When it comes to separation, some couples seemingly handle even the most difficult issues with ease and calm. Others, not so much. Some find it difficult to agree on anything — especially on how to divide property and assets. If that is the case for you and your partner, property settlement mediation can help. But to make the most of this opportunity, you must be prepared. In this article, we’ll share some tips to help you get ready.
Is it really necessary?
Before you do all of the legwork associated with a property settlement mediation, you have to decide whether it is necessary. This may be an option for you if these tick the following boxes:
- You have made extra payments on your home loan that either of you can access through redraw.
- There are sole and joint assets.
- You both want to have some control over the matter.
- You are not on good terms or able to communicate effectively.
The third point is one worth addressing in greater depth here. If you simply decide to go to court, you relinquish any control you otherwise have over the outcome. It will be up to a family law judge to decide how your property is divided. And he or she will make that decision based on the law, rather than what you want.
Making required disclosures for your property settlement
Once you have decided to pursue property settlement mediation, it is time to start gathering relevant financial documents. These typically include bank statements, mortgage papers, stock certificates, superannuation records, and so on. At this point, you should also gather any documents on solely or jointly held debt.
When you have the paperwork sorted, you must fully disclose the information to your spouse or partner. He or she must do the same with his or her financial records.
Believe it or not, that’s the easy part — especially if you are organized, to begin with. Most people find the next bit — namely valuing the assets and liabilities — much harder. While it is easy to feel overwhelmed and anxious at this stage, consulting a qualified financial professional will help. If you have already enlisted a mediator, he or she can point you in the right direction.
Evaluating the past and looking to the future
The next step is a detailed — almost forensic — evaluation of your financial history as individuals and as a couple. You will discuss who brought which assets and liabilities to the partnership; who acquired which assets and liabilities during the partnership or marriage; and how they were held.
Did you have individual or joint bank accounts during the marriage/partnership? Was there a separate account for household expenses? What about credit cards and credit card debt? What about your car(s) and car payments? Did one person pay the rent or mortgage? Did you have a secondary/vacation home? If so, who paid that mortgage?
Ultimately, the answers to all of these questions will help the two of you (and a mediator) decide “who gets what.”
But there is one more piece to the puzzle. That is using the personal/financial history to predict future financial needs. Did one or both of you work? If you both did, was there a significant difference in salary? Do both of you hold degrees from university? If you have children, who will have primary custody?
The answers to these questions will also help a mediator frame pertinent discussions to help you reach a consensus.
Establishing realistic parameters for property settlement
When it comes to a mediated property settlement it’s important to differentiate between what you want, what you agree to, and what is realistic.
This is because a court must approve any property settlement agreement reached through mediation. To do so, the court will weigh it against established standards for determining “fairness.” If the court finds that the agreement reached through mediation is not fair, it will not approve the agreement and the whole court proceedings will cost you a fortune.
A family lawyer can help you understand the standards the court uses so you can approach the mediation process accordingly.
At this point, each of you should be ready for property settlement mediation. As long as you approach it with an open mind, you will likely find it is far better than going to court. Among other things, it allows you to approach issues in dispute from a conciliatory rather than an adversarial standpoint.
Even if you are not on good terms, the mediators can help each person recognize the other person’s concerns. If necessary, he or she can then help you think about creative solutions to help you reach a consensus.
As long as the agreement you reach is within acceptable parameters, the court will approve it. It will then become a legally enforceable order by which you must both abide.
If this is an option you are considering, we are happy to answer any questions or address any concerns you may have. It’s up to you to take the first step. Contact us to schedule an appointment today.