Entries Tagged as 'Divorce Mediation and Law'

The Supreme Court confirms…make sure you follow up after your divorce

In an earlier post,  I related a case (Kennedy vs. Plan Administrator) where a divorcing husband failed to change the beneficiary on his retirement plan.  His ex-wife was listed as the beneficiary despite the fact they had a divorce decree in which she was entitled to that money.  An appeals court upheld the payment to the ex-wife under the ERISA law (the law that regulates retirement plans).  Other cases in the federal courts had opined that the divorce decree could amount to a waiver of benefits, even without a  qualified domestic relations order (QDRO).

The case rose to the U.S. Supreme Court and yesterday they rendered an opinion in order to clear up the different rulings.  The Court said “the question remains whether the plan administrator was required to honor [the ex-wife's] waiver [in the divorce] with the consequence” that the benefits should have been paid to the estate.  “We hold that it was not, and that the plan administrator did its statutory ERISA duty by paying the benefits to [the ex-wife] in conformity with the plan documents.”   The court further stated, “[the ex-husband's] designation of [the ex-wife] as his beneficiary was made in the way required; [the ex-wife's] waive was not.”

The court, in a footnote to the opinion, added that the ex-husband’s estate could sue the ex-wife (actually, now her estate as she’s passed away as well) to obtain the money since the waiver agreement was contractual; this would not violate ERISA since the money in question would have already been paid out.

Again, the bottom line is make sure you’ve changed all of your beneficiaries during the divorce process.  The burden is on you.

Divorce During Tough Economic Times

One of the things I’ve begun to see in my divorce mediation practice is the difficulty of equitable distribution with martial homes that have little equity value, no value or even negative equity.  These are situations where the value of the mortgage(s) plus any home equity loans exceed the market (sale) value of the home.  So to sell the home pursuant to a divorce, the couple would need to potentially take a loss and then have no money coming from the sale for a downpayment on a new home.  In the “good old days” (2007 into early 2008), this wasn’t a problem as most people had equity in their homes.  Thankfully, I haven’t had any divorce clients who are facing foreclosure, but I am sure that will be coming.

There are ways to work around equity problem and mediation is often helpful in doing so.

Two recent articles have addressed the problems this has caused.  The first is an AP article about couples staying together because of the economic times.  One couple in the article is described as living in the same house, not speaking to each other except through their lawyers.

Despite the close quarters, the couple rarely cross paths. Linda Melville said they hadn’t spoken to each other for a month before meeting about their divorce in late November. “The only conversation that takes place is via the lawyers,” she said. “Even negotiating a day to do laundry.”

I’m not sure how they can afford lawyers to do the talking but can’t afford to live apart or sell the home.

The other article is the opposite happening in China.  Reuters reports:

Fears of a prolonged recession in China have triggered a sharp increase in divorce inquiries addressed to lawyers and financial advisers, state media reported on Monday, with timing a key issue.

Wealthy spouses were keen to strike a deal while asset values were low, the China Daily quoted the director of the China Divorce Service Center, Shu Xin, as saying.

Divorce has been on the rise in China, with 7 times the amount in 2007 as in 1980.

If you’re considering a divorce but do not think you can afford it, you may want to consider mediation.

Divorcing couples can save with mediation

Cynthia Fox, in the South Side Journal writes an excellent article about the benefits of mediation (excerpted):

One of the hardest things about divorce is its cost, not just emotionally and psychologically, but in cold hard cash.

A typical scenario is a husband, wife and two attorneys. Add the expense of outside experts if there are disputes over who can better parent their children or the valuation of an asset such as a business that one or both owns, and the bottom line is fees well into five figures for each party.

However, in my experience, anger and contentiousness drives up the cost more than any other factor. More anger equals more destruction, cutting deeply into the wealth and well-being of both parties. Deeply hurt litigants file too many motions, push issues beyond reason, are unable to compromise and often are so damaged that they emote endlessly in the lawyer’s office. The result: very large legal bills that anger them even more.All of this has led me to develop a new approach that I describe as the ConstructiveDivorce, which attempts to reduce the emotional and financial costs of divorce and help my clients prepare for and get onto the next stage of their life. Helping people resolve their conflicts more constructively is also why I trained to become a certified mediator.

Any couple heading for divorce can go to mediation, even if they have already hired attorneys and started down the more adversarial path. In mediation, the wife and husband meet together with the mediator, and with his/her assistance, prepare the final settlement agreement that the Family Court requires in order to grant them a divorce.

This agreement typically deals with the division of the property, parenting plans for the children, assigning custody and visitation rights, as well as addressing child support or spousal maintenance needs. Understandably, resolving these questions can be stressful and difficult, particularly for estranged couples.

The mediator is a like a “tour director,” identifying all the stops along the way, providing knowledge and insights, while making sure each person gets what they need with a minimum of friction.

And, while no one would say getting a divorce is like taking a vacation, in the hands of a skillful mediator, the excursion can be both liberating and empowering. That’s because each party is encouraged to be totally open about what they feel, believe and expect about the end of their marriage with the mediator there to support and buffer them. The mediator’s job is not to allow the strain of these painful topics keep the parties from getting to the finish line.

I believe couples that mediate the end of their marriage “own” their divorce in ways that provide a clean break with the past and allow them to get on with their lives. They also save a boatload of money.

In most situations, no attorneys are needed until the settlement agreement is completed, and then one or both parties will usually retain a lawyer to take the agreement to the court for its approval.

Wall Street Journal Article on Divorce

The Wall Street Journal recently had an article discussing divorce.  While most of the focus of the article is on collaborative divorce and the impact of divorce on children, mediation does get a couple of positive mentions.

On children:

Constance Ahrons’s 20-year look at 173 children from 98 divorced families showed that when divorced parents were able to maintain a civil and at least minimally cooperative relationship with each other, the children experienced no long-term problems associated with the divorce. But when parents remained in conflict or totally disengaged from each other, their children continued to be distressed even 20 years later.

The article also mentions that there is ample evidence that we can increase the incidence of “good” divorces. In a 12-year follow-up of couples randomly assigned to either mediation or litigated divorce, Robert Emery and his colleagues found that as little as five to six hours of mediation had powerful long-term effects. Parents who took part in mediation settled their disputes in half the time of parents who used litigation, and they were much more likely, even 12 years later, to jointly discuss children’s discipline, moral training, school performance and vacation plans. Nonresidential parents with mediated divorces maintained much more contact with their children than those who had litigated.

The average cost of a mediated divorce is less than $7,000 and of a collaborative divorce less than $20,000. This compares with nearly $27,000 for a divorce negotiated by rival lawyers and about $78,000 for a fully litigated divorce.

And it’s not just the financial toll. When a parent maximizes his or her emotional position by undermining a child’s respect for the other parent, this “victory” carries long-term costs. Researcher Paul Amato notes that children who report being put in the middle of their parents’ problems are less likely to be close to either parent as they age.

Can You Arbitrate Custody and Visitation?

The NJ Appellate Division decided this matter in an opinion published today.  Arbitration is an alternative (or complementary) dispute resolution method.  In a nutshell, instead of a court acting as the judge in a dispute, a private neutral acts as such.  The main advantage is that the rules are more relaxed than the court’s, which should lead to an expedited process.  The main disadvantage is that the decision has very narrow grounds to appeal (basically, arbitrator misconduct).

In the case of Fawzy v. Fawzy (A-5337-06T1), the court looked at whether parties in a matrimonial action can agree to binding, non-appealable arbitration of child custody and parenting time issues. The court concluded that such an agreement violates the court’s “parens patriae” (responsibility of the government to protect individuals in need) obligation to protect the best interests of the children and is void as a matter of law.  That (parens patriae) role requires the trial court to determine the best interests of
the children regardless of any agreement as to custody and parenting time (which could also include agreements negotiated in mediation or by attorneys).

The court did go on to say that as the courts gain experience in the arbitration of child support and custody
disputes, it may become evident that a child’s best interests are as well protected by an arbitrator as by a judge.

The appellate court remanded the case back to the family part in Middlesex County for a plenary hearing.

More divorce resources

If you’re divorcing or contemplating it, John Spiegel, a divorce mediator in Maryland, has a number of excellent videos explaining what divorce mediation is as dealing with the children in a divorce (and other items).  His videos can be found here.

Dealing With Divorce…A Divorce Resource

If you’re divorcing or contemplating one, you may find this video helpful.  In it, a divorced father, a divorced mother, a therapist and my mediation colleague, Anju Jessani discuss divorce and its effects, particularly dealing with children.

If you want more information about divorce mediation, please feel free to contact me at 732-963-2299 or use the contact form.

Another reason to mediate your divorce, part 2

I’ve talked many times before about one primary reason to mediate your divorce, namely privacy and keeping your personal affairs out of the public domain. Shaunie and basketball great Shaquille O’Neal are going through a divorce in Florida. Because it’s contested, declarations have to be made to the court (and almost all court records are public). So, what does Shaq, a man who makes $1.8 million per MONTH spend? $875,000 per MONTH (we can all dream, right?).  Here’s an excerpt from the National Post:

The list rhymes off $110,505 on monthly vacations, $60,417 on gifts, $17,220 on clothes, $26,550 on child care and a whopping $24,300 on gasoline among other things. His mortgages run him $156,116 a month.

The figure that may be most shocking however, is the $12,775 the former Mr. Big candy bar spokesman spends on food every month.

O’Neal filed for divorce in September, ending his five-year marriage to Shaunie O’Neal. The two have four children, and each partner has a child from a previous relationship.

If you’re contemplating a divorce (or going through one), consider mediation. If you’re in New Jersey, contact me at 732-963-2299 to find out more info.

Costs of Divorce

As I mentioned in my previous post about collaborative divorce, the Boston Law Collaborative performed a study of 199 of their recent divorce cases. Mediation was by far the least expensive option, with a median cost of $6,600, compared to $19,723 for a collaborative divorce, $26,830 for settlements negotiated by rival lawyers, and $77,746 for full-scale litigation. Obviously, the cost of any single divorce is dependent on the specific circumstances and complexity of that divorce. But this gives a good approximation of the relative costs between the various divorce processes.

If you should have any questions about divorce or mediation, please feel free to contact me at 732-963-2299 or through the contact page at my website.

What is Collaborative Divorce?

Collaborative Divorce is a newer process for obtaining a divorce, which is a middle ground between mediation and litigation.  In collaborative divorce, the parties and the attorneys agree to make the outcome fair to all.  The collaborative attorneys perform most if not all of the negotiations.

The one main twist that seperates this from a litigated divorce is that the lawyers agree in advance that if the parties want to litigate the divorce (in the case they cannot come to an agreement), these attorneys will step aside and the process must start over again with new attorneys — with all the costs inherent in that.  That’s the “incentive” to reach an agreement.

What are the benefits and disadvantages of this divorce process?  It is less costly than a litigated divorce, but more expensive than a mediated divorce.  It should have less emotional strains than a litigated divorce since it is supposed to be a non-adversarial process.  It may not provide for the catharsis that a mediated divorce can provide.  The end divorce is the same as one would get in any of the processes.

Why would someone want to use collaborative divorce over a mediated one? There are two primary reasons. First, if a spouse is uncomfortable sitting in the same room as their soon to be ex. Second, there are many people who do not like to negotiate. These people would benefit from collaborative divorce since the attorneys are doing the direct negotiations (at a higher expense, though).

The AP published a nice article about divorce last month, which you can read in depth here. I will be focusing on the costs study referenced in the article in my next posting.