What could have controlled their spiralling litigation costs and the financial terms of their multi-millionaire divorce settlements?  A Pre-Nuptial Agreement – a simple and cost-effective solution.  A pre-nuptial agreement is a legal document that sets out what each spouse had before the marriage and what he or she would get if the marriage ended as the result of death or divorce.  However, pre-nuptial agreements aren’t just for the wealthy.  More and more couples are entering into pre-nuptial agreements before marrying.  Why? Because more of today’s couples want to protect their financial future in the event of divorce.  And it is understandable given that 43% of marriages end in divorce.  And for many individuals what is even more important is that when they protect their financial future, they also protect the financial future of their children in the event of divorce.  To ensure the pre-nuptial agreement is binding and enforceable, it should be prepared by an experienced family law lawyer.

Here are six situations when a pre-nuptial agreement is strongly recommended:

Disparate Assets: If the spouses are bringing disparate assets to the marriage, then they should consider a pre-nuptial agreement.  The assets they own before the marriage could be a home, an investment account or a business.  The pre-nuptial agreement can set out whether the spouses’ assets will be kept separate during the marriage and how they will be taken into account in the event of a divorce. 

Disparate Incomes: Even in healthy marriages, control and power problems can arise where one spouse is earning considerably more than the other spouse.  The pre-nuptial agreement can set a limit on the amount the higher-wage earning spouses pays the lower-wage earning spouse if they divorce.  However, judges will set aside pre-nuptial agreements if it is patently unfair to the lower-wage earning spouse, particularly in long-term marriages. 

Disparate Debts:  If one spouse has significant financial obligations, the pre-nuptial agreement can keep the spouses debts separate.  However, for some types of debts, it is not possible to keep the debts separate and the other spouse becomes liable for the debts regardless of the pre-nuptial agreement.  In some circumstances, a spouse can remain liable for their partner’s debt during the marriage and this liability can continue after the divorce.  One example, are credit cards that are jointly owned during the marriage and have a huge outstanding credit card balance at the time of the divorce.  To make matters worse, divorce orders do not cancel credit cards and the credit card debt can continue to grow unless the credit cards are cancelled. 

Second Marriages:  All couples entering into a second marriage should have a pre-nuptial agreement.  One reason is that the divorce rate jumps from 43% for first marriages to  70% for second marriages.  Another reason is that if there are step-children, the pre-nuptial agreement can set out which spouse is solely responsible for child-related expenses.  It can also set out how the assets will be divided either after divorce or a spouse’s death. 

Business Owners:  Small business owners in particular are frequently subjected to big risks when going through divorce.  A pre-nuptial agreement can protect the businesse’s assets and profits in the event of a divorce.  It can also protect the non-owner from any liabilities relating to the business. 

Inheritances:  If a spouse is going to inherit money or other significant assets before the divorce is final, the pre-nuptial agreement can provide that the inheritance remains the separate property of the inheriting spouse.  It is important for the inheriting spouse to make sure the inheritance is not commingled, directly or indirectly. with the couple’s family property.      

During the past 14 months, the divorce rumours about Perry and Brand have been building to a crescendo.  Perry was on the cover of October 2011 InStyle and in her interview, she was asked about the divorce rumours.  Katy’s reply was a bit vague for a celebrity who is known for the hit song “I Kissed A Girl And I Liked It.” Brand whose earning power is far less than Perry’s, was interviewed by Ellen DeGeneres on December 2, 2011.  Ellen persistently questions Russell about the rumours that his marriage to Perry is over and they are going to divorce.  Brand used hyperbole theatrics to deny  the divorce rumours and stated “I’m married to Katy perpetually. Until death do us part was the pledge. I am still alive”.  Then 28 days later, Brand files for divorce citing irreconcilable differences in Los Angeles Superior Court.   

What could have caused the Perry-Brand marriage to fail?  Differences in earning power may have contributed to the demise of this marriage.  Celebrity Network reports that in 2011 Katy Perry earned nearly $45 million from album sales, merchandise, touring and endorsements!  According to Forbes, Perry’s net worth is 44 million – much higher than Brand’s estimated net worth at between 6.6 million and 15 million.  In 2011 Brand starred in the box-office flop “Arthur”.  He was also deported from Japan because of his criminal history, according to a tweet from wife Katy Perry and ran into trouble when trying to enter Canada. 

According to the media reports and the divorce documents Perry and Brand didn’t have a pre-nuptial agreement.  Just before they married in India, Brand told the media “I ain’t doing no pre-nup.” Smart move Brand, not so smart move Perry.  In the divorce documents that Brand filed, he ticked the box for ‘Property rights to be determined,’ which also suggests the pair did not have a pre-nuptial agreement.  Both lawyers for Katy Perry and Russell Brand will have to work out an amicable divorce settlement, as the couple appear not to have a pre-nuptial agreement.  They are reported to have at least three properties together in California, New York and London.  Brand may entitled to half or more than half of the assets Katy Perry acquired during the marriage, under California’s community property state law.  Russel Brand is set to make up to 20 million from his divorce from Katy Perry. 

What would have a pre-nuptial agreement have accomplished for Perry and Brand?  It would have saved them time and money on legal fees and litigation costs because they would likely not have to battle over ownership of their assets.  One of the most important provisions in a pre-nuptial agreement is the one dealing with the appreciation of individual assets each possessed prior to entering into the marriage.  Katy Perry should have had a pre-nuptial agreement that clearly set out that her pre-marital property does retain its character during the marriage.  This means that the appreciation of the pre-marital assets, such as Katy’s businesses, during the marriage would have remained Katy’s sole property.     

What can we expect in the next 14 months from this pop star and comedienne?  Katy Perry will likely produce a medley of songs based on the theme of “20 million got away because I had no pre-nup.  I kissed a boy again and I liked it, but not enough to marry without a pre-nup”.  The last laugh will go to Russell when he receives his $20 million divorce settlement from Katy.

A talented mediator knows that lack of time and time pressure can pose serious barriers to conflict resolution.  A party who has a preoccupation with time will hinder themselves from thinking freely and creatively and will hinder the other party from doing the same.  Choose a mediator who can create a mediation environment that is a safe haven for both you and your former spouse.  A mediator who will teach you both to take the time to really listen and talk to each other.  When interviewing the mediators, ask them how they create a mediation environment that encourages both parties to talk in calmness about critically important issues.  Wise mediators know to slow down the pace in the beginning phases of the mediation.  Then they speed up the pace of the mediation considerably when it is clear that the parties understand the causes of their conflict and understand each other’s interests and needs as co-parents and as former spouses.  Time is on your side when you mediate your divorce if you and your former spouse choose the right mediator. 

Why this Course Is Essential

The leading complaint about lawyers received by the Law Society of British Columbia relates to poor client communication. Aside from failure to contact clients at all there are other problems with lawyer-client communication that raise professional and ethical issues for lawyers. It should be reasonably obvious to practitioners that clear and effective communication is critical to the success of the lawyer-client relationship.  However, more clients than ever are  dealing with aging, disabilities and ESL issues, which increase barriers to clear communication and to a lawyer’s ability to provide accurate advice and representation. The aging baby-boomer population and the increased flow of immigrants in recent years has created a large population of people with special communication needs. Unless preventative measures are taken, this could lead to an increase in human rights complaints against lawyers on the grounds of discrimination. It could also lead to more complaints about lawyers on grounds that the lawyer has not maintained a professional standard of communication. The course is designed to help lawyers and legal support staff recognize and address potential concerns before they become actual liabilities and result in costly legal actions, negative publicity and embarrassment.

Add to your Client Communication Toolbox

The course describes common problem areas and provides tips on improving communication with clients who have special communication needs. Learn how to better identify communication barriers and how to remove those barriers by ensuring the client has the proper communication accommodations. Lawyers who improve their client communication toolbox will be better able to represent more clients with diverse communication needs.

Online Course by Two Lawyers with Expertise

In addition to my work at GILSIG Divorce & Family Law Mediation, I have worked with many clients with special communication needs and coached professionals on communicating with clients with aging or disability issues. As a result, I’ve built up expertise on client communication and best practices for the legal profession that I’m excited to share.

I am co-presenting this course with Dianne Wintermute, a Staff Lawyer with ARCH Disability Law Centre, Toronto. Ms. Wintermute has extensive litigation experience representing individuals and disability organizations at various tribunals and all levels of court, including the Supreme Court of Canada.

Continuing Professional Development Credit Available in British Columbia and Ontario

The course is worth 1 hour toward the professional responsibility and ethics, client care and relations, and/or practice management component of CPD requirements for BC Lawyers and has also been accredited by the Law Society of Upper Canada for 1 New Member CPD Hour. Please also note that The Law Society of Upper Canada (Ontario) has accredited this course. 

How to Register

For more info, please visit the CLE BC website. To register, add session one (October 25, 2011) or add session two (March 30, 2012) to your CLE BC shopping cart.

“In the family area, they get mired in processes that actually exacerbate the dispute and have bad consequences for the children involved and for preserving as much of the family assets as can be preserved.”

Beverley McLachlin would know. She is Chief Justice of Canada’s final court of appeal: the Supreme Court of Canada. When one of the best judges in Canadian history tells you that almost all family matters do not belong in the court processes, reasonable divorcing couples must listen and choose the family mediation process.

The benefits of mediation over using the court process include…

• You learn how to effectively negotiate with one another.
• You avoid the high cost of divorce court and legal fees.
• You, rather than a third party, control the outcome.
• More care can be given to creative approaches.
• More care can be given to use the tax law to both you and your ex-spouse’s benefit.
• You have an accessible, inexpensive process to return to for disputes that arise as the children get older.

Here are the first 5 steps to help you reach a successful divorce settlement…

Step #1 Choose to Mediate and Choose to Stay Out of Court Process. Parties divorce because there is a lack of trust, communication and cooperation in the marriage. When a legal action starts and the parties head to court, this lack of trust, communication and cooperation gets worse. In contrast to the court process, the mediation process is designed to improve the trust, communication and cooperation between the parties because a certain degree is necessary to reach a settlement.

Step #2 Choose a Family Mediator. Family mediators teach the parties to employ cooperation and compromise in arriving at a settlement agreement, which leaves far less emotional scarring than the adversarial lawyer-to-lawyer method. The cost of the mediator will probably be less than the parties will pay if they paid for their opposing lawyers to argue with each other. Choose a family mediator who has experience in divorce law, seeing what happens at divorce and can help the parties imagine fair and workable solutions. A mediator who teaches the parties the art of good negotiation that leads to mutually agreeable solutions. If the family mediator is a practicing lawyer, then the mediator can also draft the separation or divorce agreement.

Step #3 Sign an Agreement to Mediate. The mediator and the parties sign an agreement to mediate, which is a written agreement outlining the terms on which the mediation will proceed. It is usually signed after the parties have agreed to mediate but before the first mediation session commences. Mediators have their own preferred form of the agreement. The Agreement will include a brief description of the process, the neutral and impartial role of the mediator, the divorce issues in dispute, and the objective of reaching a mutually agreeable resolution. It should deal with the following matters: confidentiality, full disclosure, fees and costs, the role of legal counsel and ending the mediation.

Step #4 Don’t Lawyer Up. Find “Mediation Friendly” Lawyers. Lawyering up occurs when each party hires a divorce lawyer who uses the court process to transform the parties from divorcing parties into world’s worst enemies. It happens all the time. Lawyering up weakens the co-parenting relationship at the outset which harms the kids and the legal bills eat up the family’s assets. Instead each party should hire a “mediation friendly” family lawyer who will provide input during the process and can be a helpful part of the mediation process. The family lawyer will advise the party about the best case and worst case scenario and the party’s individual rights. This type of family lawyer will ensure that the party’s rights are protected without derailing the mediation process and without having to go to court.

Step #5 Go to a licensed therapist. An experienced mental health professional will be more effective, will cost less per hour than your lawyer, and will help the party deal with the emotional peaks and pits that continually throw the party off balance. In addition, each party will have developed a relationship with a therapist who can guide them through the rocky recovery period after the divorce is granted.

In my next blog post—Successfully Mediating Your Divorce: Steps 6-10—you’ll read about some the steps to a mediated divorce settlement, and how mediation has great advantages for divorcing couples.

• Offering a neutral place for you and your former spouse to meet;
• Discussing and guiding the mediation process;
• Setting the tone for the meetings to provide for constructive dialogue;
• Helping to define the issues you both need to resolve;
• Facilitating understanding and communication between you and your former spouse about the issues;
• Keeping your discussions on track;
• Helping you gather and keep track of information and documents;
• Teaching you and your former spouse skills for better communication and cooperative problem solving;
• Helping you maintain a working relationship with your former spouse which is particularly important if you have children because you will need to keep in contact while they are growing up;
• Helping you both focus on the best interests of your children;
• Helping you reach agreement; and
• Summarizing your agreement, orally and in writing.

Because I am a lawyer who is also an accredited family law mediator, I can also provide the following services:

• Advise you and your former spouse of the legal issues involved;
• Inform you and your former spouse of the court’s probable disposition of the various issues arising from the breakdown of the marital relationship; and
• Prepare any agreement between you and your former spouse in addition to the memorandum of understanding that records the results of the mediation.

What is the next step?

You and your former spouse may decide to engage in family mediation to resolve all or some of the issues arising from the breakdown of your relationship. If you are interested in finding out more about how family law mediation can help you contact Marla Gilsig, to book a pre-mediation interview.

My name is Marla B. Gilsig and I am a family and divorce lawyer. My family law advice can help you understand your legal rights and obligations and guide you through the maze of family law and divorce law. I draft cohabitation, prenuptial, and postnuptial agreements. Where there has been a breakdown of the spousal relationship, I draft separation agreements and provide out of court dispute resolutions services to help you resolve your separation and divorce issues in a non-adversarial way. . A negotiated settlement is the best solution for most families.

If you separate, my goal is to help you and your former spouse resolve differences and promote peaceful restructuring of your famly unit and property in a timely and cost-effective manner. I encouraging you to understand your legal rights while promoting a resolution based on the practical and emotional needs of your family. My separation agreements allow for creative and detailed outcomes that are specifically designed by you and your former spouse to meet the unique needs of your family. The voluntary nature of the negotiated settlement process increases the likelihood that the terms of the agreement will be carried out by you and your former spouse.

I am a collaborative divorce lawyer. Collaborative divorce is a no court approach to divorce. Collaborative divorce is a process brining together family lawyers, mental health professionals, and financial advisors to help couples reach divorce settlements without going to court. This approach removes the adversarial element and replaces it with an approach that consists of mutual respect and team problem solving.

I am an accredited family law mediator. Family law mediation is a process where a divorcing couple—with or without their own lawyers—meet with an independent lawyer—called a family law mediator—who helps the couple resolve the issues and reach an agreement. The mediator does not decide the outcome. Both spouses, with their lawyers’ help, determine the terms of the agreement.

I am a family lawyer, collaborative divorce lawyer and an accredited family law mediator who enjoys practicing family law and knows what it takes to help spouses separate on good terms. Learn more about me by exploring my website or you are welcome to call me at 604.222.2902 to set up an appointment to discuss your family law needs.

Your lawyer and your former spouse’s lawyer may also attend the mediation meetings with the two of you. Your lawyers are part of the family mediation process, even if they do not attend the meetings. When you separate, your children are impacted. Sometimes older children also participate in the mediation and give their suggestions for parenting so that you have their input when making your decisions.

To ensure your family’s emotional and financial needs are being addressed, I encourage you to work with other professionals during the family mediation process, such as psychologists, counsellors, financial advisors, divorce financial planners, accountants and tax experts.

I begin the mediation process by meeting with each of you separately in a preliminary conference. These meetings last one to two hours and are used to assess whether the case is appropriate for family mediation and to determine the key issues you wish to resolve. Then I meet with both of you to review and sign the Agreement to Mediate. During our first joint family mediation meeting the three of us will create an agenda of the issues that need to be resolved.

For most divorcing couples, there are so many important decisions to make and skills that need to be developed that it can take from three to eight meetings to reach a settlement. The joint meetings last about three hours. At the end of each meeting, I summarize the decisions you and your former spouse have made and create a written summary for each of you.

When you and your former spouse decide that the issues in dispute have been resolved, I prepare a memorandum of understanding. Then a formal written agreement must be drafted setting out the terms of your settlement. I can prepare all the necessary written agreements because I am both a divorce lawyer and an accredited family law mediator. Alternatively, you may take the memorandums of understanding to your own lawyer and your lawyer can prepare the formal documentation. Before any written agreement is signed it is essential that each spouse seek independent legal advice. This means having your own lawyers review the terms of the agreement and explain what the agreement means in terms of your respective rights and obligations. Your lawyers may also give you additional legal advice relevant to your decisions to enter into and sign the agreement.

In mediation, you and your former spouse work with a family mediator, one who is specially trained to help you reach an agreement. Family mediators are neutral third parties who can help you reach an agreement on a variety of issues, including guardianship, parenting schedules, support payments, and the division of property and debts. A family mediator may be a psychologist, counsellor, social worker or lawyer who has been trained to be a family mediator. In BC, most family mediators are members of Mediate BC and Family Mediation Canada.

What is a family law mediator?

In British Columbia, the Law Society of BC offers accreditation for family lawyers who wish to become family law mediators. BC lawyers who are practising members of the Law Society may qualify to practise “family law mediation” and use the title “family law mediator” by fulfilling the requirements set by the Practice Standards Committee. Family law mediators can provide services in addition to those performed by unaccredited family mediators. The Law Society provides that among other things, a family law mediator may:

1. Inform you of the legal issues involved;
2. Advise you of a court’s probable disposition of the issues; and
3. Prepare any agreement between you and your former spouse in addition to the memorandum recording the results of the mediation.

Marla Gilsig is an accredited family law mediator. She is able to perform all of the services of both a family mediator and a family law mediator. Visit her Bio page. Contact her to discuss if family law mediation will be a good fit for you and your former spouse.