A cost-effective and practical solution to overcoming this problem is for the parties to hire one neutral CPA/forensic accountant to work on the financial issues and prepare a business valuation.   Obviously, this requires the “in-spouse” to cooperate fully and provide all documents requested by the CPA/forensic accountant.   The CPA/forensic accountant can work with both parties and their mediator to come up with financial plans and division of property based on the parties’ realistic financial needs.   The hiring of the CPA/forensic accountant can be without prejudice to either party so neither party is bound to accept the business valuation.  Because the joint CPA/forensic is a neutral he/she can meet with each party individually to explain the business valuation report.    Each party is also free to hire their own CPA/forensic to review the work of the neutral CPA/forensic.  This is still less expensive than both parties hiring thier own CPA/forensic. 

     This approach is especially effective in cases where there is no money to finance litigation.   Once upon a time, parties would use the equity in their homes to hire experts such as CPA/forensic accountants and conduct extensive discovery in an effort to determine the value of a small family business.   Today, with little or no equity in their homes, parties have no “bank” upon which to draw these funds.   However, even where equity or other funds may exist to finance litigation, parties need to ask themselves whether spending all that money will ultimately make sense.

     Mediation involves two parties sitting down with a neutral, experienced family law attorney, who is also trained mediator.  Not all family law attorneys have mediation training, so it is important to find one who has both mediation training and experience.

     Unlike litigation in court, mediation is a private and confidential process. The confidentiality component of mediation prevents the parties from testifying in court about what happened in mediation and/or from calling the mediator as a witness in any court proceeding.  This makes mediation a safe place for parties to freely discuss all of their issues, without fear that what they say will be used against them in court.

     The parties will sit down with their mediator and work to divide up their community property assets and debts and confirm separate property assets.  If the parties have minor children, the mediator will help them work out a timeshare plan for themselves and their children.  The parties will also work with the mediator to determine child support and spousal support (alimony), if any.  This does not have to be a lengthy process, but like Rome, a mediation agreement to end a marriage is not built in one day.

     As a first step, both parties will prepare the required asset, debt and financial disclosure documents.  The parties will list all of their property, debts, income and investment opportunities. Failure to do so can result in severe penalties.  The mediator can assist the parties in this requirement. This is far less expensive then having attorneys conduct formal discovery, such as depositions, interrogatories and demands for production of documents, since parties in mediation will voluntarily provide each other all documents needed for a full and fair disclosure of their property, debts, income and investment opportunities.

     However, the mediator does not represent either party and the parties are free to consult with their own attorneys throughout the mediation process.  Even where parties do not consult with their own attorneys throughout the mediation process, the mediator should encourage both parties to have their final Agreement/Judgment of Dissolution of Marriage reviewed by a consulting attorney before it is signed.

     What happened if parties in mediation disagree about custody of the children?  Instead of litigating in court, they can hire a neutral third party mental health expert—someone with experience in child custody issues—to assist them in resolving a custody dispute.  Parties can also retain a neutral third party expert to help them value a business or personal property, such as antiques, art, jewelry and the like.

     Because both parties usually split the cost of mediation, they both have a financial incentive to make the mediation process work.  Mediation has been shown to be at least two-thirds less expensive than litigation.  Parties who mediate never have to take time off from work to go to court, attend a deposition or work on answering volumes of discovery such as interrogatories.  Unlike the rigid hours of court, mediation hours are flexible and the environment is non-threatening.  You can dress casually and have coffee, water, juice or soft drink with you in mediation.  If your cell phone goes off in mediation, you can answer it. If your cell phone goes off in the courtroom, the bailiff may take it away from you.

     Sometimes parties in mediation will want to talk to the mediator privately.  This is called a “caucus.”  Anything said by a party in a “caucus” is confidential, unless that party permits the mediator to disclose the information to the other party.  Sometimes a party needs to express feelings to a mediator that they currently are unable to express to the other party. Often a mediator can help them frame their feelings or more narrowly focus an issue, which can then more easily be presented to the other party.

     If you and your spouse are serious about resolving your divorce issues, then mediation is the best path to take.  You and your spouse will conserve financial resources, which is no small thing.  Your divorce can be concluded quickly and efficiently because you will avoid the lengthy process of litigation.  If your are still not convinced, ask anyone whose been through the family law litigation process.

• You don’t pay for travel time.  Your attorney will likely bill you for some or all of his/her travel time to and from the courthouse.
• You don’t pay for waiting.  Your attorney will likely bill you for the time waiting at the courthouse to have your case called and heard by the judge.
• You save on gasoline because you are not driving to a distant courthouse and you save on parking because it will either be free or your mediator should validate your parking.
• You control the date and time of your mediation sessions.  You are not bound by the courthouse schedule.  This is a very big advantage because you can often avoid taking time off from work and thereby not lose income or hurt your career.
• You can pretty much wear what you want.  Most attorney will tell their clients to dress at least business casual when going to court and never to wear jeans.  In mediation, you can wear shorts and flip flops.  Nice in the Summer.
• There is no stress.  Seriously.  You are not going to be called as a witness.  You are not going to be intimidated by a courthouse full of attorneys or the judge who sits on the bench wearing a black robe, because none of that is present in mediation.
• You can bring a drink (non alcoholic of course) and/or a snack to mediation.  You cannot eat or drink in the courtroom.
• You can leave your cell phone on in mediation.  Judges can and will confiscate a cell phone that rings in their courtroom.

The list of advantages to mediation can go on and on, but by now you get the point.

If you choose mediation, you can protect your privacy and your dignity.  Mediation avoids the emotional trauma of an adve rs arial process.  Some couples will choose mediation because they know it will save them a great deal of money and there is nothing wrong with that.  However, perhaps the better reason to choose mediation is to keep control of the outcome of your divorce and thereby maintain your dignity.

A successful mediation outcome does not necessarily mean that you and your spouse are going to hold hands and sing “kumbaya.”  However, it does mean that you and your spouse will feel safe and smart—knowing that you have designed your own agreement and avoided the emotional rigo rs and expense of courthouse litigation.

If your divorce involves minor children, you will create a parenting plan with the help of your mediator.  Your mediator might also suggest the assistance of an outside neutral parenting coach, such as a trained family therapist.  Here in Los Angeles County , I encourage divorcing parents to attend the free P.A.C.T. class, which stands for Parents and Children Together.  It is an excellent 3 hour parenting class, which is designed to give parents the skills to communicate with each other and their children going forward.  Parents may attend the class individually or together.  Children do not attend.  The P.A.C.T. class is also available in paternity cases.

A legal Black Hole is what people who choose divorce litigation can easily become sucked into. Money goes to attorneys, accountants, custody experts, process servers , even private investigators. As Mr. Lieber points out, people going through divorce often get swept up in the rage. Instead, their first step should be to sit down with a mediator and consider all of the issues in their divorce, such as how they will be able to financially support two households if there are children, health insurance, college education for the kids, preserving their good credit and taxes, to name a few issues. If they cannot agree on a roadmap for resolving these issues, the parties are still free to jump into the legal vortex, retain attorneys, and litigate in court.

Here’s a partial checklist to consider when beginning mediation:

1. CREDIT: Don’t cut off your nose to spite your face. Often, couples stop paying joint credit card bills or other legal obligations because they’ve simply stopped communicating with each other. This is more likely to occur when couples have square off with attorneys and have chosen the path of litigation or what often becomes mutually assured financial destruction. A mediator can help couples work out a plan for the payment of bills, so credit scores don’t get ruined.

2. HEALTH INSURANCE: If your spouse covers your health insurance, he/she probably won’t be able to continue to do so once the divorce is final. You can continue on your ex-spouses health insurance on COBRA, but the time period is limited. COBRA can be prohibitively expensive if you are already paying rent or a mortgage, even if you are receiving support from your ex spouse. In mediation, there are more possibilities to negotiate a settlement that will cover health insurance premiums. A mediator might even suggest using a neutral financial planner to assist the parties in this area and in developing a post-divorce financial plan.

3. COLLEGE EDUCATION FOR THE CHILDREN: Here in California, there is no requirement that parties pay for the college education of their children.  However, parties may agree to set up college education accounts, such as 529 college plans, as part of their divorce agreement, which becomes a court order. Because mediation is generally at least two-thirds less expensive than litigation, parties who chose to mediate will likely have more money left over and available to establish a college education account for the child or children. Divorcing parents should not loose sight of their children’s long-term educational needs.

Divorce can be an emotional roller coaster, but there is a price to be paid for anger and failure to communicate, and that price can be very real in dollar terms. Indeed, divorce litigation is one of the few human experiences where anger trumps greed. Couples who choose to mediate can still have their own attorneys advising them along the way. However, they should make it clear to their attorneys that litigation is not an option and that they are committed to making the mediation process work. If you stay on track and stay committed to the mediation process, you will end up with a divorce agreement that will work.

Finally, I often have mediation clients ask me what happens if things change after their divorce agreement is entered by the court and becomes final. My answer is always the same: If there is a change of circumstance, for example a change in a parties financial situation, then both parties are free to return to mediation to work out a modification of their original divorce agreement. Mediation does not have to be a one time only process.

Forget what you see on television. Those fast paced television trials have no place in family law, where a child custody evaluation can take as long as eight months. Due to crowded court calendars, family law trials rarely proceed day to day. Trials can be spread out over weeks, even months.

The alternative to expensive litigation is mediation. Ironically, the only way people reach a resolution during litigation is when they see that is better than the continuing conflict. In mediation, an experienced mediator will help the parties identify their positions, interests and commonality and delineate the gaps between them, thereby helping them reach a mutaully acceptable agreement. Mediation is also available for post-divorce matters, such as modifying custody, visitation and/or support.

With the cost of mediation about two thirds less than litigation, a successfully mediated divorce or post-divorce matter should leave you with enough money for dinner at Babbo, and your child’s college education.

If parties are unable to accept each other’s position, then a mediator needs to take them down a different path, but at the same time get them to recognize that they are interdependent insofar as reaching an eventual agreement. This often means taking so-called baby steps along the way to a mediated agreement. A mediator should be hard on the problem and soft on the people.

The Navajo Indians recognize that with litigation you normally have a winner and a loser. This outcome usually just starts future conflicts. Even in a high conflict custody case, mediation is possible where the parties will at least acknowledge each other as parents. Conflict can often be an opportunity because most conflicts in family law started with a positive relationship. Dating, getting engaged, the wedding, the honeymoon, the birth of children, buying the first house, and so on. Parties in mediation need to know there is a future beyond the conflict. But, parties must also understand that mediation will not cause a behavioral change in their spouse. The goal is to reach an agreement that deals with who your spouse is, not who you want your spouse to be. After all, isn’t that one of the reasons you are getting divorced in the first place?