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Treat Your Divorce Like a Business
Divorce can be one of the most emotionally and financially devastating events a person will ever experience. While divorce presents painful realities in a terrible light, there are ways to minimize negative impacts.
Think of a divorce as the breakup of one company into two independent subsidiaries. When a company is in the throes of division, there can be fierce competition for assets, but the bigger picture often proves that it is worthwhile to cooperate. Looting the entire estate can be emotionally tempting in a divorce but, just as in the business world, the fallout can be devastating.
Accordingly, it is worthwhile exploring how some of the best-known business principles can guide you in dismantling your marriage:
The client always comes first. Sometimes you really need to think about what the future interests of each member of the partnership (the client) really are. Are you, for example, more interested in the china cabinet you know your wife loves, or your golf clubs?
Is it really worth "winning" an extra overnight if you have to suffer dealing with an angry father and disgruntled children for the next 10 years? Whatever your decision, you would do best to consider not only your children and spouse, but also your extended family as being part of the "client." Make no mistake, you all will be heavily affected by your divorce, and unlike you, the others have no say in the process. Moreover, these people can have huge potential to make your life better or worse following a divorce. Treat your children's and extended family's interests with care and remember that future Thanksgiving dinners, attendance at family weddings, and other important events hang in the balance.
Capital: Your capital can take a huge hit in a divorce if you are not careful. Here are some steps you can take to preserve it. Reduce your cash flow immediately. Doing so not only will hopefully encourage your spouse to do likewise, but it will make dipping into assets to fund two households less likely. Usually, out of control spending is a spiral that sucks both spouses into a lose-lose scenario, where one spouse does not want to be outdone by the other.
Make decisions carefully with regard to preserving your future financial situation and seriously consider using a certified divorce planner to assist you. Many heartfelt decisions, made during a divorce, turn out to be economic folly later on. Keeping the 'dream' house can mean overextending your cash flow, which in turn leads to consumer debt, equity loans, and eventually, an apartment.
Reputation: Lastly, decide how much it is worth fighting over small issues. I've had clients fight over property worth less than the attorney fees spent on the fight. Is it worth spending $2,000 in attorney and mediator fees to fight over division of family photographs, for example, when you can just copy them?
Reputation is everything. This is a very large concern that divorcing couples rarely consider. Airing your dirty laundry in public is generally a bad idea. People are fascinated and even sympathetic, but your reputation will take a huge hit and it can affect your future employment, possible future relationships and the dignity of you, your spouse and even your children. If you need to vent, get a therapist.
Conduct yourself honorably, even if your spouse does not. Reputation is particularly measured by behavior in the face of adversity: anyone can be reasonable under normal circumstances. It is a mark of integrity to keep your head about you when all around you have lost theirs.
The goal is to provide superior returns to shareholders. Profitability is critical: The shareholder in a divorce is the spouse and profitability as a metaphor can be whatever goal each spouse wants to achieve. For some, the goal will be a clean break; for others, it will be a combination of achieving parenting goals and lifestyle goals; and for yet others, it can be money, which, while it isn't everything, certainly makes life possible if not easier.
Understanding what will make your divorce profitable for each of you is key to finding a good deal. If you use the knowledge of what the other spouse wants to try to hurt them, they will do the same to you. For example, if seeing your kids everyday is important to you, whereas reading the bedtime story is important to your ex, suggest a parenting plan that maximizes time to you during the day in exchange for extra overnights to your spouse. Such solutions will require you to think outside the box that - in the case of parenting - is usually measured in overnights. Think about what really matters to you.
In one recent case, a mother took all the overnights in exchange for the dad picking the teenager up from school every day, taking her to her soccer practices and all of her games, which meant he had dinner with his daughter six days a week. It was a perfect, if unconventional, parenting plan for all concerned.
Be smarter. Be proactive. Be creative. We all know how it can be done, but one size does not fit all. Your situation is unique. Your values are different. Find solutions that meet your needs, and defy convention if that is what it takes. Recruit the best person for the job: Choose the best attorney, the best financial advisor, and get a coach to help you through this painful process. Businesses hire consultants all the time to help them plan mergers and manage plant closings. You can too. Moreover, allocate tasks - especially in dividing up parenting - based on strengths, rather than weaknesses.
In the business world, major transitions are planned carefully to maximize outcomes. Businesses have learned to temper emotions to make sure that they don't derail corporate goals. There's an old adage in litigation: "Lose your head, lose your shirt." Nowhere does that apply as much as it does in domestic courts.
Think of a divorce as the breakup of one company into two independent subsidiaries. When a company is in the throes of division, there can be fierce competition for assets, but the bigger picture often proves that it is worthwhile to cooperate. Looting the entire estate can be emotionally tempting in a divorce but, just as in the business world, the fallout can be devastating.
Accordingly, it is worthwhile exploring how some of the best-known business principles can guide you in dismantling your marriage:
The client always comes first. Sometimes you really need to think about what the future interests of each member of the partnership (the client) really are. Are you, for example, more interested in the china cabinet you know your wife loves, or your golf clubs?
Is it really worth "winning" an extra overnight if you have to suffer dealing with an angry father and disgruntled children for the next 10 years? Whatever your decision, you would do best to consider not only your children and spouse, but also your extended family as being part of the "client." Make no mistake, you all will be heavily affected by your divorce, and unlike you, the others have no say in the process. Moreover, these people can have huge potential to make your life better or worse following a divorce. Treat your children's and extended family's interests with care and remember that future Thanksgiving dinners, attendance at family weddings, and other important events hang in the balance.
A Business' Main Assets Are People, Capital and Reputation
People: However angry you may be with your spouse, and however justifiable that anger may be, having your divorced spouse as an avowed enemy is a waste of that person as an asset. Take steps to preserve your spouse as an amicable ally, even if it means sticking your head under a pillow to shout all the things you would like to put on the billboard outside his or her office.Capital: Your capital can take a huge hit in a divorce if you are not careful. Here are some steps you can take to preserve it. Reduce your cash flow immediately. Doing so not only will hopefully encourage your spouse to do likewise, but it will make dipping into assets to fund two households less likely. Usually, out of control spending is a spiral that sucks both spouses into a lose-lose scenario, where one spouse does not want to be outdone by the other.
Make decisions carefully with regard to preserving your future financial situation and seriously consider using a certified divorce planner to assist you. Many heartfelt decisions, made during a divorce, turn out to be economic folly later on. Keeping the 'dream' house can mean overextending your cash flow, which in turn leads to consumer debt, equity loans, and eventually, an apartment.
Reputation: Lastly, decide how much it is worth fighting over small issues. I've had clients fight over property worth less than the attorney fees spent on the fight. Is it worth spending $2,000 in attorney and mediator fees to fight over division of family photographs, for example, when you can just copy them?
Reputation is everything. This is a very large concern that divorcing couples rarely consider. Airing your dirty laundry in public is generally a bad idea. People are fascinated and even sympathetic, but your reputation will take a huge hit and it can affect your future employment, possible future relationships and the dignity of you, your spouse and even your children. If you need to vent, get a therapist.
Conduct yourself honorably, even if your spouse does not. Reputation is particularly measured by behavior in the face of adversity: anyone can be reasonable under normal circumstances. It is a mark of integrity to keep your head about you when all around you have lost theirs.
The goal is to provide superior returns to shareholders. Profitability is critical: The shareholder in a divorce is the spouse and profitability as a metaphor can be whatever goal each spouse wants to achieve. For some, the goal will be a clean break; for others, it will be a combination of achieving parenting goals and lifestyle goals; and for yet others, it can be money, which, while it isn't everything, certainly makes life possible if not easier.
Understanding what will make your divorce profitable for each of you is key to finding a good deal. If you use the knowledge of what the other spouse wants to try to hurt them, they will do the same to you. For example, if seeing your kids everyday is important to you, whereas reading the bedtime story is important to your ex, suggest a parenting plan that maximizes time to you during the day in exchange for extra overnights to your spouse. Such solutions will require you to think outside the box that - in the case of parenting - is usually measured in overnights. Think about what really matters to you.
In one recent case, a mother took all the overnights in exchange for the dad picking the teenager up from school every day, taking her to her soccer practices and all of her games, which meant he had dinner with his daughter six days a week. It was a perfect, if unconventional, parenting plan for all concerned.
Be smarter. Be proactive. Be creative. We all know how it can be done, but one size does not fit all. Your situation is unique. Your values are different. Find solutions that meet your needs, and defy convention if that is what it takes. Recruit the best person for the job: Choose the best attorney, the best financial advisor, and get a coach to help you through this painful process. Businesses hire consultants all the time to help them plan mergers and manage plant closings. You can too. Moreover, allocate tasks - especially in dividing up parenting - based on strengths, rather than weaknesses.
In the business world, major transitions are planned carefully to maximize outcomes. Businesses have learned to temper emotions to make sure that they don't derail corporate goals. There's an old adage in litigation: "Lose your head, lose your shirt." Nowhere does that apply as much as it does in domestic courts.
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