Reciprocal Altruism Versus I’m Only in It for Myself

October 22nd, 2013

According to Herb Guggenheim, writing for CapitalM, a Mensa newsletter, the “only two social strategies that human beings use” come into play in divorce negotiations. They are:

> “Reciprocal Altruism,” which is the psychological equivalent of the Golden Rule, or “do unto others that which you would have them do unto you”; or

>“I’m Only in It for Myself,” which is an every man for himself concept that works in a dog-east-dog world.

Reciprocal altruism is based on the belief that kindness is rewarded. As the French say, “You send the elevator up to me and I’ll send it back down to you.” I’m Only in It for Myself, on the other hand, appeals to people who see the world as a hostile place where only the strong survive. Social Darwinists believe “the inferior, weak people are busy being nice to each other, they will swoop down and take what they want, when they want, no matter what the consequences may be.”

When spouses use reciprocal altruism, the negotiations can move to an easy conclusion; when the spouses try to rip and tear, the negotiations often break down.

Uncontested Divorce Makes for A More Gentle Climb

Divorce is not an easy road, but uncontested divorce is a more gentle climb for both spouses. Negotiating an uncontested divorce means that the two spouses are in agreement about the terms and conditions of their property division, spousal and child support, custody and visitation. In short, they have nothing lest to argue and fight about.

When couple can agree on everything, they are in effect their own negotiators. Although each spouse may want her or her lawyer to check the paperwork, the involvement of the attorneys is greatly reduced.

So are the legal bills because when a couple negotiate for themselves, they can sit down and do at no cost what lawyers do at a great cost. The courts will approve anything the spouses decide that is fair and reasonable.

Interest-Based Bargaining Versus Position-based Bargaining

Collaborative negotiators describe two types of bargaining that happens when spouses negotiate a divorce. They are interest-based bargaining and position-based bargaining.

In interest-based bargaining, the parties focus on their underlying concerns, needs or interests; in position based bargaining, the parties lock in early on inflexible positions defining their needs and wants.

In interest-based bargaining, the parties communicate what is important about an issue rather than arguing for a specific position or solution. In position-based bargaining, the parties become adversarial and go one against the other.

Interest-based bargaining aims to understand the other party, and it is cooperative. Position-based-bargaining, the traditional approach, allows for little emphasis on future relationships.

Couples and their lawyers who can negotiate interest-based positions find the resolution of a divorce settlement must less painful.

Negotiating a Divorce Is a Matter of Timing

Rarely do the two partners mutually decide on a divorce at the same time. Invariably, after some long period of reflection and consideration, one spouse decides to end the marriage and, one way of another, tells the other the marriage is over. Call him or her the leaver; the other, the left. The leaver does not decide impulsively and he or she may think about divorce for years before acting. The spouse left may take the news “on a continuum from resigned acceptance to utter shock and surprise.”

According to divorce mediator and psychologist Sam Margulies a “good divorce” happens when both spouses are ready to negotiate, that is, when both accept that the marriage is over. “If you are the one who wants out,” says Margulies, “you have to give your partner time to adjust, time to mourn and time to explore his/her own possibilities. Push too fast and your spouse retreats to the perceived safety of a lawyer who she thinks will “protect” her interests. Then you will have a long divorce.”

No One Gets It All

Sometimes when a marriage crashes the spouses become possessed by an idea that they can vindicate themselves in the divorce negotiations. That is, an angry spouse uses the negotiations — and the distribution of assets and liabilities — as a way of vindicating their own conduct during the marriage. In particular one spouse may wish to punish the other for real or imagined misconduct during the marriage.

It is easy to see that angry spouse is not going to be able to negotiate a fair and reasonable – equitable—divorce. No matter how hard it is, anger has no place in the negotiations, and no one gets everything he or she wants.

Taxes and Divorce

September 24th, 2013

Divorce Choice: Filing Jointly Versus Filing Separately

A couple married on the last day of a calendar year may file jointly even if permanently separated in anticipation of a divorce. Most middle-income divorcing couples find it advantageous to file jointly, and they can file jointly if they are married as of midnight on the last day of the tax year, Dec. 31. For example, Rufus and Rhonda separate in the spring, decide to divorce in the summer, and set to working on the property settlement in the fall, but they are still legally married on the last day of the year. Rufus and Rhonda couple may:

> file jointly (called “married filing jointly”);

> file married as separate people (called “married filing separately”); or

> under certain circumstances, file as single (when they are “deemed unmarried” or “head of household”).

Even if the divorce was finalized between Jan. 1 and April 15, they are still married when it comes to filing the previous year’s taxes. If, however, the divorce became official in December, they cannot file as married even if they were for most of the year.

A married couple is liable for taxes for the years they were married, and the IRS audits the tax returns of formerly married spouses. A former spouse is not liable for current taxes, just the taxes of the years when he or she was married. If a deficiency is found, the IRS can - and does - pursue either or both spouses for the back taxes and any penalties.

Despite their marital strife, however, most couples file jointly because it results in a lower total tax bill than any of the other options. (”Married filing separately” is the most expensive way for a couple to file). If they jointly, however, both of them are responsible for the taxes due. Each spouse is responsible for the entire debt because married couples have joint and several liabilities, which means they share the responsibility.

Other Tax Considerations

While joint or separate returns are important tax decisions that every divorcing couple makes in the last year of a marriage, divorcing couples make other tax decisions, and when they negotiate and honor their agreements in good faith, they can save themselves money and aggravation.

Wealthy couples may do an extensive analysis that considers the incomes and deductions of both spouses, the number of dependents, tax credits, applicable tax rates and contributions already paid to avoid penalties.

The I.R.S. considers spousal support — alimony — as income shifting. It is deductible to the payor and taxable to the payee. Sometimes for tax reasons, spouses decide to make the payments nondeductible to the payor and tax free to the recipient. On the other hand, child support is not deductible to the person who pays it, nor is it taxable to the person who receives it.

Couples must decide which spouse takes the dependency exemption, the child-care credit, and medical deductions for a dependent child. 

In property settlements, transfers between spouses are gifts and are not taxable. However, in order to pay a settlement, sometimes couples must disturb assets in a way that creates tax consequences. For example, taxes may result when a party must withdraw funds from a restricted account, such as a pension fund. Sometimes couples do “horse trading” to reduce the impact of taxes on the settlement. For example, the sale of assets received in a settlement, such as a house, may create a capital gains liability; or when both parties make an in-kind distribution of property, such as set-off and trades; or when the parties take future income from a pension to be received later.
Couples can shelter a primary residence from capital gains of up to $500,000, but the sale of other real estate may result in taxable events.

The distribution of any ERISA-qualifed pension, profit-sharing or bonus plan may have adverse tax consequences because under the I.R.S. Code and ERISA these benefits are not assignable, and can only be transferred via a QDRO.

Do Trial Separations Work?

September 6th, 2013

Expert opinion seems divided about the effectiveness of a trial separation in repairing a failing marriage.
Unlike marriages and divorces, which are formal and recorded, trial separations are informal. No one knows the number and frequency of such separations. In that sense, trial separations are similar to cohabitation, which also goes unrecorded.

Moreover, no one really has a firm definition of a successful separation. For example, suppose a separated married couple reconcile – then separate and divorce two years later. Was that separation successful in extending their marriage another two years?

Some marriage therapists say that the danger of a marital separation is that it shatters the trust, or, as one put it, “breaks the bedrock of the marriage.” Like a divorce, martial separations are seldom bilateral. The spouse who is involuntarily left may find that the break, though unsought, appeals to him or her.

Divorce Recovery Means Pain and Suffering

August 23rd, 2013

Even when divorce ends a bad marriage gone terribly wrong, a divorce does not make people happy. Pain and suffering are natural and inescapable consequences of any divorce. Even after the divorce, waves of pain and suffering shoot through consciousness. Something hurts, but the memory remains. Sadness and anger, fear and anxiety, sorrow and denial — all race like alternating current, back and forth.

In the face of this, divorce recovery is a do-it-yourself project. Divorce recovery means acceptance and the ability to go forward. The ability to keep a perspective, a sense of humor (even a dark one), but in the end people recover by putting one foot in front of the other and living.

After a divorce, getting through the day often seems no small accomplishment. There is no single right way to survive a divorce; there is no universal right way to start over. A person does it by doing it. Even with help such as counseling and support groups, the surviving divorce is a self-help project. The ancient Greeks believed that the reward of suffering is experience, and so it is with divorce.

Stages of Divorce Recovery

Many counselors agree that a divorce takes a person through stages very similar to those described by Elizabeth Kübler-Ross, in her landmark On Death and Dying, including denial and isolation, anger, bargaining, depression, and acceptance.

Dr. Kübler-Ross pioneered methods in the support and counseling of personal trauma, grief and grieving, associated with death and dying, and she also improved the understanding and practices in relation to bereavement and hospice care.

The five steps she identified as the progress associate with death and dying overlay neatly with the grief and recovery associated with divorce. In denial a person refuses to accept facts, information and reality (“I can’t believe this is happening”). Anger follows denial. Bargaining sometimes means making hypothetical deals (“Can we still be friends?”). Depression prepares a person for grieving. And finally acceptance.

While Dr. Kübler-Ross’s focused on death and bereavement, her grief cycle model offers a useful perspective for understanding, not only our own but also other people’s pain and suffering in the face of personal trauma and change, such as divorce.

“Time,” as Thomas Jefferson said in a letter written in connection with the death of his wife, “is the Great Physician.” The same is true for divorce.

First Comes Love, Then Marriage, Then the Long Struggle

August 12th, 2013

Romance is fleeting, says University of California- Riverside psychology professor Sonja Lyubomirsky, even among those who have found love. Professor Lyubomirsky believes couples enjoy a two-year “passion bump” after getting hitched, after which their love converts into a more compassionate, familial one. Chalk it up to “hedonic adaptation,” as she calls it; the human tendency to become “habituated or inured to most life changes.”

“Studies show that in long-term relationships, women are more likely than men to lose interest in sex, and to lose it sooner,” Lyubomirsky writes. “Why? Because women’s idea of passionate sex depends far more centrally on novelty than does men’s.” In a way, that finding conforms to some old clichés—that men are down for sex under any circumstances, and women need a little more attention to get heated. But it upends another assumption that women are interested in settling down with one partner, while men would prefer to sleep around.

New relationships “are endlessly surprising,” Lyubomirsky notes; monogamous love appears to bore men and women alike. But couples that decide to commit for the long haul can renew the spark (for brief periods, at least) by reconfiguring their relationships.

Couples experience a happiness bump when they commit to marriage, and another bump 18 to 20 years down the road, a phenomenon Lyubomirsky attributes to grown children “leaving the nest.”  The happiness of long-term couples who don’t get hitched or don’t have kids isn’t investigated here, but one study found that couples who make an effort to engage in new and “exciting” activities together—like a spontaneous ski trip—experience little bumps, too.

All of this speaks to a paradox about the American understanding of wedded bliss: The culture celebrates people who find life partners, support one another, share resources, and raise children in stable, predictable relationships. And yet we still expect life partners to experience a romantic, passionate love—and to keep sleeping with one another exclusively until they die. The big relationship milestones we see as signs of true love and commitment—meeting a partner, moving in, marrying, having kids—are actually institutionalized strategies for injecting change into our relationships. But they also further tether us to one partner who quickly becomes more like a sibling than a lover.

The ideal of a romantic marriage may be an innocuous social convention—at least trying to surprise a spouse throughout a lifetime is a not-totally-unattainable (and quite romantic!) notion. But the idea that passionate love ought to last a lifetime can be poisonous, too.

According to Lyubomirsky, “a series of studies at the University of Virginia and at Harvard showed that people experienced longer bursts of happiness when they were at the receiving end of an unexpected act of kindness and remained uncertain about where and why it had originated.” That’s the kind of surprise an abusive partner can provide—someone who could make you happy, or else miserable, every day of your life. Bursts might be overrated.

Postnuptial Agreements

July 24th, 2013

In the past few years, according to the American Academy of Matrimonial Lawyers (AAML), the number of couples seeking postnuptial agreements during their marriage has increased.

The AAML poll found that 51 percent of divorce attorneys reported more couples signing the agreements, which function as contracts describing the ownership of property.

Postnuptial agreements are similar to prenuptial agreements in that they determine who gets what after a divorce, among other provisions. A previous AAML survey found that attorneys had also seen a rise in postnups from 2002 to 2007.

AAML President Kenneth Altshuler says couples write postnuptial agreements when “there’s been a dramatic change in the financial circumstances of one party. If you win the lottery, or somebody all of a sudden inherits a large sum of money, or someone inherits a business from their family.”

In a perfect world, the couple might hope to share the new asset in perpetuity during a long and happy marriage. In reality, divorces happen and spouses can save an expensive and acrimonious court battle in the unfortunate event that they separate if they make it clear exactly who owns what.

The specter of divorce can actually spur the signing of a postnup — the other reason Altshuler cites. “Typically there’s got to be something not going overly well in the marriage. All of a sudden, they start thinking, ‘Wow, if this doesn’t work out, this is going to become a major problem. Let’s talk about now what will happen so we avoid fighting about it we get a divorce.’”

Too Easy to Divorce

June 4th, 2013

Almost six out of 10 people in Britain believe that there are not enough legal hurdles to deter couples from divorce, according to polling on attitudes to marriage and separation.

According to one source, of the 2,000 people polled, 57 per cent agreed or strongly agreed with the statement “it is too easy to divorce these days.” Women were slightly more inclined to agree with the statement than man – 59 percent versus 55 percent, and, significantly, most young people aged 18 to 24 also agreed. And while 58 percent of the sample that are currently married agreed with the statement, so too did 56 percent of those who are divorced themselves.

Two thirds of those polled thought that infidelity by one or other spouses is the main cause of relationship breakdown, ahead of money worries, children or housework.

Seven Things Not To Do in a Divorce

May 23rd, 2013

Here are seven things not to do in a divorce:

1. Thinking that a mediator will protect your financial interests.

2. Hiring the “best” lawyer that money can buy.

3. Keeping joint credit cards and loans.

4. Insisting on hanging on to the family home.

5. Trying to maintain the exact same lifestyle.6. Having a weak property settlement agreement.

7. Failing to change your will and insurance policies.

Staying in Business

May 8th, 2013

About 3.7 million businesses in the United States are owned by husband and wife teams, according to the Bureau of the Census, so many of these businesses are going to be involved in divorce settlements at one time or another.

Here are a few considerations that a couple must make when end a marriage but a save the business they worked hard to build. The spouses need:

> Mutual respect earned through open communication, predictability and compassion.

> Professional, therapeutic help because the divorcing spouses cannot take time off to mourn the death of their marriage.

> A written agreement (if one isn’t in place already) that outlines how the business will be run, how each party will be compensated, how decisions will be made and what happens in certain circumstances like incapacitation.

> A good talk with employees, letting them know what is happening and reassuring them that business will continue.

Woman Often Lose Health Insurance in Divorce

April 9th, 2013

Divorce has a tremendous impact on women’s health. Every year, an estimated 115,000 women lose private health insurance in the months following divorce, and about 65,000 of them remain uninsured for the long-term, according to a study that appeared in the Journal of Health and Social Behavior.

Even two years following the breakup of a marriage, many women still have no or inadequate health insurance. The Journal of Health augments “…the body of evidence that the current healthcare and insurance system in the United States is inadequate for a population in which multiple family and job changes over the life course are not uncommon.

“As a result, life events such as job transitions, marital transitions, and the onset of health problems allow individuals to slip through the cracks.”

The authors looked at marital status and health insurance coverage over time among 1,442 women to examine how their health insurance changed after divorce.

Previous research has demonstrated that people often experience poorer health following divorce and that women are more likely than men to suffer a decline in economic status after divorce. The new study is one of the first to show the impact of marital breakups on health insurance coverage.

“Just over half of workers get employer-based coverage, and a lot of people access health insurance coverage through other people’s employer-based coverage,” says Bridget Lavelle, a co-author of the paper and doctoral candidate in public policy and sociology at the University of Michigan-Ann Arbor. “One in four women are insured through a family member’s health insurance coverage. It’s important for people to be aware that this is something that could be lost if a marriage dissolves.”

Some of the women who lose health insurance coverage following divorce are employed. But they may not have employer-based coverage or, prior to the divorce, they may have chosen to access their spouse’s plan rather than their own. “Women who are employed and are offered employment-based coverage have a higher rate of declining that coverage and accepting coverage through their husband’s policy,” Lavelle says. “They are expecting their husband’s coverage to be more comprehensive or be a better value.”