Life Spans – Bridge Divorce Strategies Newsletter

Mediation Computation

Mediation Computation

Confession: I was looking up words that rhyme with “mediation” in my search for a title to this little article, in which I’m about to describe how I help divorcing women, and their attorneys, with the financial side of the process.

Some of the rhyming words I got were priceless. Sure, I could’ve called this “Mediation Tabulation.” But what about “Consternation”? “Aggravation”? “Subjugation”? “Constipation”?

But seriously. Since you’re probably aware that about 97 percent of Arizona divorces are settled outside the courtroom (sometimes, as you know, in the lobby), mediation is a big topic. It’s also a big part of my practice as a Certified Divorce Financial Analyst® professional.

So in this article, I’d like to tell you how I can help you, and your clients.

Informal mediation

While I do fewer of these than formal mediations, I’ll admit that I prefer this process. Its comparatively open-ended nature allows for less-pressured negotiations.

Example: I worked with a woman whose husband didn’t want to pay a dime in spousal maintenance. The woman wanted just $500 a month. Her attorney told her that she could probably get $1,000 a month if she went to court, but—you guessed it—all the costs would likely cut that in half.

Given the informal setting, I simply helped the woman by ghost-writing an email for her to send to her husband in between mediation sessions. It went something like this: “I know you don’t want to pay anything. My attorney says if we go to court, you’ll end up paying $1,000 a month. So how about we split the difference? That is, let’s avoid the courtroom, and settle on just $500 a month.”

The husband went for it. Everyone was happy.

Formal mediation

These are the bread-and-butter of my practice. As I’d hinted above, I’m not crazy about the structure of these things. As you know, it’s an exercise in “hurry up and wait” for most of the day… until the end of the day, when it becomes a fatigued, okay-I’ll-sign-anything deadline crunch. Not exactly optimal for your clients, or for you.

This is where I can help. You know the drill: You submit your proposal to the mediator, who disappears into the husband’s room, and you wait two hours for him or her to return with the counter-proposal. Or vice-versa. And when it arrives, the clock is ticking.

But think of this: Typically, that counter-offer will have two components: the legal, and the financial.

Can you say “divide and conquer”?

You work on the legal side. I work on the financial stuff at the exact same time. You’re not rushing as much. You get to concentrate on what you’re best at. You avoid the liability trap of dispensing anything that could be construed as financial or tax advice. And you’ve got a numbers nerd like me (remember, I’m a CPA) to tell your client things like “There’s a big capital loss carry forward on your tax return; we need to address that,” or “If you take what your soon-to-be-ex is proposing, you’ll be forced to rent for the rest of your life; you’ll never be a homeowner again.”

So I can, and do, help with the counter-counter. Using sophisticated financial-modeling software on my laptop, I can easily change different numbers to see how they shake out, instantly. And I can show this to you, and your client, graphically, so it’s easy to understand. (Imagine a sideways “V,” with its vertex on the left, showing the divergence in net worth, over time, between the husband and the wife.) So this lets you craft the best possible counter-proposal within the limited timeframe of a formal mediation.

Knowing that, why would you ever want to do one of these without me?