Click here to learn about Canada’s COVID-19 Economic Response Plan and support available for individuals and businesses
Collaborative Divorce generally refers to a legal process enabling couples who have decided to end their marriage to work with their lawyers and, on occasion, other professionals to avoid the uncertain outcome of court and to achieve a settlement that best meets the specific needs of both parties and their children without the underlying threat of litigation.
The process allows parties to reach a fair and durable settlement agreement on all issues, including parenting, financial support and the division of family property. This voluntary process starts when the couple signs a contract (a “participation agreement”) binding each other to the process and disqualifying their respective lawyer’s right to represent them in any future court proceeding (the “recusal pact”).
Each approach to the divorce can be distinguished along the following attributes:
The main benefit of a Collaborative Divorce Agreement is that it is designed to produce a durable agreement tailored by the parties, for the parties, to fit their specific situation. This contrasts with a court judgement dictated by a judge who has limited intimate knowledge of the family circumstances. It is meant to provide a win-win outcome (rather a win-lose outcome) for the family.
Collaborative Divorce also has the added benefit of being cost efficient for all parties involved as the necessary tasks in the collaborative model are assigned to specialist professionals without duplication of effort.
In addition, the costs associated with court proceedings (i.e. court orders, depositions, preparation for and attendance at trial for various professionals) are also avoided.
More information on the Collaborative Divorce process in BC can be obtained here.
Depending on the situation, the parties might require a Neutral Financial Specialist with specialized expertise on the collaborative team. For example, if there are significant tax issues, a Chartered Professional Accountant (CPA) can help. Or, if there is a family-owned business, a Chartered Business Valuator (CBV) can value it for you.
At Smythe Advisory, we have Chartered Business Valuators that are trained members of Collaborative Divorce BC. Here’s what they have to say about the Collaborative Divorce process:
“As financial neutrals specializing in business valuation, we’re responsible for estimating the fair market value of an ownership interest in a family-owned business, based on a thorough review of all relevant information and with all parties participating in the process. Our objective is to provide a well-supported and realistic assessment of value, presented in such a way that everyone understands and has confidence in.
If requested, we can also access tax specialists within our firm to quantify the tax impact of various settlement alternatives and determine the most efficient course of action that reflects your specific circumstances.”
“We strive to provide fair and balanced reports, at a reasonable cost, in the context of family law, including valuation of private businesses and the calculation of income in accordance with the provisions of the Federal Child Support Guidelines and the Spousal Support Advisory Guidelines.”
If you have questions about the Collaborative Divorce process, or would like to learn more about the role of CBV’s, please get in touch with one of our trusted advisors to learn how Smythe Advisory can help provide the service and value you need.
CPA, CA, CBV
Partner - Advisory Services
Mike has over 25 years of experience providing accounting and business advisory services, with a focus on the Canadian insurance industry.
CPA, CA, CBV
Alex Wong is a partner at Smythe Advisory and is focused on being a trusted business advisor to his clients.
CPA, CA, CBV
Director of Valuation Services
Paul Woodhouse focuses on providing financial advisory and litigation support services to clients.
Gagandeep specializes in M&A advisory engagements, as well as business valuations in the contexts of management buyouts and succession planning.
Arthur’s mandate is to assist Smythe clients in Western Canada in preparing for and executing business divestitures or acquisitions.