Preparing for the Financial Part of Divorce Mediation: Some Helpful Guidance

During the mediation consultation, clients often ask what documents and information they need to gather to prepare for mediation. It’s important to understand that the more time spent preparing outside of mediation, the more efficient mediation will go, which may result in substantial time and cost savings. In this article, you will find some helpful tips on what information to gather prior to commencing divorce mediation to make the process go as efficiently as possible.

Divorce Mediation in New York entails making decisions on various financial issues. To be fully prepared to have meaningful conversations, it is best to come to mediation with all of the documents and information needed to help inform your decisions.

One of the financial topics covered in mediation is Equitable Distribution – the division of assets and debts. Prior to commencing mediation, all financial documents should be gathered. Here are some of the common asset statements that should be gathered for mediation: bank accounts, brokerage investment accounts, retirement accounts, stock options and RSU’s, cryptocurrency, Venmo and PayPal account balances (and the like), life insurance policies with cash values, 529 college savings accounts, and any other asset account statements that may be applicable to your specific circumstances. In addition, statements related to debts should also be gathered such as: mortgage and HELOC statements, car loans, personal loans, student debt loans, credit card statements, back taxes owed to federal and/or state, and any other debts applicable to your specific circumstances.

A nuance that comes up often in mediation is separate property acquired prior to the marriage. For example, if there are retirement assets, such as a 401k or IRA, that had account balances prior to the date of marriage, gathering statements as close to the date of marriage as possible and/or the balance of the account on the actual date of marriage will be helpful in ascertaining the separate property interest.

Other financial topics discussed in mediation are Maintenance/Alimony and Child Support. In order to run the state calculations, the mediator will need information and documents reflecting the couple’s individual incomes. This information is typically gleaned from the most recent federal tax returns including W2s, 1099’s, as well as the most recent paycheck stubs. That said, because mediation offers flexibility to deviate from the state calculations, it is important for clients to understand their monthly bills and spending as well. Budgets are an excellent tool to help inform decision making, and if you do not prepare budgets prior to mediation, your mediator will likely provide you with a budget form and ask you to do so during the mediation process.

Lastly, if there are assets that need to be evaluated, such as a business or real property, these types of assets may require the hiring of third-party experts. For a business, it is best to gather the past few years of tax returns prior to mediation. The third-party business evaluator will work with you to determine which other documents are needed. For real property, such as the marital home, if a buyout is something you are considering, having an appraisal or a realtor fair market analysis prepared will be helpful in guiding and informing your decision making.

Coming to mediation organized and prepared, will same you time and money. The more work clients do outside of mediation by taking the time to gather important documents and information, the more efficiently the mediation process will go.

As always if you have any questions about this article, mediation or the mediation process, I welcome your questions and would love to hear from you.