The Division of Assets and Debts During a Divorce - How Mediation Can Help You Divide These in a Way

Whether you have $10K or $10M in assets, thecards, medical bills, car loans, bank accounts, and
division of marital assets does not necessarilyinvestments. These are assets and debts that are
determine how much your divorce will cost you.subject to division prior to divorce. There are
The divorces we see on television, with highother assets that can only be divided after a
priced attorneys and high powered experts, dodivorce is finalized by a judge. Retirement benefits
not have to be the rule, but the exception.and sometimes pensions are such assets.
Divorce mediation offers a unique perspective onThe division of retirement benefits requires what
the dissolution of a marriage and the division ofis called a Qualified Domestic Relatives Order
marital assets. That perspective focuses on the(QDRO). This QDRO, signed by a judge, is the
bases of assets, not the quantity of the assets.document which instructs the administrator of
It is the mediator's job to assist their clients withyour retirement benefit as to how your benefits
an equitable agreement based on what theywill be divided and where the agreed upon amount
have, what they owe, and what their needs areor percentages are to be directed. A divorce is
for the future. Mediators are paid the same hourlythe only way that funds can be taken from
rate regardless of what your net worth is. Theirretirement benefits and transferred to another's
prices don't go up for wealthy clients, but they doretirement account (IRA) without penalties or
go down for those who need it.taxes. Depending on your individual administrator,
Most people will agree that the only people whoyou may have to fill out a simple form which is
win when divorcing people fight over money aresigned by a judge for the transfer. You can save
the lawyers and experts they hire to put on amoney by completing the form and submitting it
production for a judge. In Illinois alone, millions areto the judge yourself. Most importantly, once the
spent every year on unnecessary litigation, millionsjudge signs the QDRO it is up to you and your
that were earned by the clients and should rightlyspouse to see that this form reaches your
be theirs to divide. Choosing mediation canadministrator and is carried out.
eliminate these wasted dollars and put them toPensions, however, have their own special rules
use in securing both parties financial futures.and every company has specific regulations.
However, it is important to remember thatFrequently, pensions need to be "valuated"-a term
mediation is not right for everyone when itmeaning that a pension expert calculates the
comes to dividing assets and debts. When facedvalue of the pension for the years you were
with clients who don't care about money and willmarried, arrives at a total, then, based on the
spend everything they have to "win" or who onlyplan's regulations, informs you what the other
wishes to see their spouse financially ruined,spouse it entitled to. Most pensions have no value
mediation may not be the right choice. Sadly,until actual retirement occurs and payment cannot
emotions and attorneys seeking to assign a feebegin until that time.
as high as possible can turn an otherwise peacefulIn mediated divorces, it is often helpful for the
and easily agreeable clients into mortal enemies. Ifpension holder to keep 100% of the pension and
this happens to just one party to the divorce, agive their spouse assets equal to the value of the
mediated and cost-effective divorce is not likelypension. It is not a hard and fast rule that assets
to occur.must be split 50/50. What matters most is that
Taking the emotions out of a divorce, often withthe division is equitable.
the assistance of a therapist or coach, can makeEquitable distribution of assets is the final point I
even the most complicated financial aspects of awould like to make. In mediated divorces, this
divorce conducive to mediation."equitable distribution" of assets is sometimes the
Additionally, by mediating, you are exercisingkey to a peaceful and conflict free divorce. A
control over how your assets will be split and whocalm and orderly divorce allows each person the
will be involved in the process. By choosingfinancial ability to get on with their lives much
mediation, you can eliminate the need for timequicker than simply relying on a 50/50 division of
consuming litigation, battling financial experts, andmarital assets. Sometimes more creative solutions
spending much of your hard earned dollars onlike selling or refinancing the marital home and the
questionable procedures.distribution of those proceeds can avert future
Lastly, mediation is beneficial when it comes tofinancial complexities.
eliminating debts and making sure that debts withA skilled divorce mediator can help divorcing
both party's names on it are resolved. If bothcouples find the best way to navigate the murky
party's names on a debt such as a house, creditwaters of divorce. In the low stress atmosphere
card, or car loan, it will take both creative thinkingof mediation, finding the fairest solutions is a lot
and cooperation to work out a resolution.easier than doing it with lawyers, paralegals, and
Trying to eliminate marital assets and debts priorfinancial experts. I urge you to consider mediation
to the divorce is essential to insure a smoothif the circumstances arise-you can save a great
divorce. Some examples are: marital home selling,deal of money, headaches, and heartaches by
refinancing, or a buy one spouse out of theirconsulting a qualified and compassionate divorce
equity to remove one party from the title, creditmediator.