From time to time, I have clients who are about to get married and contact me in order to negotiate a prenuptial agreement for them. I also have had clients who are about to live together or are already living together and would like a cohabitation agreement in place. Having negotiated many of these agreements over the years, I wanted to comment on the best way, in my opinion, to negotiate an agreement. I will refer to these agreements as "prenuptial agreements" below, but please understand that I am also referring to cohabitation agreements.
Just so we are clear -- a prenuptial agreement is an agreement that two parties sign before they get married regarding issues such as property division or support, in case they separate in the future. In order for a prenuptial agreement to be valid and enforceable, both parties need to get independent legal advice from their own lawyers. Many clients are surprised that they need two lawyers in order to enter into a binding prenuptial agreement. In fact, because each party's interests are adverse in law, when it comes to negotiating an agreement, lawyers are necessary in order to ensure that each party knows how the agreement will affect their legal rights in case they separate.
The traditional way of negotiating a prenuptial agreement is for each client to retain a lawyer and for the lawyers to negotiate on behalf of the clients. The hope is that the lawyers are going to speak nicely to each other about something that is unpleasant -- what each party will get in case they separate in the future -- and come up with the terms of the prenuptial agreement. The last thing the lawyers want to do is to create a ridge between two people who are very much in love and want to get married -- but it does happen! Part of the problem is "broken telephone" when speaking through lawyers. Another part of the problem is the divide that is created between the couple because they are not being encouraged to talk to each other about the legal issues, and only to their lawyers.
I have found the most successful way to help clients to negotiate a prenuptial agreement is to encourage them to do the negotiating in the same room with a mediator. The couple will meet with the mediator and discuss the reasons why they want a prenuptial agreement, the couple will be encouraged to talk to each other about the issues, the mediator will provide general legal information about family law, and hopefully, the mediator will end up drafting a comprehensive prenuptial agreement. The parties to the agreement will still need to get independent legal advice from their own lawyers, but most of the work will have been done by the clients and mediator alone before the lawyers are involved. This is also a process that is less expensive than having lawyers involved right from the beginning because the parties are only paying for one professional (the mediator) to work with them, instead of the two lawyers. Most importantly, it's a friendlier, more personable process.
Monday, March 7, 2011
Thursday, February 24, 2011
Collaborative family lawyers must meet the same standard of practice as family law litigators
I felt it was important to comment on the recent decision of Webb v. Birkett, [2011] A.J. No. 54.
In this decision by the Alberta Court of Appeal, the court ruled that collaborative family law practitioners must meet the same standard of care as family law litigators. Have a look at the article by Cristin Schmitz in Lawyers Weekly here: http://www.lawyersweekly-digital.com/lawyersweekly/3038?pg=14#pg14
You can also read the full decision here: http://www.canlii.org/en/ab/abca/doc/2011/2011abca13/2011abca13.html
This was a case where a client sued her collaborative family lawyer for failing to provide her with proper and complete legal advice during the collaborative family law process which the client and her ex-husband were participating in. In particular, when the client instructed the lawyer that she wanted to waive receiving financial disclosure from her ex-husband regarding the value of his dry cleaning company, her lawyer did not explain the risks and losses attendant upon her waiving receipt of full information from the other side. Accordingly, the client later claimed that she made an uninformed decision regarding some of her rights when she entered into a binding separation agreement with her ex-husband.
The court ruled that the lawyer had indeed fallen below the standard of care owed to her client. The lawyer should have tried to obtain all relevant disclosure from the other side and provided a "legal model" analysis of the client's entitlements by law (in property division, spousal support and/or child support). Where a client insists that he/she does not want to obtain full disclosure from the other side and feels satisfied with "not knowing" certain information, a lawyer needs to tell the client that they cannot give proper legal advice based on the lack of information and to also advise the client that they may be accepting less or paying more in a settlement than what would be required by law. It is preferable that the lawyer communicate this in writing to the client.
I must say that this decision, albeit necessary, is nothing "earth shattering" to me or my fellow collaborative family law practitioners. We are fully aware that our primary role is to protect our clients the same way that a traditional family lawyer (ie. litigator) must. We must keep abreast of the changing law and we need to advise our clients about how the law affects them. People, including the lawyer who was sued, may have the misperception that in a collaborative family law process, the lawyers do not need to "cross their t's and dot their i's" in the process simply because the clients who have entered into the agreement seem happy with the deal they are reaching. The only difference between a settlement reached through collaborative family law process versus traditional negotiation or litigation is the tone of the process itself -- the collaborative process is premised on the parties and lawyers working collaboratively, whereas the traditional negotiation/litigation process is not. However, both processes require that clients receive thorough and well reasoned legal advice before they enter into binding agreements. The standards of that legal advice are definitely no different between the processes. (In fact, many of today's collaborative practitioners were once traditional family lawyers practicing in the court system.)
In this decision by the Alberta Court of Appeal, the court ruled that collaborative family law practitioners must meet the same standard of care as family law litigators. Have a look at the article by Cristin Schmitz in Lawyers Weekly here: http://www.lawyersweekly-digital.com/lawyersweekly/3038?pg=14#pg14
You can also read the full decision here: http://www.canlii.org/en/ab/abca/doc/2011/2011abca13/2011abca13.html
This was a case where a client sued her collaborative family lawyer for failing to provide her with proper and complete legal advice during the collaborative family law process which the client and her ex-husband were participating in. In particular, when the client instructed the lawyer that she wanted to waive receiving financial disclosure from her ex-husband regarding the value of his dry cleaning company, her lawyer did not explain the risks and losses attendant upon her waiving receipt of full information from the other side. Accordingly, the client later claimed that she made an uninformed decision regarding some of her rights when she entered into a binding separation agreement with her ex-husband.
The court ruled that the lawyer had indeed fallen below the standard of care owed to her client. The lawyer should have tried to obtain all relevant disclosure from the other side and provided a "legal model" analysis of the client's entitlements by law (in property division, spousal support and/or child support). Where a client insists that he/she does not want to obtain full disclosure from the other side and feels satisfied with "not knowing" certain information, a lawyer needs to tell the client that they cannot give proper legal advice based on the lack of information and to also advise the client that they may be accepting less or paying more in a settlement than what would be required by law. It is preferable that the lawyer communicate this in writing to the client.
I must say that this decision, albeit necessary, is nothing "earth shattering" to me or my fellow collaborative family law practitioners. We are fully aware that our primary role is to protect our clients the same way that a traditional family lawyer (ie. litigator) must. We must keep abreast of the changing law and we need to advise our clients about how the law affects them. People, including the lawyer who was sued, may have the misperception that in a collaborative family law process, the lawyers do not need to "cross their t's and dot their i's" in the process simply because the clients who have entered into the agreement seem happy with the deal they are reaching. The only difference between a settlement reached through collaborative family law process versus traditional negotiation or litigation is the tone of the process itself -- the collaborative process is premised on the parties and lawyers working collaboratively, whereas the traditional negotiation/litigation process is not. However, both processes require that clients receive thorough and well reasoned legal advice before they enter into binding agreements. The standards of that legal advice are definitely no different between the processes. (In fact, many of today's collaborative practitioners were once traditional family lawyers practicing in the court system.)
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