The success of a divorce mediation depends on a lot of factors such as the willingness of the couple to cooperate, level of contention, and complexity of the case. Typically, creating a Marital Settlement Agreement (or Stipulated Judgment) that both people is fair is a team effort. The divorce mediator must do his/her job to guide the couple through the negotiation, while providing the couple with any important legal information they may need to know. The couple, on the other hand, is responsible for coming to the table willing and ready to negotiate. Since most couples are going through this process for the first time, they do not know how to prepare for the conversation. Of course, this sounds pretty vague when you are the person going through a divorce. In our opinion, this is a list of the top issues to think about prior to coming to your mediation (or even your initial consultation meeting):
1. Minor Children:
You and your spouse have most likely been co-parenting a specific way during your marriage. Because things are going to change after your divorce, you may want to sit down with your spouse and discuss a couple of things. First, talk about your respective work schedules. Do these schedules leave time for picking the kids up from school and late nights of helping with homework? If not, see if you can rely on the other parent to help with this, or even a trusted third party like a family member or nanny. During your divorce, your children are going to need all of the support they can get.
2. Real Estate:
For many couples, real estate is the largest or only asset in the divorce. When couples purchase a home, they are usually qualifying for the mortgage using both of their incomes, and sharing the expenses in some way, shape, or form. After the divorce, this is going to change. If one of you wants to stay in the house (or both of you for that matter), think through the financial consequences of that choice. Can one of you afford to pay the mortgage on your own? If so, is that person going to be able to refinance the property to remove the other from the mortgage? If you do not want to keep the house, are you willing to sell it right now? Is there equity in the home? Some couples start preparing to sell the home right away. If this is the case, you will want to contact a real estate agent you both trust to get you started. If you are thinking you may want to jointly own the house for a period of time, then think about what you would want that to look like. Would one of you stay in the house? Would you rent the house to a third party? Who would pay the mortgage?
Thinking through some of these questions ahead of time really gives you a head start to a successful divorce mediation.
3. Furniture:
If you and your spouse are in the process of separating your household, start by taking a room-by-room inventory of the furniture. In some cases, one spouse will keep the furniture from the former family residence. In that case, the other spouse will usually receive 50% of the current, fair market value of that furniture. That way, the spouse can start over with new furniture in his/her new home.
4. Vehicles:
Do you and your spouse each want to keep your own vehicle? Are your vehicles owned or leased? These will certainly be points of discussion during the divorce mediation process.
5. Retirement and Investment Accounts:
We appreciate that you and your spouse have worked very hard to save for your retirement and investments. You have most likely spent years making financial sacrifices and hard decisions in order to save your money. Before your mediation, it is a good idea to sit down with your spouse to discuss your retirement accounts. You can even review your statements together, or sit down with your financial advisor to figure out how much is in the accounts and where the money is being held. Again, anything you can do to arm yourself with information is a positive step in the right direction.
6. Businesses:
If you and/or your spouse own a business, you will want to discuss what will happen to the business once you are divorced. Many couples choose to continue to operate the business as joint owners. If you decide to do this, it is a good idea to sit down with your corporate attorney to discuss an exit strategy in the event things were to go wrong. If one of you is going to continue to own the business, what is the value of that business? Keep in mind that if the business is community property, one spouse will most likely have to buy the other spouse out of his/her community property interest in that business. Finally, you and your spouse could decide to sell your business to an independent third party. If you do, make sure you take your time. You don’t want the sale to look like a “fire sale” caused by the divorce. Even if you are desperate for closure, if you have spent a long time building the business, you should do your due diligence in the sale.
7. Life Insurance:
Do you and your spouse have any life insurance with cash-out value? If so, this is an asset and may be community property depending on when you acquired the account. Talk to your spouse about what you plan to do with that insurance, as well as the possibility of revisiting your decisions on beneficiaries for existing accounts. When you have this conversation, it is a good time to pull out your Estate Planning documents (will, trust and health care directives) to make sure that those are kept up to date during this process.
8. Debts:
Debt is never a fun topic to talk about. Many couples spend more time avoiding this issue than confronting it. Unfortunately, it is something that must be covered during your mediation appointment. Before you come to your consultation, sit down with your spouse to discuss the amount of your debt, and whether or not you acquired that debt during the marriage. There is nothing worse than being surprised with a large credit card bill you weren’t aware of during this process!
These are just some of the topics we cover in mediation, but the checklist provided here should help you get started in preparing for the process. At Alternative Divorce Solutions, we pride ourselves in preparing our clients for their divorce mediation as much as possible. Information is power!