Negotiating Alimony in Tennessee, Part Two
- At July 29, 2016
- By Miles Mason
- In Alimony
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In our previous post about negotiating Tennessee alimony, we covered a lot of territory. But there is much more every divorcing spouse should know about the negotiation process relating specifically to alimony. Just like many a productive negotiation, we continue the conversation in this Part Two.
Negotiate alimony in Tennessee
These are the alimony negotiating points we covered in Part One:
- Is alimony settlement possible in every Tennessee divorce?
- What can be negotiated with alimony?
- What happens if there is no voluntary alimony settlement?
- What are the methods of negotiating alimony?
- How is alimony included in the marital dissolution agreement (MDA)?
Let’s pick up where we left off.
When Do Alimony Negotiations Begin?
Before filing, often spouses may discuss the future. If one states unrealistic expectations of amounts to be paid and received, then that can impact future negotiations. Managing unrealistic expectations is one of the most challenging aspects of divorce for any family lawyer.
Consider two divorce examples, both following an 18-year marriage:
In the first divorce, the supporting spouse runs a complete settlement proposal by both a lawyer and financial advisor. The settlement proposal includes consideration of existing assets and debts projected into the future. In this example, the supporting spouse will have a much more concrete understanding of the realities of a situation than the other spouse, giving the supporting spouse a negotiating advantage.
In the second divorce, the supported spouse demands $6,000.00 per month for 15 years because the supported spouse’s sister received that amount following her divorce from a successful commercial real estate broker. Without running any sort of financial analysis of the projected future monthly budget, the supported spouse is “flying blind.” When a supported spouse is seeking an initial alimony amount which may be very unrealistic considering the length of the marriage, supporting spouse’s income, college tuition demands, and other financial realities, then that supported spouse’s negotiating leverage is arguably much weaker than if an informed and realistic proposal is first discussed.
Parents often make important decisions about their children before the divorce is filed, too. They can decide informally who the children will live with most of the time; who will have legal decision-making authority; and how parenting time shall be divided, among other things.
Spouses often make decisions regarding distribution of property and debts. “How about you take the Mercedes and that loan. I’ll take the Toyota and this loan.” “Agreed.”
All of these things could be settled to some degree before the divorce is filed. The attorneys are then charged with reducing those agreements into a settlement document that ultimately passes court muster. In Tennessee law, that written settlement agreement is the spouses’ MDA.
What Negotiating Strategies Do Attorneys Utilize?
Negotiating strategies vary from lawyer to lawyer like fingerprints. And, like marriages, each lawyer’s strategy is unique. Some lawyers tailor their strategies to each client’s situation while others say the same things for each case. Experienced family lawyers may suggest the client obtain a detailed lifestyle analysis prepared by a forensic accountant. Other lawyers may seek the expert opinion of a vocational expert witness. Some lawyers may start with unrealistic initial offers engineered simply to shock the other spouse. Yet other lawyers may start with a very reasonable proposal and not back off a dime.
What negotiating strategies do attorneys utilize?
How often are negative negotiating tactics used? Unfortunately, quite often. How does an experienced family law attorney handle negative tactics designed to put the opposing party on “tilt”? Simple. By refusing to be “tilted.” By not being put off-balance. By being detailed, professional, and realistic. By keeping a calm, level head no matter what is going on. Experienced family lawyers will have done their research (legal and financial) and have a plan for dealing with such negative tactics. All experienced family law attorneys should have a program or system for analyzing alimony proposals.
Two alimony negotiating methods are worthy of discussion here: the entrench method and the incremental method.
- Entrench Method: Some spouses who come to the negotiating table may propose a “take it or leave it” style. We call this the entrench method. While there are obvious emotional aspects to this which make sense to some parties, the “take it or leave it” negotiating strategy offers discounts yet discourages settlement negotiations. Often, experienced family lawyers will counter with a simple response – “My client will leave it.”
- Incremental Method: Some spouses will negotiate by agreeing to continue negotiating in “rounds.” With this method, talks continue. Details are discussed. Exact terms are negotiated piece-by-piece. More than one proposal may be made at each round. For example, with a proposal for rehabilitative alimony of $2,000.00 per month for six years, the other spouse may respond that he is willing to either pay transitional alimony of $1,500.00 per month for five years or rehabilitative alimony of $2,000 per month but limit the length of time to only 30 months.
For attorneys, negotiating alimony is part science and part art. The science of negotiating alimony is legal research, considering the projected incomes of both parties, and considering their projected future expenses. The art of negotiating alimony revolves around timing and the calculated release of details, arguments, and proposals. Many family law attorneys will agree that the timing of proposals and the manner in which the proposals are communicated can be just as important as the terms themselves.
Why Try to Settle Alimony?
There are many reasons why settlement by agreement should be tried, even if complete agreement is never reached. The best approach is to negotiate agreement on type, length, amount, and termination of alimony as part of a global settlement of all issues, including parenting.
Here are a few reasons why spouses should try settling the alimony question voluntarily:
- More Favorable Outcome: The outcome of a voluntary settlement on alimony is far more likely to be favorable to both spouses than the outcome of a contested divorce.
- Voluntary Compliance: When the spouses agreed to the terms of their alimony arrangement, they are more likely to abide by them. Voluntary alimony compliance with a settlement agreement is always preferable over having to seek enforcement orders to compel compliance from a disgruntled payor.
- Spouses Decide: With a voluntary settlement, the spouses retain greater control over terms, solutions, and results. Lawyers provide legal advice and make recommendations, but the decision to settle is not theirs. The decision of whether to settle for rehabilitative alimony, or some other type, is for the spouses’ only.
- Judge Decides: If the spouses cannot agree on alimony, then the judge must decide for them at trial and will dictate alimony orders. This is risky business. The judge will decide alimony for the two strangers appearing in the courtroom, relying only on limited evidence and testimony.
- Litigation Is Costly: Trial preparation is expensive. Generally, litigation is far more costly and emotionally taxing than participating in alimony settlement negotiations.
- Private Negotiations: Litigation cannot offer the privacy that a negotiated settlement can provide. Negotiating alimony lets spouses keep family concerns private, although shared with their lawyers (who aren’t talking). They need not share the reasons behind their settlement agreements with the court. So long as their spouses’ agreements are legal and reasonable, they can keep most things on the QT, out of public display.
Negotiate Alimony or Make a Deal with the Devil?
Negotiating alimony is not akin to making a deal with the devil, despite whatever marital misconduct was alleged as grounds for divorce. (Or was the unspoken reason for the marriage breakdown in a no-fault divorce.)
Don’t let emotions cloud judgment. Do not feel guilty or angry about trying to settle alimony. Do not let emotions interfere with negotiations. Too many spouses feel badly, are frustrated, hurt, or angry about the marriage breakdown. They feel guilty and give up too much. They feel angry and want everything. Some try to use alimony to punish the other spouse.
Alimony negotiations can result in long-lasting, legally enforceable, financial obligations. Be reasonable. Keep passion and friction out of it as much as possible. If you feel vulnerable, simply let your attorney do all the talking. Work out a reasonable arrangement that is fiscally responsible and practicable given the circumstances known or foreseeable at the time of divorce.
Use knowledge of your spouse to your advantage. Be assured, the other party is doing precisely that. This is a negotiation strategy. Anticipating when a spouse will ‘dig in’ his or her heels could be useful during settlement talks.
Use knowledge of your spouse to your advantage in negotiating alimony.
Here’s an illustration: Knowing the other’s greatest love is the 1969 Shelby GT500 Mustang in the driveway, the spouse uses that insight to obtain a better settlement or other property division. The other spouse offers to take ownership of the Mustang as cash alimony in solido plus transitional alimony money for an additional six months.
Spouses can make alimony nonmodifiable. This is significant. Alimony in solido cannot be modified under current Tennessee law. Transitional alimony is also non-modifiable because it must be an ascertainable lump sum at the time of the divorce.
Two other types may be modified for good reason. T.C.A. § 36-5-121. Alimony in futuro and rehabilitative alimony could be modified after divorce. That is, unless a non-modification provision is included by agreement in the parties’ MDA.
Never forget that alimony in futuro is for life and if it’s modified, could be increased, decreased, adjusted, or terminated. Spouses can, often do, agree to prohibit modification of existing alimony orders. By doing so, they insert heightened predictability into their alimony arrangement and, as with all important decisions, must live their financial lives accordingly.
Every case will involve unique circumstances, but the general order of alimony negotiations will be as follows:
- Type;
- Length of term; and
- Amount.
Keep three things in mind. First, less alimony over a longer period can amount to substantially more money. For example, $500.00 per month times 84 months is much greater than $1,500.00 per month for 18 months. Second, alimony is often the last financial term negotiated after property division and child support. And third, reference my Lifestyle Analysis article and strongly consider making use of vocational experts if a spouse’s earning capacity is disputed.
To learn more on alimony in Tennessee:
