I had lunch this week with one of the Certified Divorce Financial Analysts that we work with in our divorce cases that involve maintenance.  Her name is Deb Johnson and the work she has done in some of our cases has made a critical difference in being able to reach a good settlement for our client.  You can reach Deb at the Divorce Resource Centre of Colorado, LLC at 303-468-5626

I have spoken in other blog entries about Maintenance awards in Colorado, the process and the standard the Court uses to determine if there is a need for maintenance as well as the need for expert testimony and advice on what is a fair settlement in a long term marriage where the incomes of the two parties are vastly different.  (see the category Divorce, Maintenance (Alimony)).  In this blog entry I want to focus on the possible roles that a Certified Divorce Financial Analyst can play in a divorce.

Option 1:  Advocate for your position
A Certified Financial Analyst can take all of the financial information in your divorce proceeding and come up with options and scenarios to equalize the two parties financially.  This could include an unequal distribution of the marital assets and debts as well as the use of maintenance to assure that the lesser earning spouse receives the full benefit of their partnership for the entire length of the marriage.  This is often very powerful evidence that can be used to settle the case or as testimony at trial to influence the Judge's decision on asset distribution and maintenance.  As I have said before, using a good Certified Divorce Financial Analyst is a smart investment in your long term future if you are the lesser earning spouse.

Option 2:  Bringing Clarity to Chaos
The second way you can use a Certified Divorce Financial Analyst is to go alone or with your spouse to just get a clear picture of the financial situation and what the effect of a divorce will have on each of you.  Deb Johnson reviewed a couple items with me that I thought would be so useful for a divorcing couple.  First she can take all the financial information and come up with a future budget and cash flow analysis for both parties.  So you can see what it would really look like financially after the divorce.  She can answer questions about the house and if you can afford to keep it or what the tax return issues will look like following the divorce.  This process can assist with the concerns of both spouses.  The spouse that is worried that maintenance will break them can see that in fact it may be possible to make it all work with the ensuing tax breaks and the spouse that has little to no earning capacity can see that they will be able to make it financially.  This clarity is invaluable because people get stuck in their emotional reaction about money rather than figure out the reality of the situation.  A CDFA can make the difference in bringing everyone onto the same reality based financial picture.

Option 3:  Financial Mediation
One of the things that Deb Johnson let me know at our lunch is that she is now doing financial mediation in divorce cases.  You can find a good mediator in Denver.  In fact, we do family law mediation at our firm, Matthews & Matthews PC.  However, few mediators have the financial background to do the kind of scenario planning that a good CDFA can do.  Deb now offers mediation to resolve the financial issues between divorcing spouses or between non married couples or long term gay or lesbian partners.  You could also do a full mediation with both financial and parenting issues addressed and have Deb take on the role of financial mediator in partership with another mediator.  I can imagine that this partnership could be very powerful for a complex financial divorce mediation.  The tools that Deb or others with the skills of a CDFA can bring to the tale in a mediation for outweigh what is possible with an attorney or therapist mediator when it comes to well thought our financial scenarios.  I believe that using Deb or another CDFA is worth the extra cost of having a true financial expert in the mediation mix.

I am certainly glad that I had lunch with Deb this week and learned about all the ways we can use her talents to support our clients in their divorce or those that ask for legal advice but want to do their case without attorneys.  These folks could also benefit greatly by spending some time and investing some money in getting a clear picture of the financial realities of their divorce situation.  Too many people go through a divorce on their own and then call us later upset that they did not understand the financial ramifications of their divorce decisions.  Often they want to re-open their case to correct a mistake they made and most of the time I have to tell them that it is too late.  Once the divorce is final, in most cases, you cannot do anything about financial mistakes you made.  Even if you do not want to use attorneys, you can at least get the financial reality of your decisions by going to a CDFA.  I highly recommend it.

I had lunch this week with one of the Certified Divorce Financial Analysts that we work with in our divorce cases that involve maintenance.  Her name is Deb Johnson and the work she has done in some of our cases has made a critical difference in being able to reach a good settlement for our client.  You can reach Deb at the Divorce Resource Centre of Colorado, LLC at 303-468-5626

I have spoken in other blog entries about Maintenance awards in Colorado, the process and the standard the Court uses to determine if there is a need for maintenance as well as the need for expert testimony and advice on what is a fair settlement in a long term marriage where the incomes of the two parties are vastly different.  (see the category Divorce, Maintenance (Alimony)).  In this blog entry I want to focus on the possible roles that a Certified Divorce Financial Analyst can play in a divorce.

Option 1:  Advocate for your position
A Certified Financial Analyst can take all of the financial information in your divorce proceeding and come up with options and scenarios to equalize the two parties financially.  This could include an unequal distribution of the marital assets and debts as well as the use of maintenance to assure that the lesser earning spouse receives the full benefit of their partnership for the entire length of the marriage.  This is often very powerful evidence that can be used to settle the case or as testimony at trial to influence the Judge's decision on asset distribution and maintenance.  As I have said before, using a good Certified Divorce Financial Analyst is a smart investment in your long term future if you are the lesser earning spouse.

Option 2:  Bringing Clarity to Chaos
The second way you can use a Certified Divorce Financial Analyst is to go alone or with your spouse to just get a clear picture of the financial situation and what the effect of a divorce will have on each of you.  Deb Johnson reviewed a couple items with me that I thought would be so useful for a divorcing couple.  First she can take all the financial information and come up with a future budget and cash flow analysis for both parties.  So you can see what it would really look like financially after the divorce.  She can answer questions about the house and if you can afford to keep it or what the tax return issues will look like following the divorce.  This process can assist with the concerns of both spouses.  The spouse that is worried that maintenance will break them can see that in fact it may be possible to make it all work with the ensuing tax breaks and the spouse that has little to no earning capacity can see that they will be able to make it financially.  This clarity is invaluable because people get stuck in their emotional reaction about money rather than figure out the reality of the situation.  A CDFA can make the difference in bringing everyone onto the same reality based financial picture.

Option 3:  Financial Mediation
One of the things that Deb Johnson let me know at our lunch is that she is now doing financial mediation in divorce cases.  You can find a good mediator in Denver.  In fact, we do family law mediation at our firm, Matthews & Matthews PC.  However, few mediators have the financial background to do the kind of scenario planning that a good CDFA can do.  Deb now offers mediation to resolve the financial issues between divorcing spouses or between non married couples or long term gay or lesbian partners.  You could also do a full mediation with both financial and parenting issues addressed and have Deb take on the role of financial mediator in partership with another mediator.  I can imagine that this partnership could be very powerful for a complex financial divorce mediation.  The tools that Deb or others with the skills of a CDFA can bring to the tale in a mediation for outweigh what is possible with an attorney or therapist mediator when it comes to well thought our financial scenarios.  I believe that using Deb or another CDFA is worth the extra cost of having a true financial expert in the mediation mix.

I am certainly glad that I had lunch with Deb this week and learned about all the ways we can use her talents to support our clients in their divorce or those that ask for legal advice but want to do their case without attorneys.  These folks could also benefit greatly by spending some time and investing some money in getting a clear picture of the financial realities of their divorce situation.  Too many people go through a divorce on their own and then call us later upset that they did not understand the financial ramifications of their divorce decisions.  Often they want to re-open their case to correct a mistake they made and most of the time I have to tell them that it is too late.  Once the divorce is final, in most cases, you cannot do anything about financial mistakes you made.  Even if you do not want to use attorneys, you can at least get the financial reality of your decisions by going to a CDFA.  I highly recommend it.

Trying to fit a square peg into a round hole
In Colorado, non-married partners, same sex or male and female have not had any statutory protection when they go to dissolve a long term relationship that has operated on much the same terms as a marriage. One partner may have not worked for years during the relationship or the incomes of the two parties may be greatly divergent. They may have shared bank accounts, owned property together, have debt together. Yet at the time of dissolution, if there is a disagreement, the only legal remedies available are a stretch of law that was created for a different purpose such as implied contract law or the equitable remedy of unjust enrichment. Attorneys in domestic partnership cases have also tried to fashion alternative remedies out of the law of constructive and resulting trusts or corporate laws involving joint ventures. However, nothing is specific to an unmarried domestic couple and there is no statutory law to look to as there is for married partners who divorce.

So, people in non-marital domestic partnerships do not have a clear avenue to clear up their disputes. In most cases, what is available does not end up with a result based in equity.

Best Case at the present time
At the moment, the best a non-married couple can do is draft up a Co-Habitation agreement/ Domestic Partnership Agreement that speaks specifically to how assets and debts will be divided if the relationship ends. Contract law in Colorado is available to support this type of agreement.

New Case Law is slowly expanding rights
Slowly there are new Supreme Court cases that seem to support better arguments for dealing equitably with the break up of a domestic partnership. In late 2008 the Colorado Supreme Court ruled in the case of Lewis v. Lewis. The Lewis case discussed the equitable remedy of unjust enrichment as it applies to close family members or confidants. Confidants can be applied to non-married partners. The Lewis case rules that if there was a "mutual purpose" between confidants and one party has profited from a significant deviation from that mutual purpose, then that party is unjustly enriched.

If non-married partners have the mutual purpose to financially or otherwise support the domestic unit, take care of each other for life, and join their resources for the benefit of both, then upon dissolution of their relationship, a court could look to see if one party is unjustly enriched from the deviation of that mutual purpose.

This is the best legal argument yet for an equitable distribution of assets for a non-married domestic partnership in Colorado.

We have not seen a domestic partnership test case yet on this new and expanded legal theory of unjust enrichment. The Lewis case did not involve a domestic partnership. It involved a dispute amongst family members. However, you can certainly make the argument that a domestic partnership is a relationship between confidants.

Hope for the Future
Hopefully, somewhere in the near future, the legislature or the courts will address this inequity that people dissolving domestic partnerships endure. Until then we will continue to look for ways to utilize the laws that now exist to enable domestic partnerships to equitably dissolve following a break up.

Trying to fit a square peg into a round hole
In Colorado, non-married partners, same sex or male and female have not had any statutory protection when they go to dissolve a long term relationship that has operated on much the same terms as a marriage. One partner may have not worked for years during the relationship or the incomes of the two parties may be greatly divergent. They may have shared bank accounts, owned property together, have debt together. Yet at the time of dissolution, if there is a disagreement, the only legal remedies available are a stretch of law that was created for a different purpose such as implied contract law or the equitable remedy of unjust enrichment. Attorneys in domestic partnership cases have also tried to fashion alternative remedies out of the law of constructive and resulting trusts or corporate laws involving joint ventures. However, nothing is specific to an unmarried domestic couple and there is no statutory law to look to as there is for married partners who divorce.

So, people in non-marital domestic partnerships do not have a clear avenue to clear up their disputes. In most cases, what is available does not end up with a result based in equity.

Best Case at the present time
At the moment, the best a non-married couple can do is draft up a Co-Habitation agreement/ Domestic Partnership Agreement that speaks specifically to how assets and debts will be divided if the relationship ends. Contract law in Colorado is available to support this type of agreement.

New Case Law is slowly expanding rights
Slowly there are new Supreme Court cases that seem to support better arguments for dealing equitably with the break up of a domestic partnership. In late 2008 the Colorado Supreme Court ruled in the case of Lewis v. Lewis. The Lewis case discussed the equitable remedy of unjust enrichment as it applies to close family members or confidants. Confidants can be applied to non-married partners. The Lewis case rules that if there was a "mutual purpose" between confidants and one party has profited from a significant deviation from that mutual purpose, then that party is unjustly enriched.

If non-married partners have the mutual purpose to financially or otherwise support the domestic unit, take care of each other for life, and join their resources for the benefit of both, then upon dissolution of their relationship, a court could look to see if one party is unjustly enriched from the deviation of that mutual purpose.

This is the best legal argument yet for an equitable distribution of assets for a non-married domestic partnership in Colorado.

We have not seen a domestic partnership test case yet on this new and expanded legal theory of unjust enrichment. The Lewis case did not involve a domestic partnership. It involved a dispute amongst family members. However, you can certainly make the argument that a domestic partnership is a relationship between confidants.

Hope for the Future
Hopefully, somewhere in the near future, the legislature or the courts will address this inequity that people dissolving domestic partnerships endure. Until then we will continue to look for ways to utilize the laws that now exist to enable domestic partnerships to equitably dissolve following a break up.

On July 1, 2009 a law went into effect that allows same sex couples (as well as any other two non-married individuals) to enter into an agreement called a Designated Beneficiary Agreement and file it with their County Clerk and Recorder in the county where they reside.

The law gives same sex couples expanded rights if they file a Designated Beneficiary Agreement. Here are some of the rights that are conferred under the statute:

1. Right to hospital visitation that is usually reserved for family only.
2. The right to initiate a formal complaint regarding alleged violations in a nursing home situation.
3. The right to notice of the withholding or withdrawal of life-sustaining procedures.
4. The right to challenge the validity of a declaration as to medical or surgical treatment.
5. The right to act as an agent to make, revoke or object to anatomical gifts.
6. The right to inherit real or personal property through intestate succession (in the absence of a will)
7. The right to receive benefits pursuant to the Workers Compensation Act of Colorado.
8. The right to have standing to sue for wrongful death in the event of the other parties death.
9. The right to direct the disposition of the other parties last remains.
10. The right to be recognized as a dependent in a health insurance policy if the employer elects to provide health insurance coverage for designated beneficiaries.
11. The right to be designated as a beneficiary in a retirement or pension plan, or a life insurance policy or an inter vivos or testamentary trust for the purpose of a non probate transfer on death.
    

The statute gives the beneficiary a number of rights that used to be reserved for spouses or family members in the past. It is important to note however, that the rights conferred by a Designated Beneficiary Agreement (DBA) can be overturned by a number of other legal documents if the DBA is in conflict with their terms. These legal instruments include, wills, trusts, power of attorney, a medical power of attorney, beneficiary designations in insurance policies, health insurance, retirement or pension plans, POD accounts, a declaration as to medical treatment, a declaration as to disposition of last remains, or a marriage licence. It does not matter when the other legal instrument is executed...it will trump the DBA.

If one person marries the agreement is revoked and if one person dies the agreement is revoked except for the post death pieces of the agreement which will still be enforceable. You can also file a revocation of the DBA at any time with the Clerk and Recorders office in the county where the original DBA was filed.

So, if you are thinking of entering a Designated Beneficiary Agreement it is important to understand 1. How to make sure it is done in way that matches the requirements of the statute, 2. That you execute other legal documents to assure that the rights conferred by the DBA come into legal reality and 3. That you understand the limitations of the statute and the means to reverse the DBA if you change your mind.

I recommend that you meet with a family law attorney or an estate planning attorney to assure that you understand your rights and that you are conforming to the requirements of the statute.

You can get a more in-depth review of the statute, a sample agreement and answers to frequently asked questions by going to www.designatedbenificiaries.com or feel free to call our offices at 303-329-3802.