One of the many selling points for mediation versus litigation is time. In general, divorcing couples who are committed to resolving matters out of court can get divorced in far less time than it would take a case to go to through the court system. That said, a mediation should not be seen as a “quickie” divorce. If anything, it makes paying attention to the details even more important.
Why? Plain and simple, you have to come up with a divorce agreement that you can live with not only today, but five to 10 years down the road. If financial information surfaces after the divorce is final, or if it is available at the time of the divorce but one or both parties choose to ignore it, it can be extremely difficult to go back and change the divorce agreement. So being as thorough as possible during your mediation is critical. That’s why I always advise my mediation clients to retain counsel, even if they agree on everything.
For a typical mediation, I want couples to provide the following financial records:
- Three years of tax returns
- Current pay stubs
- Statements for all bank accounts, joint or individual
- Retirement plans statements (401(k), IRAs, etc.)
- Life insurance policies
- Deeds and mortgage statements
- Credit card statements (joint and individual)
- Pension plan (an appraisal should be conducted as part of mediation)
I put copies of these documents (and any others that are relevant to a particular case) in a tabbed binder. Each person receives his or her own binder identical to my own. Both parties are required to fully disclose all financial matters and provide all financial documents requested and they sign financial statements for the court under the pains and penalties of perjury.
This critical step of compiling the financial records can involve a lot of legwork for divorcing couples. And I’ll be honest, not all mediation attorneys demand the level of detail that I do. I can live with that. It’s been my experience that the more attention paid to these details, the less it is likely for issues to resurface a few years later.
When going through a period of turmoil and transition like a divorce, it is perfectly normal and natural to want to get through that process as quickly and painlessly as possible. What divorcing couples in mediation (or another form of divorce) must realize is that trying to modify financial arrangements after the divorce is final will be even more difficult and painful.
While it’s not the greatest analogy, think of a painting. What’s easier, taking a blank canvas and painting a picture from scratch or taking an existing painting, years since dried, and trying to change a detail on the central figure’s face? Your best opportunity for a divorce that you can live with is during your mediation. So take the time to be thorough and thoughtful. Use your attorney if you have financial questions. In the long run, it will still save you time and money.