Many divorcing couples choose mediation as a means of reducing costs. Some might make that decision without realizing why it costs less. To that end, it’s quite simple: couples have to do a considerable amount of the work that is usually the responsibility of their attorneys.
- Last month, we covered some of the documents couples need to bring to the very first meeting with the attorney. Those include:
- Bank statements – joint and individual;
- Mortgage statement indicating the amount of the monthly payment and mortgage balance; also, a copy of the deed;
- Second mortgage or home equity line statements;
- Pay stubs (last three stubs are required);
- Tax returns (last three or four years returns with paperwork like W2’s, 1099s, etc.);
- Insurance statements (home, auto and healthcare);
- Auto loans, titles to vehicles;
- Credit card statements (joint and individual);
- Retirement fund statements; and
- Investment account statements (individual and joint).
Collecting those physical documents is just the start. You and your spouse need to understand the spending in your marriage and household. This is so that you know what it costs you to live before you reach a financial settlement. You will also have to fill out a court mandated financial statement.
In many marriages, one spouse will handle most, sometimes even all of the finances. When marriages like that end, preparing and understanding the financial documents for mediation can be quite an eye-opener.
Not only do you need to understand monthly budgets vs monthly income, the next step is to educate yourself on marital assets and liabilities, things like annuities, 401(k)s, pensions, real estate, mortgages, loans, credit cards and more. This can be a little tricky for a spouse who has been on the outside of the financial dealings in a marriage. Even for one who has been involved, understanding how something like a pension works and negotiating that as part of a divorce settlement can be challenging
If you have children, you will also develop a parenting plan proposal. Creating this involves considerable thought on your part and then discussion with your spouse. A parenting plan usually starts with living arrangements. Will one spouse stay in the family home with the kids? Can you afford to keep the family house to make that happen?
The parenting plan will also include components such as visitation schedules, health care, schooling, etc. It will also have more detailed things like summer camp, piano lessons, after school sport pickups and more.
Working out these kinds of things takes some time and effort on the part of each spouse. You really need to put some thought into how you see your post-divorce life.
By this point, you might be wondering what work is the mediator doing?
The divorce mediator reviews your divorce proposal, asks questions about things that you have not considered and helps facilitate the discussion of each party’ s proposal. A critical question is what about this proposal is important to you? This very straightforward question gives the couple an opening to discuss their respective priorities in the divorce and how those priorities play into the proposal being made. Focusing on the “why” behind a proposal helps the parties brainstorm about whether it is possible to meet their respective priorities in more than one way. The hope is that explaining the priority behind a proposal to a trained, impartial third-party can result in a discussion leading then to an agreement.
- Essentially, the divorce mediator guides the negotiation of the various components of the settlement and then writes the Divorce Agreement and all of the other paperwork needed to prepare a complete package for the court. You and your spouse have to decide what you want and what you can live with.
That means identifying the issues you will fight for and what you will accept. Would you be willing to settle for a little less in one area than if you received more concessions in another area? Spouses need to have an idea in their minds about what these issues are and be okay with the idea that it won’t always be exactly what they want but something they can live with.
- Finally, in a mediation the parties usually go to the court hearing on their own.
- For other types of divorce, collaborative and litigation, attorneys can and sometimes do a lot of the collecting and heavy lifting. There’s a price to pay financially for that but for some people that price is worth it. Divorce mediation costs less because you are doing much if not all of that work for yourself. Couples choosing a type of divorce solely on financial considerations need to be aware of this going in. It costs less because you are doing more of the work.