How to Get the Best Divorce Settlement with Mediation
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How to Get the Best Divorce Settlement with Mediation

The following are financial mistakes to avoid as regards in negotiating your divorce settlement.

Becoming a Financial Victim

One of the worst mistakes divorcing couples might make is having blinders on concerning finances. When your spouse has regularly managed every aspect of the financial decisions in your household and you do not have any knowledge about you and your spouse’s income and assets, your spouse is going to have an unjust edge over you when it’s time to resolve the financial matters in the divorce.

When you think your spouse is planning for a divorce, gather as much information as possible now. Make copies of vital financial records like account statements (such as savings, brokerage, and retirement) and any other data that is associated to your marital way of life (such as checking accounts, credit card statements, tax returns).

If you think your spouse might liquidate (sell or transference to cash) assets or retitling marital assets without your approval, give notice to the possessor of the asset and/or property in writing and acquire a restraining order from a court of law. Be wary of any cash kept in joint checking accounts and brokerage accounts, and the cash worth of any life insurance policies. When they use or transfer assets without you knowing, you might have to procure a legal and forensic accounting professional to assist you in locating and valuing the assets.

Not Taking Divorce Mediation into Consideration

If you both can work with one another to come to an impartial settlement on most and/or all of the matters in your divorce (for example child custody, child support, spousal maintenance, and property separation), deciding on mediation to settle your divorce case may save thousands o in legal costs and emotional irritation. The mediation method involves an unbiased 3rd party mediator (a knowledgeable family law lawyer experienced in mediation) that has a meeting with the divorcing couple and helps them come to an agreement on the matters in their case. Mediation is entirely voluntary; the mediator is not going to act as a judge, or demand on any specific result or agreement.

Mediation also provides divorcing couples plenty of adaptability, in terms of making decisions their own concerning what will work ideally for their family, in comparison to the conventional oppositional legal process, that involves a trial in which a judge will make all the determinations.

Mediation, nevertheless, is not suited for all couples. For instance, when one spouse is concealing assets or income, and declines to tell the truth, you might have to go to court in which a judge could order your spouse to conform. Or, if one spouse is reluctant to negotiate, mediation most likely won’t work.

Hiring an Aggressive Lawyer to Chastise Your Spouse

This is a very terrible idea for 2 reasons. First, except in extremely heinous cases, a lot of courts are not going to punish your soon to be ex financially for being a terrible person.

Second, retaining an attorney to punish your spouse is going to cost you since your attorney is going to need to expand the number of hours they spent on your case. Added attorney hours means greater divorce costs, and greater divorce costs means there is going to be fewer assets and capital leftover for you and your family. Attempt to rid the emotion out of your case and treat it as a business deal. The greatest revenge is to live a good life following the divorce being terminated.

Failing to Acknowledge Your Enemy – the IRS

Work alongside a divorce financial planner or tax professional to decrease the total taxes you and your spouse are going to pay throughout separation and following divorce; you can split the capital you save. Remember that both spouses are responsible for taxes due because of audits on joint returns, so it’s typically in your best interest to work with each other and decrease potential responsibilities. If you’re faced with complicated tax matters in your divorce, it’s best to speak with a knowledgeable family law attorney and a CPA.

Not Providing a Correct Budget

Divorcing spouses typically undervalue living expenses when they provide their preliminary budget for temporary alimony (also called “maintenance”), and later discover that they can’t cover all of their bills. Use a financial consultant to aid you in providing a correct and total budget.

Ignoring the Effect of Taxes in Divorce Settlements

It’s important to not forget that once the divorce is final, you might get taxed on the marital assets you acquired through your settlement. Maybe your spouse takes care of all the investments and proposes to split them down the middle. Sounds nice, correct? The only way to know for sure that you’re getting an honest deal is to establish the worth of the investments on an after-tax basis, then choose if you agree to the deal. Once more, you should talk with a tax advisor about the effect of any consideration of property division prior to you agreeing to it.

Failing to Evaluate Settlement Considerations

When you’re attempting to decide if your spouse’s suggested divorce settlement is honest and practicable, you should try to anticipate how the settlement is going to affect your finances in the coming years. There are a lot of factors to think about, comprising of incomes, assets, living costs, inflation, taxes, spousal and/or child support, retirement plans, investments, medical costs and health insurance expenses, and child-associated costs like schooling.

There are specialized divorce computer models that produce comprehensive and realistic analyses of your post-divorce lifestyle. You should speak with a local divorce attorney or financial planner that specializes in divorce for help analyzing any proposed financial settlement.

Being Emotionally Attached to Assets Through Divorce Discussions

The spousal residence, pension earned, an antique rug bought during the marriage – these assets usually come with a highly emotional discussion to divorce negotiations, in which could hinder beneficial decision-making. Usually, divorcing couples that are attached to their family home do not come to the realization that they cannot really afford. Yet, they make a strenuous effort to keep it, occasionally at the cost of retirement planning.

Nevertheless, the real estate market collapse has made it obviously clear that homes have a very low ROI and, in many cases, have a less than positive return; many homes presently are still underwater, and couples have had to turn their backs on their homes and the hard earned money they’ve invested.

Additionally, a home is a significant cash expense (like mortgages, property tax, maintenance, and utilities). Give up any emotional feeling you might have. Throughout your divorce and settlement discussions, your main concentration needs to always be on how to get the most out of your finances by guaranteeing you are going to have enough money for living expenses following your divorce and through retirement.

Abusing Your Divorce Lawyers Time

Divorce lawyers typically bill clients $200- $300 each hour, and associates in distinguished New York City, L.A., and San Francisco family law offices usually bill clients charge $450 each hour. These lawyers can offer counsel on divorce-associated matters, but they are not psychologists or certified financial advisors. Should you need to speak about your emotional elements of your divorce, or should you require career counseling or economic analysis, save money on added attorney’s fees and make sure to speak with the proper professionals, like a certified therapist, vocational consultant, or a financial advisor.

Be Wary of Settlement Offers That Appear Too Good

Each spouse and children are required to make concessions in their lifestyles after the divorce. Settlements that does not prove one spouse enough money to survive on is probably going to go into default down the road. Be honest but confirm the numbers. Acquire payments up-front, when possible, even when you obtain less in total. Attempt to secure every payment with assets and insurance. It might be wise to talk to a family law attorney that can examine a settlement offer and guarantee your rights are fully safeguarded.

Ignoring the Long Term Effect of Inflation

The effects of inflation on expenses of a child’s college education, or on retirement, fifteen years in the future can be severe. The “Rule of 72” is a simplistic way to assess the effect of inflation. For instance, when the inflation rate is three percent the “Rule of 72” means that costs are going to double in 24 years (72/3=24). College costs at five percent inflation are going to double in 14.4 years (72/5=14.4). Make sure to include inflation into your settlement talks so you can cover the actual expenses of future financial costs.

Failing to Take into Account Your Spouse’s Qualification for Social Security Benefits

When spouses are married for ten years or more, a non-working or lesser-earning spouse is entitled to an off shoot of social security benefits through the higher income spouse’s (“worker spouse”) record. These off shoot benefits are not going to affect or lower the their social security payments, making it ironic that an average life of marriages for individuals that get divorced is around nine and a half years. Holding back just another six months could make sure increased retirement options with no decrease in payments.

Neglecting to Update Estate Documentation

Following divorce, a lot of individuals forget to alter the beneficiaries on life insurance policies, IRA’s, and will(s), so estates they wished to leave to their children, new companion, or preferred charity might go to their ex instead. If you’re enduring a divorce, speak with a family law attorney and determine what changes you should make to your estate plan throughout and/or post-divorce.

Failure to Adequately Insure the Divorce Settlement

Your ex-spouse’s premature death or disability can be devastating and may result in a loss of alimony, child support, college tuition, or property settlement payments. Life and disability insurance policies can guarantee that these payments will continue despite an unexpected loss or injury.

Failing to Create a Post-Divorce Financial Plan

One undeniable fact of divorces is that two households are more costly to handle than one. A lot of divorcing couples do not realize that their divorce settlement is required to last a considerable amount of time: potentially for the rest of their lives. Financial planning can assist individuals to transition from married life to a single lifestyle by focusing on financial goals, making realistic expectations, and producing solid planning for the assignment and division of financial funds.


  1. Nolo. (2016, October 24). Top 15 financial mistakes to avoid in your divorce settlement.

Speak with Our Divorce Mediators in Arizona Today

While the divorce mediation process is not for everyone, it can save you money, stress, and hassle. Speak with a professional divorce mediator to find out if divorce mediation is right for your family.

Let us show you how divorce mediation can be a perfect solution to allow you to end your marriage today without ending your family.

If you’re ready to start your consultation with Ogborne Law, visit our Mediation Consultation request page.

Ogborne Law can help with divorce mediation in Phoenix, Arizona, and surrounding areas. Our law office is located at 5020 E Shea Blvd Suite 240, Scottsdale, AZ 85254 inside the Paradise Valley Plaza.

Let us show you how divorce mediation can be a perfect solution to allow you to end your marriage today without ending your family.

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