When a divorce or a separation takes place, a couple will have to take a good look at their finances. The income that used to support one household will now have to be divided into two, which in itself will place a strain on both parties. Both short-term and long-term financial arrangements will need to be made.
A high-quality mediator will put together a financial analysis that will encompass all of the assets and any debts owing. For some couples this will be a simple process and for others it can be quite complex. This financial analysis will also include any potential spousal support and/or child support.
As a neutral third person, a mediator can facilitate the examination of all aspects of the finances in order to help develop creative solution sets for fair division. It’s important to have an experienced mediator involved to handle the following tasks:
- Understanding a global view of a couple’s financial system
- Listing and clarifying all the debts and assets
- Examining the tax implications and getting the help of a tax professional if needed
- Understanding relevant laws both substantively and procedurally
- Exploring options for child and spousal support and how paid
- Helping with the division of the debts and assets and any equalization payments
- Ensuring that all resources are accurately represented for the court
When a couple is running a household it’s not uncommon for one partner to be in charge of the finances. In many cases one spouse will not know where the income has been going and the true value of the assets. The mediator will look deeply into the financial picture to collect, identify, and organize all of the financial information. He will also place a value on the debts and assets and differentiate between separate and marital property. A comparison will also be made between the income and expenses and budgets can then be prepared for the parties and for the court.
Understanding the Tax Issues
A divorce or separation comes with its own tax implications. When a couple understands the taxes involved an informed decision can be made. As well, investments will need to be studied to understand how their costs and features will affect the settlement. When there are a lot of investments involved it can be useful for the mediator to be involved in a dialogue with a tax specialist in order to clarify complicated tax ramifications. Having a neutral, third-party mediator can greatly facilitate this part of the mediation process.
Knowing the Financial Facts
Emotions can certainly run high during a divorce or separation and not knowing the true financial situation only adds to the problem. When everything is laid out in black-and-white and is easy for both parties to understand, it can help to defuse the financial stress that each one is feeling. While any divorce or separation is going to be difficult and painful, knowing the facts is the first step towards working things out and moving on.