For Marital Law Attorneys and their Clients
There are so many financial and emotional aspects of divorce that have to be balanced that if parties aren’t careful, they can end up in a big mess. As a mediator, cases that settle most smoothly in mediation are those where the parties have done their due diligence and are realistic about a settlement. Following these ten tips will help you and your client ensure a more productive mediation to negotiate settlement.
- Identify the Marital Estate: During the course of the marriage, a couple accumulated assets and liabilities and it must be divided in the divorce. Until your client knows what the assets that are considered marital, you cannot address how to divide them. Separate property usually includes anything you owned before the marriage, any gifts given solely to one spouse, or inheritances. Anything acquired during the marriage is usually considered marital property. Look into the assets, how they were acquired, who maintained them. These include Business assets, intangible assets, investments, retirement assets, real estate assets. Personal belongings are important, but not worth spending thousands of dollars over property with more sentimental value than asset value. These are the ingredients of the marital pie.
- Inventory: Have your client collect all of the financial records. Ideally, he/she should have five years’ worth of documents, including tax returns, payroll stubs, benefits information, bank statements, investment accounts and property information. It would be wise for your client to make copies of everything and keep them outside of the house — either in a private safe deposit box or at the home of a trusted friend or family member. Having evidence of all of the financials will help speed up negotiations during the divorce, and it will safeguard them in case something goes missing. Once the financial records are gathered, you can begin an inventory of all of the assets.
- Assess the Client’s Current State of Affairs: In order to emerge from the divorce as fiscally unscathed as possible, your client needs to be fully aware of his/her current
financial situation. To paint the clearest picture, have your client obtain a copy of his/her credit report, paying close attention to any outstanding debts. If there is anything that does not add up, the client will want to ask a third party for assistance before he/she asks their spouse for full disclosure of records. Additionally, it is wise for your client to monitor his/her credit report throughout the divorce process to avoid any surprises later on.
- Review the Client’s Rights and Responsibilities: Is your client entitled to alimony or is your client likely to pay alimony? What will the division of assets and liabilities look like? While you handle the legal aspects of divorce, certified divorce financial analysts can help handle the financial ones. As a CDFA myself, I’m a bit biased, but I highly recommend making an appointment to speak with a financial divorce expert. A CDFA is trained to support through this exceptionally difficult time. Divorce is a legal transaction that has important financial implications for the future. As the divorce attorney, you are an expert in a state’s laws but not necessarily a financial expert.
- Refer Your Client to A Mental Health Professional: Even when children are not in the picture, a counselor or therapist can still be beneficial to your client. As an attorney, you can provide advice on divorce-related issues, but you are not a therapist. If the client needs to talk through the emotional aspects of the divorce or needs career counseling, save their money on additional attorney fees and be sure to refer the client to talk to the right professionals, such as a licensed therapist or vocational expert. When the client is in the middle of litigation and fighting for a fair settlement, it can be difficult to turn his/her focus outward and think about how to move on once the divorce is final. Counseling can help with the transition to the next stage of life and recover from the trauma of divorce.
- Identify and list the client’s WANTS vs NEEDS: Divorce is difficult and stressful. It is hard to think rationally. Objectively evaluate your client’s needs and the needs of the other party. This relates to all issues including child-related issues.
- Set Realistic Expectations: How much can your client to expect to keep of the pie. Create a realistic expectation. Decide on the course of settlement or litigation or the Process will decide you.
- Budget: It is no secret that divorces are costly. From the moment your client hires you, suggest that the client redraws his/her budget and determines how he/she will
accommodate not only the expenses associated with divorce but also for their new,
single life. In order to help preserve assets, it is likely that your client will have to adjust their lifestyle and cut out anything unnecessary. There’s no doubt that divorce can be a painful process, but by getting the finances in order, it can help protect your client from even greater hardship. And the client can focus on raising the children.
- Consider mediation before litigating: It is universally agreed that when possible, allowing parties to make their own decisions that impact their own financial outcome with the assistance of a mediator is much better than having a judge tell everybody what to do. The mediation process, because it is a negotiation, gives the parties a chance to seek a win-win resolution or to come up with alternative resolutions that benefit everyone involved. Litigation, while necessary in certain cases, is indeed a win-lose proposition. In effect, there can only be one “winner” or “loser” in a trial. A trial is an exercise of loss of control by the parties. A judge is making decisions for their future.
- Social Media: Advise your client to keep off of social media. Posts on social media can be used as evidence against your client. It can also be harmful to the other spouse and children involved.
Call Finger Lakes Mediation Services at 585-750-6530 to schedule an appointment.