High Asset Divorce: Why Mediation is better

Mediation is increasingly the divorce process of choice for those with high assets and little appetite for public exposure of those assets. Consider Tom Cruise and Katie Holmes, or Tiger Woods and Elin Nordegren. Don’t recall the details of their divorces, do you? That’s because both couples chose mediation to keep their private lives private and their financial details out of the public record.

They also saved themselves tens of thousands of dollars in lawyer’s fees they would have paid if they litigated in court. The contract mediation clients negotiate with each other is completely voluntary, completely negotiated between themselves (with a mediator present) – and completely shielded from public records. In Bucks County, as in all counties in Pennsylvania, a settlement agreement will be referred to in the public divorce decree, but the details are not part of public record.

Celebrities and the very rich – according to Forbes magazine, there were 10 billionaires in Pennsylvania in 2016 – are not the only people anxious to keep their private life private. In the decades prior to the recession, more Americans had access to education and higher paying work than ever before. The majority have worked hard to build up their capital, paying off mortgages month by month, contributing to retirement or college savings accounts little by little, and generally accumulating what wealth they have by risk, persistence and hard work.

No wonder, then, that those with assets of over $1 million dollars are looking for ways to control the disposition of assets in divorce and keep the decision making in their own hands.

Mediation is a process whereby the two divorcing parties hire together one mediator to guide them through the conversations they need to have to determine what they consider a settlement fair to themselves. A mediator may also be a lawyer, but when they are serving in mediation, they cannot impart legal advice.

I emphasize here the phrase: fair to themselves. While Pennsylvania divorce law does not allow the main earner in the family to abandon the other without financial consideration, it may not take into consideration certain subtleties that the parties acknowledge to each other.

For instance, if one party spent considerable time caregiving for the other’s family members, such as an elderly mother or if there was a special needs child who needed exceptional caregiving.

Another key advantage of Mediation is that it helps the parties solve problems together, instead of turning them into combatants. Most couples can see the advantage of discussing things like custody, support and asset division with each other, even if they disagree. Some even choose to utilize, jointly, a trained divorce financial specialist and/or divorce counselor before or during the mediation process, so time in mediation is spent more efficiently.

Mediation is also good for couples who own a business. No one wants to disband or dissolve a business they spent years building or that is quite possibly supporting the family. Divorce is an emotional process, but most adults can see the disadvantage of eliminating a primary future income source from the equation. And yet, dividing business assets, particularly if one spouse owned the business prior to the marriage, often requires more sensitive accounting.

I’ve mentioned Mediation as an alternative that keeps decision-making in the parties’ hands, keeps details private, saves legal fees and allows for more creative or sensitive distributions than divorce law allows. Mediation is also typically much faster than litigation, as even complex estates can be discussed and resolved within 2 to 3 mediation sessions.

If children are involved, most parents try to put their children’s welfare first, both emotional and financial. Modelling a mature, thoughtful process to solve the couple’s disputes is an awesome way to signal to children that they matter, that their parents – though apart – will always work together for their kids. Successful mediation can set a positive tone for post-divorce parenting.

Mediation reaffirms, upfront, the worth of each party. This in turn sets the tone for the tough negotiations ahead while minimizing the emotional damage already present in divorce situations. For a free first consult to discuss mediation, please call my office at 215-345-5259.

-Elissa C. Goldberg, Esquire