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Pre-Divorce Financial Planning: Could This Be the Next Frontier?

By Carl M. Palatnik
November 30, 2004

Over the past several years, alternative dispute resolution (ADR) methods such as mediation and collaborative law have been increasingly applied to the divorce process. This phenomenon has been largely due to 1) incompatibilities between our advocacy system and the need for viable outcomes, and 2) an increased recognition of the importance of resolving emotional issues, particularly those involving children. In short, these approaches sometimes lead to better results than traditional methods.

The increasing application of ADR is indicative of the fact that the traditional approach to resolving issues in divorce is flawed. However, mediation and collaborative law are simply alternative approaches to resolving disputes and not necessarily approaches for achieving better financial outcomes. Success in ADR is often measured by the ability to achieve the same results as in traditional litigation, albeit in a less contentious or less prolonged fashion. With the advent of no-fault divorce, and even with the archaic application of fault in states such as New York, divorce has become largely about money. This has brought to the forefront a new dilemma for the divorce practitioner — how to resolve the divorce, whether through litigation or through alternative means, not only amicably but also in a financially workable and sensible way.

Pre-Divorce Financial Planning

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