Divorce Negotiations and the Time Value of Money

This blog has yet to address family law matters directly, and perhaps that is because I have been waiting for the right words to express some of the slings and arrows that come along with being a family law practitioner. Most people would consider me a divorce lawyer. I consider myself a catalyst for change. Once a prospective divorcee contacts me, he or she is already in a crisis. It is my job to be a steady rudder through stormy seas, or as my mother would say, “keep it all together.”

Divorce is not fun for anyone, but I take my responsibility to my clients very seriously, and I make it a point to keep a clear head and to consciously guide them away from the negative emotions that led up to their current state. More importantly, I keep them and myself focused on the present because the past cannot be changed, and the future is unknown unless we take (or do not take) certain steps to prepare for what we would like the future to be. Just like any other productive pursuit in life, the first part of the journey starts with a plan.

I was fortunate enough to counsel a client who was presented with a very reasonable divorce settlement offer. His initial response was to reject it. She wanted to keep the house, and for him that was a deal-breaker. I took a moment to talk to him about the time value of money. I said, “If you win $4000 at a roulette table in Las Vegas, what does a smart person do?” His response, “Get up and leave.” I smiled. He didn’t smile back, but he took the deal thanks to me and a very experienced mediator.

Because I am also a mediator, it is in my best interest to be transparent and explain why I do what I do. That’s part of the inspiration for this blog, and it’s also a selling point for this firm. I take the time to talk to my clients and explain the pros and cons of any decision they may make because ultimately I am simply an agent. All lawyers act on behalf of someone else. In the case of my divorce client, he was allowing an emotion, particularly spite, to get in the way of his own best interests. At its most basic level, the time value of money dictates that it is better to have money now than to receive it later. The reasons why involve interest and potential for growth, but in this example, additional reasons existed like the time and expense of further litigation and added costs for my client and his future ex-wife. For a more exhaustive discussion of the time value of money, please see here.

The moral of the story in this case and others is that an attorney’s role is not simply to provide documents and file them in courts. An attorney is also a counselor and ought to be prepared to give thought and sound guidance to the needs and concerns of her clients. Every situation is different, and some folks expect attorneys to perform the impossible, but it is our duty to educate these misguided souls about how there are no guarantees in life, but if you have a competent advocate, your chances are far better than trying to fend for yourself in an opaque legal system. For more information about how I might assist you with your divorce, please don’t hesitate to call.