If you are a high-asset couple facing divorce, you have probably received a lot of advice from well-meaning people. Many people who have been through a divorce trial will advise others to settle through mediation. After all, compromising on half of everything is better than risking everything. Whether your divorce will finalize in New Jersey or a Pennsylvania county, the courts will expect parties to do everything possible to stay out of litigation. Let's review some circumstances when mediation may not be a better solution than litigation:
Mediation isn't always best, but it often is the more expedient path
Advisor J.B. Maverick, of Investopedia.com, recommends that most divorcing spouses pursue a negotiated settlement through mediation. The hard fact is that fighting to be awarded specific marital assets may seem worthwhile in the short term but often are not worth the high cost of keeping them. In the first place, says Maverick, "The fees an attorney is paid are higher if a speedy resolution is not reached, and if conflicts are drawn out and require a greater number of court appearances. The process of litigation often slowly whittles down the hard-earned estate that started the entire process." In the event of complex business ownership and exotic investment schemes, hearings, affidavits, investigations and court costs are likely to significantly impact the bottom-line value of the asset.
But even if you determine that certain assets are worth the cost of the fight, you can't overlook the fact that you are now giving up control of the final outcome. Going to court doesn't necessarily guarantee justice. But it will guarantee a decision. Unless you know you have every fact lined up on your side to win a slam-dunk decision, taking a risk on litigation means being willing to give it all up if things don't go your way.
Cynically and unfairly, we believe, Mr. Maverick goes on to say that lawyers have a built-in conflict of interest for pushing a wealthy or celebrity client toward trial, "Litigation can become a long and arduous process that negatively affects all involved - except for the attorneys." Taking a case to litigation means it will be in the public spotlight, which may mean less incentive for some attorneys and their clients to find a quick resolution. The reasons for considering mediation include:
- Confidentiality: For individuals with a reputation to maintain, mediation will be handled discreetly and the only facts that come out in the open will be the information offered to the public by either spouse.
- Control: Mediation sessions are designed to present opportunities for both parties to discuss the pros and cons of a proposed settlement with their respective attorneys. Both parties will have the opportunity to make counter proposals, either with regards to splitting up a specific asset or trading one whole asset type for another. In the end, the mediator will review the proposed settlement with an eye toward whether a judge will sign off (adjudicate) the final agreement.
- Cost: The cost of mediation can be substantially lower than the hourly cost of attorneys and court fees necessary to litigate. Even deep disputes over complex assets can generally be worked out in a few sessions with attorneys and mediators present. Resolving a dispute is often a case of a neutral party shedding light on the blind spots.
The reality is that most people -- even high-asset couples -- will benefit by pursuing a settlement through mediation, led by an experienced mediator. If you are considering pursuing a mediator, please contact our office.