File for Divorce or Mediate Before You Separate?

No one teaches you how to break up.  In love and war, emotions play high.  Often, a race to the courthouse to file for divorce can occur.  But, there is another way to break up that may not only be in the best interests of “the wallet,” but also in the best interests of any minor children involved.

Parties can file divorce on their own (or pro se), but more often than not, at least one spouse will retain an attorney.  The attorney’s retainer is rarely less than $5,000.00.  Not every couple has a spare $10,000.00 to spend on two attorneys – and the retainer is likely just the beginning. 

Sure, you’ve seen billboards that announce that attorneys will represent you for a few hundred dollars if the divorce is “uncontested.”  The second there is any dispute – holidays with the kids, the amount of child support, who gets the debt – it’s a contested divorce.  Simply put, it is the rarest of occasions that a couple’s divorce is uncontested, at least for the billboard attorney.

But, one way to set up an uncontested divorce is to mediate before (or during) separation – or at least before a petition for divorce is filed.  For about $1,000.00, a mediator can assist the couple with working out the details of their split – the debt, the assets, the children, the retirement, the house and furnishings, etc.  When couples have already gotten most, if not all, of these issues worked out on their own, they are well positioned to avoid a big legal battle that simply drains the pot of money that they are fighting over (okay, or usually are fighting over). 

Check out www.mediateB4Useparate.com for more information on mediation in the context of separation.  There is at least one other way to break-up, other than making a mad dash for the courthouse to file for divorce:  it’s Mediation.

Mediation Preparation in Divorce

The financial aspects of divorce have all of the charm of an IRS Audit. 

In a divorce, both the assets and the debts of each spouse must be inventoried.   Each item in that inventory must then be analyzed for reasons that it may not be subject to division between the parties (e.g., will it matter when the item was acquired, was a gift or an inheritance, etc.).  Then, what will be an equitable split of the assets and debts that are subject to legal division is the ultimate issue.

To get through these steps, spouses must do quite a bit of leg work to gather all of the relevant materials.  Tax returns (including businesses), bank and brokerage statements, bills of sale, as well as documents that reflect pension information, mortgages, car/boat loans, business loans must be gathered.  Additionally, other items of value have to be documented – jewelry, art, cars, major electronics.   

In a divorce, just like any audit, it simply is necessary to obtain all the financial records.  Many people have not kept their records in a manner that is ready-made for a divorce.  Indeed, financial problems directly contribute to the divorce rate.  It simply takes time to ensure that all assets and debts have been identified and documented, particularly when spouses never considered that having records for all of these things would be needed. 

Simply put, once separation or divorce is contemplated or initiated, spouses need to begin the process of reviewing not the health of their finances, but rather reviewing the health of their financial documentation.

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