Many couples who decide to divorce or separate do not have financial assets which need to be divided. However, where there are assets, perhaps the family home, cars, savings or a pension, it is often the most difficult issue to agree upon. An advantage of mediation is that couples are free to make whatever arrangement they consider to be the most appropriate to their individual needs and as a result this aspect of the separation at least may be less stressful.
Both parties are encouraged in mediation sessions to discuss their financial requirements honestly, what they feel they need for the future, and what compromises they are willing to make. The aim of such discussions is to achieve an agreement which both parties are happy with and puts the needs of any children first.
It is necessary when negotiating on financial matters for each party to provide “full and frank” disclosure relating to their capital assets, income and expenditure, including pension valuations, supported with documentary evidence. Many people find this aspect of mediation tiresome, and it can be time-consuming, but no agreement can be converted into a binding court order unless there has been full financial disclosure on both sides.
Common considerations in mediating over finances are the distribution of the following:-
- The division of the marital home
- Assets acquired before during and after the marriage
- Savings and investments
- Contributions to the upkeep of the children
- Debts incurred before during and after the marriage
The impartiality of the mediator allows couples to come to an agreement while being aware of the needs of the other party, and that mediation is a two-way process. The mediator will not advise on the merits of the solutions the parties reach together, but may ask the couple to think about the consequences of their proposals, by “reality-testing” how an arrangement would work in practice. This process can be of real benefit in helping separating couples think about the practical realities of their situation as they move forward into separate lives.