Helping Hands Document and Mediation Services  

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How Do We Get “There” Together?

In  the “Financial-Emotional roller coster of divorce you need to consider how the emotional aspect of our nature can often rule our responses to the many situations that either we bring to life or that life brings to us. One of the biggest, our financial situation, is frequently ruled by emotions.

When couples are considering a separation, one of the most challenging and important areas to be explored is how to allocate the available resources (money) so that both parties and the family have enough to live on. This can be a great source of emotional anxiety as the partners may feel that their safety and security is about to be threatened. When this happens, logic takes a back seat, feelings overwhelm and the fight or flight instinct kicks in.

One of the great benefits of mediation is that the process itself allows the couple to take a step back and look at the whole picture together. We put a little air around us as everyone’s needs are considered and addressed. We look at things from several points of view:

• How have you run the family finances in the past?
• What are the current needs?
• How do we accommodate those needs once the household is split?

The thing to keep in mind is that we earn what we earn, and unless there is another avenue of funds coming in, we live on what we take home in our paychecks, making ends meet as best we can. This is what we do when we are married and it will not change when we are separated. Although the parties may value things differently (which may be one of the reasons the relationship is no longer working), they must take into account each other’s financial contributions in order to figure out the best way to allocate those monies for the sake of the whole, meaning the entire family.

If money was tight before, it’s certainly going to be tight when you separate. The rule of thumb is that when you split households you are going to live on 30% less than what was available before. Think about it – at the very least, there will be two mortgage/rental payments, two sets of utility payments, not to mention higher car insurance rates and cell phone plans (when you unbundle the family plan) and so on. All of these things need to be taken into consideration.

In my mediation process, I include a budget session early on. I give my clients a very detailed “post separation” budget form and ask them to take it home and consider every line item on the form and account for it in some way. In living our lives day to day, you would be surprised how many expenses, we forget about. As things come up, we just shell out the money and don’t give much thought to, among other things:

• Extracurricular activities
• Haircuts
• Take-out food
• Hobby expenses
• Birthday gifts for the children’s friends
• Lunch money
• Weekend vacations, etc.

And it all adds up.

When I work with couples for whom money is already stretched, they are usually more prepared for the financial picture that emerges when we look at post separation budgets. However there are many who come to mediation with what I call a “sorta, kinda” idea of what their expenses are. Once we start crunching the numbers, the true picture comes to light. In today’s economy, even households with two incomes are not a guarantee that there will be enough to support a standard of living that partners are used to or feel they need/deserve/are entitled to, etc.

Together, we look at the post separation budgets and if necessary, separate the essentials from the non-essentials. Then we account for each spouse’s income, incorporate the child support calculations, maintenance (if appropriate) and begin exploring the various options to accommodate everyone’s needs going forward.

The reality is that things are going to change and working together, with the guidance of a mediator, to make the best of those changes is the way to go. By brainstorming ideas, teasing out the options, and thinking out of the box (you would be surprised at some of the amazing solutions people come up with) the likelihood that the parties will be able to live with, and within their agreements is much higher.

The Moral of the Story " No Surprise” Ending

We all know the story or some version of it: A couple decides to separate, they hire attorneys, end up in court and everyone loses one way or the other. It’s an adversarial process by its very nature, takes a great deal of time and keeps the parties at odds with each other which only pro-longs the process and increases the costs even more!

A few years ago I worked with a couple in a challenging mediation where the Husband  felt as the sessions progressed, that he should be “entitled” to more. Despite these feelings, he was willing to negotiate and did a very good job protecting his interests. They completed the mediation and in the end, given their resources, they worked out a pretty fair and equitable settlement – or so it seemed to me.

In my process, I email a copy of the agreement for you to read through the draft of the Agreement and if changes need to be made set a new session and discuss any changes they wish to make. After that a revised draft is prepared and if the parties wish, they can take it to an attorney to review it for them. This couple agreed to have it reviewed by their respective attorneys.

I received a call from the Wife a few weeks after the review session telling me that she thought that he wanted to start all over and “take her chances in court.” I called him and left a message but he never returned my call. I took this as a sign that he indeed did intend to follow through on his threat to find “justice” in the court system.

And so he did. I received the following email from the Wife a few weeks ago .

" Wanted to let you know that my husband  and I finally reached a settlement at trial! It has been over two years in the making. After two years of legal bills that must be over $30,000  each and  the settlement amounted to what we had discussed in your mediation sessions and in the mediation agreement. Nothing more, nothing less. It’s amazing – what a waste of emotions, time and money.I believe that I was well represented by my attorney but it should never have come to the emotional or financial cost – ever!  What a waste of time, money and energy indeed! Not to mention the emotional cost. "

 Such a terrible drain on whatever resources they had and now …. enemies for sure.

The moral to the story? What may seem equitable and fair to you might not be how the courts see it. You can take your chances (and they are chances) in the court system. But wouldn’t it be better to work it out together so you keep whatever financial resources you have between yourselves without wasting it on a legal system which cannot guarantee to give you what you deem as fair? And this is not even factoring in maintaining your dignity and emotional well being, which has as much value as any monetary settlement.