Episode 64 Transcript: When Your Spouse Won't Negotiate

In this episode, I wanted to speak to how you can address or approach the following challenge, which is what happens or what should you do if your spouse is not willing to follow the law on a particular topic? I want to give a little bit more color to that because, of course, when you are negotiating a settlement out of court, you’re free to not follow the law on practically any topic if you can mutually agree. More what I have in mind is where the law is very, very clear on the outcome of a particular topic and the standard practice of negotiating settlements is very clear and very much in line with the law, how do you handle it if your spouse, despite that, is simply not willing to follow the law or to move even anywhere in the direction of the law in your negotiation?

A couple of examples of where this might come up would be, for instance, let’s say you’ve been in a long term marriage and you have retirement accounts and the law would have a judge divide those between you equally if you were in court, and the standard practice in negotiation is to divide those kinds of accounts basically equally between you, but your spouse is absolutely unwilling to divide the retirement accounts in any way. He or she is insistent that they will keep their accounts, you’ll keep your accounts, and there will be no division, no equalization of those accounts, despite what the law directs and what common practice directs.

Another example might be where you have a very long term marriage, and you have one spouse who is very much the higher-earning spouse and continues to be, one spouse who is very much the lower-earning spouse and continues to be, and the higher-earning spouse is simply and absolutely unwilling to pay any amount of spousal maintenance or alimony, despite the fact that the law clearly calls for it, and common practice in a negotiation would certainly provide for alimony, but your spouse is just absolutely unwilling. Or child support would be an equal example, where it’s very clear that if you went to court, your spouse would be ordered to pay you child support and he or she is simply unwilling to do that in the context of your negotiation process.

That’s more what I’m talking about in this context when I say not being willing to follow the law is in a pretty egregious way where you and your spouse do not mutually agree to opt out of the law. Your spouse is unwilling basically to comply with or to agree to the basic terms of what the law would provide for. So, what can you do in that kind of situation? You’re not in court. You don’t have a judge who can order them to do one thing or another. How can you handle it when you are meeting with that kind of resistance from a spouse in a negotiation process?

First of all, I think you just need to acknowledge the emotional or psychological component there, which is that it’s extremely frustrating and probably somewhat insulting to you to feel like your spouse is not willing to come to the table in a reasonable way. It’s not my advice that you stop there or that you spend a ton of time on the psychological or emotional component of that, but just that being aware that it would be reasonable and normal to have a reaction to a spouse’s resistance or rigidity, as I’m describing, it will help you be able to work with it in a more productive way to acknowledge that for yourself at the outset.

The next thing you want to do is try as best you can to make a very rational assessment of what is in your best interests. Part of that, and perhaps a very large part of that, will be making a very rational measurement of what’s in your financial best interest, and then we’ll talk about some of the more intangible assets or values, considerations that you want to have in mind when you’re weighing ultimately, rationally what is in your best interest in terms of how to proceed. You don’t want to simply reflexively say, “Well, you’re being unreasonable. Therefore, I’m going to court” when it might not ultimately be in your best interest. So let’s just talk about from a financial perspective how to think about what route is in your best interest when you’re bumping up against your spouse being unwilling to do anything reasonable on a particular financial topic.

You want to start by thinking about and trying to get a neutral assessment of how likely you are to get what you’re asking for or what you think is reasonable if you go to court. For a neutral assessment, you can really turn to your mediator, if he or she is an attorney for something like that, to say, “If I went to court on this issue, is it 100% likely to be resolved as I’m asking for? Is it 50% likely?” That makes a big difference. Really the kind of case or the kind of circumstance I’m talking about is where it’s 90%, 95%, 100% likely to be resolved in the way that you’re asking for, and yet your spouse is still unwilling to resolve the case in that way.

To develop this example, let’s say that your mediator, the neutral professional in the case says, “Yes, it is 99%, 100% likely that a court would order child support in your situation, or that a court would equally divide your retirement accounts in your situation.” So you start there and then look at the value of what you’re talking about. An ongoing stream of income from child support can be a little bit harder to estimate the value of. It’s possible but just a little bit more complex. But let’s say you were in disagreement about division of your retirement accounts and what you’re asking for would be a 50/50 division, which, in essence, would result in you receiving, say, $100,000 from your spouse, and your spouse is proposing that you receive zero dollars from them. If that’s the case, if there’s a 100% likelihood that you would get what you’re asking for going to court, and again, you don’t want to assess that likelihood yourself because, unless you’re a matrimonial attorney, you probably wouldn’t have reason to know it, and also, you’ll be biased.

But if a neutral professional has said it’s 100% likely that you would divide the accounts as you’re asking for, and thus, you would receive $100,000, the value of what you’re asking for is about $100,000. In contrast, if a neutral professional said to you, “It’s likely that you’ll receive what you’re asking for, but call it 75% likely that you’d receive that $100,000 that you’re asking for,” you want to discount the value of what you’re asking for by that percentage likelihood that you’ll get it. So what you’re asking for would then, in turn, have a value to you of about $75,000. I mean, this is an approximation, but it’s really important to bear in mind that you need to discount whatever it is you think you’ll get in court by the likelihood that you actually will get it in court.

That likelihood calculation or estimation you really want to come from a neutral professional, if that’s possible. Otherwise, you might want to pay attention to the likelihood that your attorney estimates for you and then see if you can get feedback on what your spouse’s attorney estimates the likelihood to be. Then, this is simplistic, but you can average the two if there’s not a mediator working on your case, just to give you a more realistic sense of how likely it actually is that you would get what you’re asking for.

But let’s go back to saying that you’re essentially asking for $100,000 and you’re being told by your neutral mediator that it is guaranteed 100% that you will receive that in court that has $100,000 in value, and then your spouse is offering you zero dollars on that point. So then you just want to look at the difference. There’s a $100,000 difference between the value of what you’re asking for and the value of what your spouse is offering you. That’s the number you really want to bear in mind as you think about whether or not it’s worth it to go to court for $100,000, or the difference between the value of what you’re asking for and the value of what your spouse is offering you.

Now, when it comes to measuring the cost of going to court, there are a couple of different things that you want to have in mind. First of all, of course, is the cost of the attorneys, the cost of litigating in court. It’s impossible for me to estimate that at the outset. It’s typically impossible for any attorney you talk to, to estimate that at the outset, but it’s worthwhile asking what they think a range of reasonable fees would be for going to court, whether it’s on this issue, or if you go to court, are you in a situation where you or your spouse is saying, “If we go to court at all, we’re going to court on all issues, and so we’ll be litigating all issues.” That, in turn, becomes much more expensive than just litigating, for instance, the division of your retirement accounts. So there’s the financial cost or the professional fees cost of going to court.

There’s also certainly a cost in terms of not just your financial resources, but your own energy and time. Going to court does require you to work on the court schedule and the frequency with which you have to appear in court varies by jurisdiction, but you certainly will have to spend some time sitting in court usually half a day. Mentally, psychologically, it also takes a toll on you. Not to say that mediation does not, because it certainly does, but there’s not an easy way to assign a number to those costs: to the cost of the resource of your time, the cost of the resource of your psychological wellbeing, or the psychological toll that being in litigation is taking on you. You just want to be mindful that the cost of going to litigation is not just the cost of the professional fees. That’s essentially what I’m saying.

So let’s say then that you calculate, you estimate that the cost of going to court is going to be probably around $25,000, and you’re going to court with the hope of and the likelihood of receiving $100,000. So then you want to look at, and this gets a little bit complicated because the cost, the professional fees cost is a post-tax number that’s just an expense to you, whereas if we’re talking about a retirement asset, which is pre-tax, we’re not exactly comparing apples to apples. Be that as it may, to keep it really simple, you then want to ask yourself, “Okay. I’m considering going to court for the value of $100,000, but it’s going to cost me $25,000, so essentially what I would be gaining if all goes as anticipated is $75,000. Is it worth it to me to go to court, to spend the time, to spend the energy for that amount of money?” And the answer may be obvious to you that it’s an obvious yes or that it’s an obvious no.

If it’s an obvious no, then the rational thing in your best interest is to simply accept what your spouse is offering. A few comments on that in a minute, but rationally speaking, if what you stand to gain by going to court or what you are likely to gain by going to court less the cost to you of going to court is just not worth it to you, don’t go to court. It’s not in your best interest and it’s not likely to make you feel better to go to court to spite your spouse or get back at them for being completely unreasonable. Again, totally frustrating, quite insulting if someone is really not acting in a reasonable way in the negotiation process, but you don’t want to throw good money after bad to say, “Well, you’re being unreasonable, and therefore, I’m going to punish you by also punishing myself by forcing myself to go to court.”

That said, if it’s clear to you that it is 100% worth it to go to court for a difference of $75,000, then by all means, go to court for $75,000. Especially where there’s a high likelihood that you will get what you are anticipating or what you’re advocating for, it’s all the more worth it because you don’t carry the great risk that, oh my god, you could pay the money and spend the time to go to court and then not get what you’re after, which would be really disappointing.

Two other thoughts for you. One is that there is an intangible value that’s hard to put a number to, to feeling good about or feeling that you can accept how your divorce settlement process went. It may, and reasonably so, be painful enough to you to consider that just because your spouse is being unreasonable, that you will end up having to accommodate him or her because you don’t want to go to court. That may be uncomfortable enough that it actually becomes worth it to you to go to court. I know that that sounds very similar in a way to going to court just to spite or punish your spouse if they’re being unreasonable, but I think it’s a slightly different inquiry. It’s trying to ask yourself, will you be okay with your decision not to go to court and with your decision essentially to say, “Okay, spouse, you’re being unreasonable and I don’t want to spend the time or money going to court, so I’m just going to accommodate your unreasonableness”? Are you going to be able to live with that? Are you going to be able to accept that knowing that rationally it is in your best interest?

If the answer is that you’re not and that it will really irk you and plague you that you acquiesced to your spouse’s unreasonableness in the process, it may be worth it to you to go to court. Even if things do not resolve in your favor, you will have the peace of mind of knowing that you at least tried for a fair outcome. Even if it didn’t go your way, that you at least tried and that you did not fall into the trap of accommodating your spouse’s unreasonableness. There’s really not a right answer here. It’s a very personal inquiry. I just want to point out that at the end of the day, this is not a financial consideration, but there is a real value to you knowing that you can be at peace with the decisions that you made in the context of your divorce process.

The final thing I want to say, and this is a tough one to gauge in trying to figure out your strategy in an issue like this, but I have observed that for some spouses who take a very rigid and potentially unreasonable stance on a particular issue, again using the retirement account example, where it’s completely obvious that if you went to court, your retirement accounts will be equalized, but your spouse is saying, “Nope. Over my dead body. Never going to equalize them,” I have observed where the spouse in your shoes goes to court actually says, “Okay, you know what? I can’t negotiate with that. That’s not reasonable. I don’t want to go to court, but I don’t really have another choice, as I see it,” sometimes you will have effectively called your spouse’s bluff. You want to be careful to go to court just to call someone’s bluff because they may not be bluffing and you need to be ready to accept that you’ve made a decision to litigate.

Of course, you can always cease litigating and accept what your spouse is offering, but sometimes what will happen is that just the reality of going to court and everything you have to prepare to show up even for your first appearance will kick a little bit of reality into your spouse and they may relent or maybe they’ll make more of a compromise proposal rather than taking more of a rigid stance on what they’re willing to do. Have that in the back of your mind. It shouldn’t be your sole motivation for going to court because it doesn’t always work out that way that essentially you call your spouse’s bluff and they end up being willing to compromise when they see that you’re serious about being willing to go to court. But at the same time, as I have counseled clients in the past, you can initiate a process in court, see if it changes your spouse’s perspective at all, and if it doesn’t, you’re not obligated to stay in court for the duration. You can always say, “Okay, you know what? We’re a couple of months in, and I’m just going to accept what you’re offering because it’s not worth it to me to continue.”

Of course, in that situation, I suppose you bear the risk that that offer may not still be on the table, but it’s just something to bear in mind that I have observed happen in cases, which is that sometimes a spouse will take a very rigid position with the assumption that you would never be willing to go to court or call their bluff. And in the few cases where I’ve seen that be necessary, it can sometimes effectively call the more rigid spouse’s bluff and then they’d become a little bit more willing to compromise. So, something to consider as you think about and weigh your different options for negotiating a particular point on which your spouse is being quite unreasonable and is not willing to negotiate even within the realm or the range of what’s called for under the law.

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