0189: How to Use Mediation to Resolve Your Divorce
Divorce and Your Money - #1 Divorce Podcast - A podcast by Shawn Leamon, MBA, CDFA
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Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help. Learn about coaching services here. Thank you for listening! Find a transcript of this episode below. In this episode I want to discuss mediation. It's a topic that I haven't talked about in a little while, and mediation is very important for many of you. You end up hearing your attorney talking about mediation, or you end up going for it, or you're preparing for mediation, or you've just heard about it and you want to know what it is, what it's like, and whether it's right for you. One thing I will toss out there is, mediation for many of you can be a very useful way to resolve many of the issues in your divorce. I want to go through a little bit about how it works, and why it exists, and provide some information in terms of whether mediation is something that you should consider during your divorce process. Now, the reason people pick mediation, or even consider this mediation process is, it's one of the tools, not the only tool. But, it's one of the tools, and one of the most common tools people have to avoid going to court. Anything you can do to avoid going to court, and avoid going to trial, is generally speaking beneficial for you. The goal is, in the divorce process. I mean, aside from getting out of this process as quickly, efficiently, and in a best position possible for you and your family. The goal of this process is not to end up in front of a judge. Now, for some of you, it's inevitable. I deal with a lot of cases, probably a higher percentage than most end up going in front of a judge just because the issues that you're dealing with are so contentious that, and you can't come to a satisfactory resolution. But, for those who can, you don't want ... You want to use, or at least consider mediation as one of your options. I've talked about judges and courts before on the podcast, and just the one thing I'll say about it is, imagine a stranger who knows nothing about you, making in just a few minutes, the decisions that'll affect you, your assets, your kids, your support, for the rest of your life. They determine that as just a stranger. They're in charge of making some pivotal, life decisions. They don't know you, they don't necessarily care about you. You're one of hundreds or thousands of people they have to decide upon each year, and they don't spend a lot of time with you, and they're not really getting to know you. Is that how you want your divorce to be decided? That's why people don't want to go to court, and mediation is a very useful process for some of you. Now, how does mediation work, what is it like? What is it? Well, mediation is basically the process where you, your spouse, and a neutral third party, usually a neutral attorney, or retired judge, or professional mediator. Helps you work through the issues in your divorce, and helps you come to a point where you can find middle ground, or some sort of reasonable compromise on the key things that you're thinking about, and trying to decide in your divorce. What do I mean? Well, there are several things that we could consider and think about. You have issues in your divorce. Some things might be very clear, right? I'll just use a very simple example I see all the time. You and your spouse both probably have separate cars. In most of the cases, nine times out of 10, it's not really a dispute over who gets what car. If you drive a truck, I don't know why I said truck, I don't. But, if you drive a truck and your spouse drives the Toyota, the Toyota Corolla car. Well, you probably will keep the truck, your spouse will probably keep the car, and we move on. Nine times out of 10, or probably 99 out of 100 times, that's not going to be a contentious issue. But, something that might be an issue is, how much of that retirement account are you really entitled to, or is your spouse really entitled to? What's the appropriate amount of support to consider? How much parenting time, and how should we work out some of the custody issues? Or, whatever other issue or consideration you may have on the table, mediation could be a way, a place, a format for you to resolve those issues. As I said, there is a neutral third person in the mediation. At a minimum level it's you, your spouse, and that neutral person talking it out. Perhaps in a conference room, or in someone's office, to figure out these discussions. But, alternatively, there are more ways to ... More formats to mediation. You could both have attorney's to help you during the mediation process. That would mean five people involved. You, your attorney, your spouse, your spouses attorney, and the mediator. Or, you could ... There's different options. Sometimes mediation takes place in the same room, where you book a half a day, a full day, several days, even a week to sit and negotiate the issues around the table. Now, for some of you, being in the same room with your spouse probably is not going to be the most productive way to reach a resolution, so they have options for mediation where you're in separate conference rooms. What happens is you and your attorney, or you by yourself, are in one conference room. Your spouse and your spouses attorney are in a separate, or in another conference room. During that process your spouse ... Or so, the mediator might come into your room first. The mediator will come in and say, "Hey, what do you care about, what do we need to work through?" Let's say you go through your top three issues. Your mediators say, "Hey, you know what? I think on this point number two, you're not being totally realistic. You need to have a little bit of leeway here. Can you give up something?" You'll listen, you'll say, "I don't know if I want to do that." The point being is you'll come up with some sort of resolution and move on. Then the mediator will say, "Okay, I'm going to go to your spouses room and let's see if we can bring these issues closer." The mediator will leave, go to your spouses room, and the spouse will ... Will say, "Hey, what's important to you? Can we work towards these kind of things?" Then the mediator will kind of go through and they'll say, "Oh, you know, you're doing well here. You might have to give up some more," whatever else. Then they might come back to your room. Or, if you're doing it all live or in the same room, whatever the case may be. Then, the other thing to think about too with the mediators is, so their goal is as a mediator, to get you to a resolution. That is the whole point of mediation. Sometimes even the court mandates that you have to go to mediation before going to trial. The goal is to resolve as much as you can, as soon as you can, without going to court. The mediator also, if you have a good mediator. As I said, they're often a retired judge, an attorney, or a professional mediator. Part of the things they will do aside from being very good negotiators, and helping you come to a resolution, is that they will also make sure that you're doing within the bounds, understanding what's in the bounds of the law. I've heard a mediator say, "Hey, that issue that you're thinking about." Be it, let's just say you're asking for a particular amount of support. The mediator might say, "Look, I've been a judge for the last 20 years, and now I'm a mediator. The courts in your county won't give you that much support, so you need to lower your expectations, and lower that amount. Let's go to something that's reasonable, within the bounds of the law." Or, that judge might say, or that mediator might say, "Hey, I don't think you're asking for enough here. I think it's reasonable for you to ask for more." Something like that. Just, the overall point of this is to say is, the mediator is there. They're not there to be your friend, they're not there to favor one spouse or the other. They are there just to help you negotiate, work through thorny issues, and get to a place that's often times much more productive than just your two attorney's, or just you and your spouse going at it from opposite angles. Their goal is to get you to that agreement. I hope that provides a good general overview of the mediation process. Some other things I want you to consider, is there are some benefits to mediation. One very clear benefit, is that you get to avoid court. I already discussed that. The second is that, it's a less expensive process in general. Now, what do I mean by that? Well, court by itself is all consuming on your part, your attorney's part, and everything else. That's already on top of the normal divorce process. It just adds an extra layer of very intense complication to everything. Mediation is, if you're preparing for court and you're paying your attorney, that's the times when I see legal bills go into the 50, 100, 150 $500,000 mark, even when you don't have that much in assets. I've seen some astronomical legal bills, and almost all the time it's because of court. The only other time is if your finances are really, really complicated. But, most of the time it is because you are going to trial. It is such a high stakes event for everyone involved, the legal bills are expensive. Now, mediation is a way to avoid that. Now, I'm not going to say that mediation is cheap. It is not. Mediation, a day of mediation can cost $3,000 a person often times, or more. That's on the low end. If I were called into the mediation and you wanted a day of my time, it would be several thousands dollars. It's not cheap. But, it is a way to break through, and often not only get through these issues faster, but also much cheaper than if you had gone through every issue back and forth with your attorney over months, and lots of letters, and lots of phone calls, and lots of arguments. Mediation can be very effective in that category. It's a very efficient way to come to a resolution. Then there's the third thing for mediation. Now, if you and your spouse are on reasonable terms, I strongly recommend mediation instead of fighting it out through your attorney's. Mediation can be a very inexpensive way for some of you to resolve just one or ... If you have just one or two issues, or that you're thinking about that you just kind of need to have a third person chime in. Or, if you and your spouse are just generally civil, and you think you can kind of work it out pretty reasonably. Then, mediation could be a very exceptional process for you, and a good way to resolve things without a third party interfering, and over complicating the process. Now, that's just a basic overview of mediation. If you get the quick start guide in the store, or work with me on the coaching calls, we have a lot of information about how do you prepare for a mediation? How do you think about negotiating? How do you really make sure that your wishes are clear, and you're coming up with some creative solutions? The nice thing about mediation is that you have a lot of options that you can, flexible options that you can work through and use. Mediation is an effective way to pursue some things you might not have thought about, that get you into the position that you always wanted all along, and everyone is as happy as they can be given that you're talking about divorce. I would encourage you to check out some of those episodes, and some of the ways to prepare. Also, for a lot of you, you call me and say, "Hey, I got mediation in a month." Or, "I've got mediation in a couple weeks." Or, "Mediation in three months down the line. How do we prepare for this, and how do we put some information together so that you walk into the room, the mediation room ..." 'Cause remember, this might be a half a day, a day, a week at the most for most of you. How do you really prepare for that, really get clear on your goals, the things you want, and acceptable bans? When I say bans I should say, acceptable proposals that will really work for you. Some other things to consider. Then the last thing I forgot to bring up is that, mediation isn't always a binding process. Sometimes it is, sometimes it is not. Often times you can, and most of the time you can go into a mediation voluntarily and you say, "Hey, we're going to work really hard to get to this agreement. But, if it does not happen, then we're not forced to sign anything that you don't want to sign." Often times it's very good, and I encourage most of you, even if you do come to a pretty good solution in the mediation room, to take a day, or two, or three just to think about it. Just from experience, going through mediation can produce a lot of adrenaline. You can feel very wired on mediation day. Often times there's emotions, there's a lot. There's just an extraordinary amount of feelings, and moving parts, and it can often feel overwhelming. I hate to use the word exhilarating, but almost in a way. There's a lot going on. Sometimes after that's over, you might need a night of sleep, or two, or three before you sign that final agreement, unless you're just getting everything that you want in the room. Mediation has a lot of dynamics to it, but I do and want you to, if you have the ability to, consider using it as a process as you consider your divorce. And, the options that might be best for you, whether you're still preparing for the process, in the middle of it, or are trying to work out some of the issues. Often times, mediation can be a great route to go.