By Patricia Barrett, CFP CDFA Mediator
All divorcing couples must come up with a financial plan for their futures when facing Divorce in Texas or elsewhere. In the simplest form, they can do it themselves if little or no assets are involved. If complex, like calculating child support, division of property, tax ramifications, or cash flow for the coming 20 years, using a mediator with financial planning expertise can create a superior outcome.
Generally, the more work a couple has done on the emotional divorce, the easier the remaining work will be. However, even the most intelligent and well-prepared couples can hit a snag. Do you hire lawyers and become involved in the court system? If so, you can expect many thousands of dollars in attorney fees and will have little control over the outcome.
You can choose to mediate instead. The two of you choose a neutral third party to help you make important decisions about the house, bank accounts, pensions and children. The mediator’s job is to enable you to make informed decisions. A mediator has skills in helping you to express your goals and needs. Achieving an agreement through mediation will be honored much more willingly than if a court is handing down orders.
Once you have made your decisions, the mediator will create a Mediated Settlement Agreement. This can be either binding or non-binding, meaning irrevocable or revocable. Some folks want an attorney to review the agreement before moving forward. Others fear the attorneys will stir things up.
To summarize the advantages of Mediation:
a) Mediation is voluntary. You can stop the process at any time.
b) You remain in control of the decisions, not a lawyer or judge. You decide on the issues and how to resolve them. You decide when to meet and for how long.
c) Mediation is totally confidential. Court rooms are open to the public.
d) You can be more creative in mediation, rather than making your situation fit into the laws. This applies to parenting plans, division of financial assets and calculating support payments (if any).
e) Mediation is cost-effective. A typical legal bill is between $40,000 and $80,000. A mediated divorce will cost between $1,000 and $10,000, depending on complexity.
f) You only sign the mediated agreement if you feel it is a fair and equitable outcome. Lawyers are not orchestrating the terms of your agreement.