Prior to 2008/09, separating or divorcing was always financially and emotionally difficult. We had lived beyond our means and dividing one household into two was difficult. Now with the economy the way it is, it feels nearly impossible to divide the household because supporting one household has gotten even tougher. Our investments have been shrinking and so has the equity in our homes. Emotions are flaring. Not to mention the huge cost of attorneys fees for separation and divorce.
The time for alternate means of obtaining a divorce or separation is even more crucial. Breaking up is surely hard to do, especially in these times of uncertainty. But there are solutions. Divorce Mediation and Collaborative Divorce is out there now and is proven to be successful. “Divorce mediation” allows for a less expensive means of separating, divorcing and allowing for both spouses to be able to start over peacefully. “Collaborative divorce” allows for a couple to be able to obtain a separation or divorce with the additional help of legal and financial professionals to guide couples in this time of financial uncertainty. Financial professionals can be assets in both Mediation and Collaborative Divorce if needed.
As it’s very nature, mediation, whether it’s done as pure mediation or collaboratively, offers some creative solutions to problems that have or will arise as a result of these unprecedented economic times. For instance, in a traditional litigated divorce, the approach to calculating child support or maintenance and property division would be based upon current levels of income and values and can only be later modified, if not agreed upon, by proving a significant change in circumstance, gross error or fraud. Because of the inflexible nature of litigation, a couple’s ability to rebuild financially after divorce can be severely hampered.
For example, take a couple with one self-employed spouse. Due to the economic downturn, their business has suffered tremendously but the parties would either be forced to use the present income or an average of three years income to determine support. On the one side the income would be so low that the non-wage earner is stuck with a support amount too low to cover expenses and on the other side the income may be severely inflated making it difficult for the self-employed spouse to meet his or her support obligations and keep the business afloat.
In either of the litigation alternatives, “mediation” or “collaboration”, flexibility and creativity is the key. With mediation or collaborative divorce the parties can agree on a figure to start with and then agree to adjust the amount of support paid at intervals through the economic times of recession and recovery. With collaboration, the process includes in most cases a Certified Divorce Financial Analyst (CDFA) or a Certified Financial Planner (CFP) on the team to assist in the calculations and generating options. With mediation, if the parties and the mediator find that one would be helpful, a CDFA or CFP can be called in. Both of these approaches help the couple to accomplish the separation or divorce they are seeking now, rather than waiting until the financial situation improves. The same types of creativity can be established with the division of property including the marital residence and retirement plans.
Now, during these times of economic stress, it is so important that parties use the right strategies and/or keep the right team of professionals who can help in making these sound decisions for them and their families which will not only have impact today but also the future. For more information visit us at www.divorcemediationonline.com or call at 631-465-2140 or 1-877-WE MEDIATE.