Paycheck Chronicles

Divorcing? Use Mediation to Minimize Drama (and Expense!)

Last week's Military, Divorce and Money post resulted in some very interesting comments.  One thing that struck me about the comments is that while the commenters all talked about lawyers or judges, not a single commenter mentioned using a mediator to come to their property settlement agreement.  I don't know if this is because divorcing couples don't know about mediators, or they don't know why they would benefit from mediation.  It's a shame, because mediation is a fantastic tool to help parties come to an amicable resolution that will work for all parties, and it is a lot cheaper than lawyers or a court battle.

What Is Mediation?

In short, mediation is a way of resolving disputes between two parties.  The mediator helps the parties to negotiate a settlement by acting as a neutral third-party who helps keep the discussion focused and solution-oriented.  Mediators use various techniques to encourage the give-and-take with the goal of finding a mutually satisfactory solution.  In general, mediation has a structure and timetable that helps it progress more quickly than open-ended negotiations.  The process is private and confidential.   Participation is typically voluntary.

Why Should You Use Mediation For Your Divorce?

The main reason I like mediation is because the goal is to come to an agreement that satisfies both parties.  The number one complain I hear about divorce settlements is that one party is unhappy with how the property settlement agreement was structured.  This happens either because one lawyer is doing a better job than the other lawyer, or because the case went to court and a judge got to decide.  Mediation means that it is the two involved parties making the decisions - the interested parties are actually retaining control of the decisions.

Mediation is typically much less expensive than lawyer- or court-settled solutions.  While mediators aren't necessarily cheaper than lawyers, the mediation process is designed to be time-efficient.  John Rampton used a mediator for his property settlement agreement.  When I asked him about it, he said that the "whole process took around 4 hours."

Mediators often specialize in a particular field, such as divorce.  As a result, an experienced mediator can often see solutions that the parties can't see.  They are able to provide useful facts, such as state law, while also helping to remove the emotional aspects from the process.  Mediators are trained to help the parties come to a resolution, even when they start from very different places.  Rampton says, "When we first started the other side was VERY unreasonable in what they offered but the mediator explained things and what was fair to both parties."

Mediated agreements have a significantly higher level of compliance, meaning that the parties actually do the things that they say they are going to do in the settlement agreement.  Higher compliance means fewer problems in the future.

As a bonus, mediation is often more convenient that working with a lawyer or going to court.  Many mediators handle the whole process via email or use tools such as Skype to work with clients without having to meet in person.

The Do-It-Yourself Option

Even less expensive than a mediator is the do-it-yourself settlement agreement, or a "kitchen table divorce."  This does not have to mean that it is a do-it-yourself divorce; it works equally well if the two parties are able to come to their lawyers with an agreed-to settlement agreement.  This has many of the benefits of a mediated agreement IF the two parties have an equal amount of power in the situation and if they are able to work together rationally.

Fellow finance writer Miranda Marquit is currently working through a kitchen table divorce.  She told me, "Rather than getting a mediator to handle it, or battling it out with lawyers, we talked about how to divide everything up. We essentially sat down together, looked at what was available, and talked about where everything should end up."

"The process was straightforward because we discussed it all, felt good about the division. Our goals are to take care of our son the best possible way through this, and to ensure that both of us have a shot at a good future going forward. It's inexpensive because we decided what we wanted to do, divided everything up, and separated our finances."

If you are divorcing, absolutely look to mediation as the first choice in working out a property separation agreement.  You may save yourself time and money, and come out with a settlement that both parties can live with.

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