Divorce Mediation: Is it right for me?
In this guide, we outline divorce mediation and the process behind it. See whether divorce mediation is the right path for you.
Jurnex is an independent registered investment advisor that specializes in supporting women going through divorce. If you’re ready to take the next step with divorce mediation, contact us for a free consultation today.
Divorce can be one of the most traumatic events of your life. But divorce doesn’t have to be a long, drawn-out battle with crippling lawyer fees. In recent years, Divorce Mediation has emerged as a good alternative for couples seeking more peaceful divorce resolutions.
What is Divorce Mediation?
In recent years, divorce mediation has become one of the most common methods of negotiating divorce. In this process, you and your spouse hire a neutral third party to oversee the separation. The mediator facilitates communication and helps the parties come to a peaceful resolution. It’s a much more communicative form of divorce that prioritizes creating a settlement that both parties can agree on. In a court-based divorce, a judge will often make a unilateral, binding decisions that give the couple no flexibility. But in the case of a mediator, you and your spouse have the freedom to choose whether to accept or reject the final divorce agreement. And if a couple is unable to come to an agreement, they still have the option of going through a legal-based divorce or a collaborative divorce.
Why Should You Consider Divorce Mediation?
Divorce mediation is a much more peaceful way for handling divorce. It has a number of important advantages over traditional court-based divorces. This has recently made it a very popular alternative for divorcing couples.
1. Mediation is less expensive than court-based divorces
Divorces cost an average of $30,000 per couple. Lawyer fees can be very high. And each spouse must hire their own attorney in a legal-based divorce. According to Divorce Court Attorneys, a two day divorce trial can cost as much as $25,000 in legal fees alone.
Divorce mediation, on the other hand, requires hiring just one third-party. Hourly rates for divorce mediators also tend to be lower, usually in the $200 – $500 range. Because you’re avoiding the endless back-and-forth between fighting lawyers, the number of hours used is also lower.
According to Equitable Mediation, the average cost of a mediated divorce is just $7,000 – $10,000. This includes the cost of drafting a Memorandum of Understanding (MOU) as well.
2. Mediation allows you to arrive at a peaceful resolution
Divorce mediation is a non-binding process. At the end of negotiations, either party can decide to accept or reject the final proposal. This is actually a powerful tool. Since each party is not required to accept the final proposal, there is an incentive on both sides to build a peaceful resolution. In court-based divorces, the parties can be motivated towards a “scorched-earth” approach since neither party has anything to lose.
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Emotions already run high during a divorce. Adding the stress of a court-based divorce often make couples demand more than they would. Spouses often ask judges for a far larger settlement in hopes to sway their thinking.
3. Financial Planning Mediators can help detect pitfalls in settlement agreements
Some mediators also have expertise in financial planning. These types of mediators can help couples identify pitfalls with settlement agreements. People often don’t realize that lawyers and judges are not trained in financial analysis. They often have to consult CPAs or financial analysts to get a clearer picture. Often, legal settlements will award the non-working spouse (usually the wife) ownership of the home, but fail to award enough money for the maintenance of the house. The wife will own the house, but will eventually find herself unable to make the mortgage payments when alimony payments decline over time. Designations such as a Certified Divorce Financial Analyst (CDFA) are signs that mediators have knowledge of financial planning.
Who Should Consider Divorce Mediation?
Divorce mediation is an ideal path for many separating couples. Especially those who are willing to work together. This has the benefit of maintaining the size of marital assets to be split, rather than spending it on an expensive and time-consuming legal process
1. Couples willing to negotiate and compromise
This is an essential requirement for divorce mediation. A couple must be willing to sit down, negotiate and compromise for divorce mediation to work. Or else, a mediator will have nothing to work with. Both parties must come to the table and be willing to state their needs
It’s a collaborative process that examines the needs of both parties.
2. Couples with NO history of domestic violence, drug use or mental incompetence
Both parties must be mentally competent for divorce mediation to work. If either party is unable to vocalize their needs (i.e. because of fear of physical retribution) then a legal route is often the only way to make sure each party’s interests are truly represented and that each member is safe from physical harm.
3. Couples with children CAN consider divorce mediation
People often mistakenly believe that only courts can settle child custody issues. In fact, couples with children CAN use divorce mediation. Mediation is a great tool for couples to use in discussing and agreeing on child support and custody issues.
Mediation also allows the child to voice his or her views. And these preferences can also be taken into consideration. The end goal of mediation is to come to a peaceful resolution for all parties involved. And this peaceful resolution should involve children too if you have them.
Who should NOT use divorce mediation
There are special cases where divorce mediation is not appropriate. These include cases of:
- Domestic violence
- Mental illness
- History of substance abuse
- The parties want the mediator to make the decisions
- One of the parties is unable to express his or her own opinions
- Either party is ignoring the best interest of the children
What kind of mediator should you look for?
The US does not regulate the divorce mediation industry. This means divorce mediators come in a very wide range of ability. In general, however, the best mediators fall into three major categories:
1. Financial Experts
These types of mediators either have financial planning or accounting experience. Accountants are expected to know the current status of settlement agreements. Financial planners are expected to analyze the future projections. These types of mediators are best for couples who want to create an equitable split in assets.
Virtually all couples have one person earning more than another. That can make separation agreements difficult to negotiate. The higher-earner is often expected to pay spousal support to the lower-earner. But how much is considered fair? Financial-based divorce mediators act as a neutral third party to help couples explore these questions. Their job is to make sure couples come out with a resolution they both can agree on.
2. Legal Experts
These mediators generally include practicing attorneys who have a background in family or divorce law. Lawyers can be a good choice as a mediator if you have specialized legal issues, such as residency or pending legal cases against you or your spouse. Remember that as a mediator, the lawyer cannot represent you as an individual. They can only act as a neutral third party.
Also, remember that lawyers are usually not good with numbers. They will often have to hire external CPAs or financial analysts. This will add costs to the mediation process.
3. Social/Counseling Experts
The majority of mediators fall into this third category. Mental health professionals can be an excellent choice as a mediator for couples who aren’t 100% sure about moving forward with a divorce. These counselors can act as marriage counselors, and help couples examine the reasons they are separating. As social workers and counselors, these people also often have specific training for remaining neutral.
However, social and counseling experts are rarely experts in financial or legal matters. They will often ask you to hire outside advisors. This can add significant costs to a separation once things move forward.
How Does Mediation Work?
Each mediator has their own process, but practices tend to fall into two different categories:
1. Positional bargaining
Positional bargaining starts with the solution. One party will propose a solution for the other to review. The reviewing party will make a counter-offer. And then counter-offers are made until a resolution is found that works for both parties. Positional bargaining is an excellent option for people working with a financial-based mediation expert because each counter-offer can be immediately examined by the mediator. The mediator will then give his or her opinion on the financial ramifications of the proposition before either party decides to accept the offer or propose a counter-offer.
This method of bargaining is highly effective in coming to a solution. Often, fewer than 3 counter-offers have to be made before a peaceful resolution is found. Even when emotions are running high, a good mediator should be able to help couples find a solution that is fair for both sides.
2. Interest-based bargaining
Interest-based bargaining starts with educating the other party about their interests. Instead of saying “I must have this”, they say “I need this because…” Interest-based bargaining is only a solution for couples who are separating under the most amicable of situations. It requires deep understanding and compassion for the other party.
When done correctly, interest-based bargaining is a very powerful tool. Both parties will leave the mediation process with a deep understanding of the other party’s needs. This gives a greater chance of both parties following through with the final agreement.
Once the mediation process is complete, mediators would either
- Write a bulleted list for a lawyer to draft a separation agreement
- Write a comprehensive agreement known as a Memorandum of Understanding (MOU)
How to Choose A Mediator
Local listings and online searches are a great tool for finding a mediator. But when it comes time to choose a mediator, the most important thing is to examine their qualifications. Do they have what it takes to help you and your spouse come to a peaceful separation?
1. Professional Qualifications
Make sure the mediator has the right up-to-date qualifications. For financial experts, look for mediators with advanced designations such as the CFP, CFA, CPA or CDFA. These designations all have slightly different meanings, but they all show a level of knowledge obtained by the mediator towards financial expertise. For legal experts, look for mediators who are actively licensed lawyers. Paralegals can be cheaper alternatives, but only a lawyer can give legal advice.
2. Work Experience
Check to see whether the mediator has experience working with people from your background. Because the US does not regulate the mediation industry, you have to be sure you don’t end up with a fly-by-night mediator. Look for a mediator with specific work experience.
3. Personal Fit
A mediator must work closely with you and your spouse, so you need a mediator that “gets” your situation. The best way to identify fit is to schedule a consultation with the potential mediator and see if you feel you and your spouse feel you can work with them. Elements you should look for include
- Personable demeanor
- Ability to stay neutral
- An ability to convey complex financial matters on a level you’re comfortable with
Make sure you take the time to find a mediator that best fits your needs. Remember that different outcomes can mean the difference of thousands (or hundred-thousands) of dollars. Finding the right mediator can help smooth the process and make sure you and your spouse are coming to an agreement that both are happy with.