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How is Divorce Mediation / Family Mediation Utilized in a Large or Complex Financial Situation?

Mediation is a tool specifically implemented to reduce legal costs for all or any portion of the negotiation. Whether and how mediation may be appropriate in financially complicated cases depends on the circumstances.

To negotiate financially complex matters on their own, the parties must have sufficient understanding of the financial issue in order to logically negotiate the fair division of their assets and the allocation of their debts. It is not necessarily the value of the asset that dictates complexity. High valued assets may be no more financial complex to negotiate than lower value assets. Determining how a business interest of one of the parties may be divided is an example of a potentially complex issue, especially where one party owns a portion of a substantial business. Stock options or stock plans can create complex issues, including tax issues.

There are many ways mediation can be used in a cost-effective manner in the financially complex negotiations. If certain financial matters are too complex for either or both parties to knowledgeably negotiate, then mediation may be used in a more limited way. There are likely many parts of the negotiation still appropriate for mediation, like custody, child support, and division of non-complex assets; and the parties’ attorneys can negotiate the remainder. Alternatively, the mediation can be used as part of a collaborative negotiation, where attorneys or financial professionals are present for the complex portion of the negotiation. In certain cases, the parties can ask for a co-mediation, where a neutral financial professional meets with the mediator and the parties; or the parties can separately meet with the neutral financial professional and bring their agreements back to the attorney-mediator to complete the negotiations on the remaining matters.

No matter what, where there are high value, complex financial negotiations, the parties should only use mediation in conjunction with ongoing attorney consultation. In high asset cases, one party is often fearful that assets are being hidden. Therefore, parties can ask their lawyers to sit down and mediate after formal or informal discovery is completed, as an alternative to going to trial and letting a judge make a determination. Even where attorneys are involved in the settlement negotiations, the mediator provides the forum for settlement. The attorney-mediator can produce the draft Agreement for attorney review. Parties often feel natural reflexive distrust of the opposing lawyer’s Agreement draft. In these cases mediation often reduces costs.

Therefore used appropriately, mediation in complex financial cases remains a vital tool to reduce legal fees.

Financial complexity may also exist due to financial distress. In these cases the parties and the mediator will work to find cost-effective assistance to reach agreement. For example, the Mediator may address custody issues, get informal agreements to maintain the financial stability i.e. who is paying what bills, while the negotiation goes forward with a neutral financial counselor to address future budgets, give tax implication insights which might mean a lot to a party’s monthly budget. Sometimes parties may consider their bankruptcy options, which can provide great relief. Based on the education provided by the financial professional or the bankruptcy attorney, the Mediator incorporates all of the resulting agreements into the draft Agreement for attorney review.

Whether your matter is financially complex due to financial abundance or financial distress, the use of a mediator trims legal costs in separation and divorce.

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