. Often, couples first go to court, where the judge makes some decisions, and later, they settle other issues without the judge, often with professional assistance. Some couples prepare for a trial and then settle at the courthouse. Some couples never see a judge and resolve all issues themselves.
What must you do before the court can file your Judgment?
Divorce, while still a legal process, has a few absolute requirements:
• File and serve a Petition and Summons
• The earliest that you can be divorced is six months and one day from service of the Summons
• Abide by the Standard Family Law Restraining Orders
• Complete and serve a Declaration of Disclosure
• Obtain a Judgment
Decisions included in your Judgment
You may need the help of a professional to answer these questions:
• How will you share assets and debts? • How will you share income?
• How will you share parenting?
While information is available from many sources, you need to be sure that it is current and legally correct, that you understand the tax implications, and that you are doing what is best for your family.
Why talk about Divorce Options?
Understanding your divorce process options is crucial for you and your family. The approach you choose will impact not only your personal well-being but also your parenting relationship and financial situation. Your goal should be an outcome that maximizes your family's collective resources—including income, assets, and debts—while preserving valuable relationships with family and friends.
Even if you no longer desire a personal relationship with your spouse, remember that children benefit when their parents maintain a functional working relationship. Consider this aspect carefully as you make decisions about your divorce process.
Divorce is more than a legal process. It is a transition that profoundly affects you, your children, and your family
Divorce is a decision with deep emotional reactions for you, your spouse, your children, and possibly your extended family. Here are a few questions to ask yourself: • How will your children view your changing relationship? • How will your spouse view your changing relationship? • How will people close to you view your changing relationship? You can make choices about your process and conduct that influence the feelings and responses of all these people. Divorce doesn't have to force everyone to take sides. Children, in particular, should never be asked to choose between parents. It's important to understand that regardless of your chosen divorce process, family and friends don't need to divide their loyalties. They can support you while also maintaining relationships with your spouse if they wish. This creates a healthier environment for everyone involved, especially children.
Divorce may be commonplace, but not for you
Divorce may seem routine to others, but it's never routine when it happens to you. This major life transition creates a crisis for you, your children, and your spouse. During this time, you'll likely experience a range of unexpected feelings and behaviors that might surprise or even shock you. It's difficult to recognize that even the spouse who initiated the divorce is going through intense emotions.
These emotional experiences vary in both intensity and duration from person to person. Returning to a sense of normalcy might take one, two, or more years.
The stress of divorce can impair your ability to function effectively as a parent, friend, and employee. During this challenging period, you may experience the following:
• Difficulty thinking clearly
• Impaired judgment
• Difficulty making rational decisions
• Depression
What should you think about when choosing your divorce process?
Be aware that choosing to divorce carries legal, emotional, and financial implications. What factors should you take into account when deciding your next steps?
What are your personal considerations?
• Are you and your spouse able to make decisions
together? What types?
• Are you in a same-gender relationship? How does
this affect your separation?
• Has there been violence in your relationship?
• Are you able to sit in the same room with your
spouse?
• Is alcohol or drug use impacting the divorce?
• Is either of you in a particularly challenging mental
state right now?
• What are your demands at work?
• Do you have flexible scheduling to attend court?
• Can you trust your spouse to be honest?
• Do you have children?
• What kind of a relationship do you want with your
children?
• Are any of your children disabled, or do any have
special needs?
• Is your future relationship with your spouse imp to
you?
• Is your spouse working? Is your spouse's schedule
flexible?
What are your financial considerations?
• Do you or your spouse have special compensation?
(stock options, restricted stock units, bonus plans,
commissions, etc.)
• Same-gender couples and domestic partners need
unique strategies to address particular tax and
historical considerations.
• What is your budget for the divorce?
• How will you finance the divorce?
• How complicated is your financial situation?
• Do you have a retirement plan?
• Does either spouse operate a business?
What are your legal considerations?
• Do you have a separate property?
• Do you have a premarital or postmarital agreement?
• If you are in a same-gender relationship, what is
your legal relationship? Married? Domestic
partnership? Something else?
• Are you or your spouse under a restraining order?
• Is filing first crucial to you?
• Do you want a legal separation or a divorce?
• Are there grounds for a nullity?
• Do you need to consider jurisdictional (residency)
issues?
• What is your date of separation, and does it matter?
What are your Divorce Options?
It is not uncommon to try more than one of these processes. You may start with traditional representation and/or be unrepresented and switch to mediation or collaborative divorce (or go the other way if non-adversarial approaches don’t work).
Do-It-Yourself
Resolution is created by direct negotiation between you and your spouse with little or no professional assistance.
Do-It-Yourself: Advantages
• You may consult with divorce professionals.
• Do-It-Yourself books and Internet sites are readily
available.
• You may feel more in control. You can design yoursolution mainly on your own time.
• It may be less costly unless difficulties arise.
• A family law facilitator in your county can assist you
with forms.
Do-It-Yourself: Disadvantages
• You have no professional guidance or advocacy.
• Decisions may not be well informed.
• Specific complexities may exist for same-gender or
unmarried couples that standard forms may not
address or may be unfamiliar to court personnel.
• Most “do-it-yourselfers” have a reasonably simple
estate. Even so, legal, financial, and tax
complexities may exist and be unknown to you.
• If the judge decides your matter, you lose control,
you must know the legal rules, and you have no help
arguing your case.
Traditional Rpresentation
Traditional Representation is an adversarial process in which resolution is determined by applying the law regarding rights, responsibilities, and entitlements. This is the “default” process. If you and your spouse disagree with another method, you must go to court for a judge to decide.
Traditional Representation: Advantages
• The law defines what you and your spouse get or must give up.
• Traditional representation has timelines with deadlines for decisions.
• The court can compel either of you to perform certain acts (e.g., produce documents, pay support, turn over property,
grant access to children, etc.).
• The law provides a framework to address nearly all facts and situations. The issues within the court's power to resolve
will be resolved.
• The judge makes decisions, sometimes regardless of the degree of cooperation or objections by either of you.
• The court can provide protective orders in situations involving coercive control and intimate partner violence.
• Formal discovery, both written and oral, is available and may help you find hidden assets and debts.
• Enforcement sanctions are available when either spouse fails to disclose information or to cooperate in the settlement.
Traditional Representation: Disadvantages
• Traditional representation is typically the costliest process (especially if your matter goes to trial).
− It may take longer; court calendars are often very congested.
− You may have numerous court appearances before trial.
• Traditional representation may polarize the family by creating a win / lose mindset.
• Traditional representation tends to result in lawyer-driven negotiations; your lawyer significantly influences your decisions about allocating parenting responsibility and financial resources.
• The judge makes decisions with limited information; you lose control to lawyers and the court.
• You lose control of decision-making and the timing of decisions.
• The judge is limited to the applicable law. There is no room for “out of the box” thinking.
• Decisions imposed by a court are more frequently violated.
• The law does not address all situations, such as requiring a parent to pay for college, providing religious or moral training, or giving you what you may regard as “fair.”
• Lack of cooperation may dramatically escalate financial and emotional costs and interfere with your children's developmental needs.
• Courts may be unfamiliar with the unique concerns of same-gender couples:
− Such as two dads or two moms.
− Spousal support and property settlements may not reflect the length of the relationship because legal recognition has been different at various times.
− Same-gender couples’ rights are not identical everywhere.
• Agreements imposed by a judge are more likely to be challenged.
Mediation
Resolution is determined by you and your spouse and facilitated by one or more neutral professionals.
Mediation: Advantages
• The mediator usually drafts agreements from a
neutral perspective, which are generally reviewed by
your consulting lawyers prior to signature.
• You and your spouse control the outcome, rather
than a judge or arbitrator making decisions for you.
• Decisions made together are more likely to be kept.
• Typically, it is shorter and less expensive than
traditional representation.
• The mediator:
− Facilitates agreement and identifies differences.
− Provides a structure for gathering information.
− Provides a structure for creating solutions.
− May educate about general aspects of
parenting, law, and finances.
• One or more neutral professionals meet with both of
you simultaneously. You have choices regarding
your neutral professionals. You may work only with a
legal professional or with a combination of financial,
parenting, and legal professionals.
• Mediation promotes interest-based decision-making.
• Mediation is voluntary, private, and confidential.
• You are in control of the process and the pace.
• You can discuss and adopt options that the law
could not order.
• Agreements made in mediation, once signed, are
fully enforceable.
• Both of you are expected to negotiate in good faith.
• Mediation may involve advice from various
professionals, particularly your consulting lawyer,
aligned with your interests.
• Mediation may include child specialists and financial
specialists.
Mediation: Disadvantages
• Mediation is not appropriate in the presence of
coercive controlling behavior and intimate partner
violence.
• In mediation, no one can:
− Compel a party to make decisions
− Compel a person to keep commitments
− Compel a person to meet deadlines or complete
tasks
• Mediation may not be the best solution unless there
is a commitment to cooperation, although a mediator
can often encourage it.
A mediator does not represent or advocate for either
person.
• A mediator may not be able to fully balance each
person’s ability to negotiate in their respective
interests.
• A mediator is not a decision-maker.
• You may not be comfortable in the same room with
your spouse.
• Each of you must depend on your capacity to
negotiate; other people are rarely with you while
negotiating.
Collaborative Practice
You and your spouse determine the resolution, supported by a team of legal, financial, and mental health professionals.
Collaborative Practice: Description
• You work with a team of divorce professionals trained in collaborative negotiation to resolve the critical questions that
must be addressed.
• Your collaborative team:
− You each have your lawyer who is specially trained in collaboration and represents your interests.
− You jointly have a neutral financial specialist who gathers and organizes your financial information in a manner
that you can understand and helps you consider the potential impact of your financial decisions.
− You each have a coach who assists you with communication, managing emotions, and designing a parenting
plan.
− If children are involved, a child specialist acts as “a voice for your children” and educates and consults with you
throughout the process about the impact of divorce on children. (Coaches and child specialists are licensed
mental health professionals)
− Other professionals may be involved, for example:
○ Real estate consultant
○ Career planner
○ Business evaluator
○ Special needs resources
• You sign an agreement up front that the professionals will not go to court (the “disqualification agreement”).
− The team resigns if you go to a third-party decision-maker, judge or arbitrator.
− This agreement reinforces the commitment to collaboration.
• Participants commit to:
− Act with integrity.
− Correct mistakes, even when they come to your possible disadvantage.
− Treat each other with respect.
− Disclose material information openly and fully, requested or not.
Collaborative Practice: Advantages
• Interdisciplinary teams enhance the likelihood of
reaching your highest goals for your family and
yourself.
• You are more likely to find “win-win” solutions.
• Collaboration is an excellent way to protect the
interests of same-gender couples and unmarried
parents:
− Courts may be inexperienced with your
circumstances
− The law continues evolving, so same-gender
couples must consult legal professionals to get
current advice
• Team expertise allows efficient task allocation to
team members with specialized skills. Services are
rendered more efficiently and professionally,
reducing overall cost. You focus on practical skills to
promote and foster positive co-parenting and
continuing relationships with family and friends.
• Promotes customized, interest-based agreements.
• You and your spouse have control as you develop
the options for your family.
• The financial specialist prepares the financial
disclosure documents for both of you, thus avoiding
significant duplication and expense.
Collaborative Practice: Disadvantages
• In collaboration, no one can:
− Compel a party to make decisions
− Compel a person to keep commitments
− Compel a person to meet deadlines or complete
tasks
• The disqualification agreement means the
professionals will not work with you in an adversarial
proceeding involving your spouse.
• You may have added costs if you transition from
Collaborative Practice.
• Your upfront cost may seem high as you retain
several professionals at the start of the process;
having multiple professionals may feel expensive at
a time when you may be financially strapped.
• Scheduling meetings with multiple participants may
be challenging.
• It may not be appropriate when intimate partner
violence / coercive control is present.
Which process may work best for you?
From among your options of Do-It-Yourself, Traditional Representation, Mediation, and Collaboration, what process do
you believe may work best for you and your family? Why is this the best option for you? Even if you start in an adversarial
process, non-adversarial options remain available.
Points to consider when comparing processes:
• Both you and your spouse must agree to use any
process other than litigation
• Gathering and organizing the information you need
• Designing an appropriate parenting plan for your
children
• Negotiating for what you need
• Intimate partner violence or other coercive
controlling behavior in your relationship
• Your ability to make decisions
• Control over decision-making by both you and your
spouse
Divorce is often a complex and emotionally challenging process. It can take a significant toll on your mental and emotional
well-being, and it typically requires a considerable investment of time and effort. Every situation is unique, and the
decisions you make during this time can have long-lasting effects on your future. Take the time to carefully evaluate your
circumstances, and don’t hesitate to seek guidance. Reaching out to a qualified professional—whether it’s a therapist,
mediator, advisor, or attorney—can provide valuable support and help you navigate the process with clarity and
confidence.
1 This article references resources published at https://collaborativedivorcecalifornia.com/divorce-options/
It's important to note that laws concerning same-gender couples have undergone significant changes in recent years. If
these matters apply to your situation, we strongly recommend consulting with legal professionals who specialize in this
area to receive guidance tailored to your specific circumstances.
This material is provided for informational purposes only and should not be construed as investment advice. Different types of investments involve varying degrees of risk. Discussion or information contained in this presentation does not substitute personalized investment advice from Parallel or another professional advisor of your choosing. Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of Parallel Advisors, LLC (“Parallel”). Parallel cannot and does not provide warranties nor representations as to the reliability or accuracy of the content it shares.
