One of the biggest worries both spouses have about the divorce is how it will affect them financially. Divorce mediation is one way to protect the finances. It puts the decision-making in the hands of the couple, not in the hands of the court.
How Mediation Protects Your Finances
In mediation, you are each asked to be transparent about your financial situations and share financial information and supporting documents that would enable the couple to make their decisions and come to a settlement. It’s the honor system, the mediator does not engage in discovery.
Some of the document one needs to share are:
- Tax returns.
- Income information and supporting documents such as paycheck stubs.
- Bank statements.
- Mortgage documents.
- Car loans.
- Student loan information.
- Credit card statements and monthly payment requirements.
- Information concerning retirement accounts.
When all the information is gathered, a financial expert, if needed, can be brought in to analyze your finances and help to make a plan going forward that will work for each of you.
Financial Decisions that Need to be Made
After all the information is gathered, there are decisions that need to be made. In mediation, the decisions are made with the assistance of the mediator who does not take sides. The mediator does not give legal advice, but guides couples with suggestions and options within the boundary of relevant family law. If the issues are complex, a financial neutral would be recommended. The financial professional can help you figure out the best way to divide assets that will benefit both of you.
For example, some specific decisions that need to be made include, but are not limited to:
- The best way to divide the assets and debts, taking into consideration any tax consequences that will affect either party.
- The best way to share in your respective retirement plans. This will likely take a special order known as a Domestic Relations Order (DRO) in addition to the order declaring the divorce final.
- Deciding whether either spouse needs spousal support. If so, the agreement will specify who needs the support, which party will pay it, and for how many years it will last.
- Deciding which parent will need to pay child support.
When a mediator helps the couple resolve the financial issues together, with the aid of a financial professional as needed, the couple can go forward with their new lives feeling like they made the best decisions regarding their finances.
Contact Kim Mediation and Law Center
At Kim Mediation and Law Center, our goal is to help you have a peaceful divorce. It is very much possible to mitigate disagreements over finances while going through a separation. Whether you choose mediation or a collaborative divorce, we are committed to helping you find your way. Call or contact us for a free case evaluation.