Financial Team Mediation: Working Together to Achieve Exceptional Financial Outcomes

What Is Financial Team Mediation?

Jointly developed by Carl Palatnik, our founder, and Ken Neumann, a highly experienced divorce mediator and trainer, Financial Team Mediation is an innovative co-mediation process that combines the benefits of mediation and divorce financial planning to help separating or divorcing couples better resolve their issues amicably, equitably, cost-effectively and in a timely fashion.  Financial Team Mediation can also be used to mediate pre- and post-nuptial agreements and other disputes.

Common Alternatives to Financial Team Mediation

The most common alternatives to Financial Team Mediation are litigation, traditional mediation and interdisciplinary collaborative divorce.  We have had experience with all of these methods and have in many cases seen highly successful and workable outcomes.  We have, however, also noted method-specific weaknesses.   Although we realize that no method is suitable for all situations and always do our best to support clients who choose the method with which they feel most comfortable, Financial Team Mediation was developed to “combine the best of all worlds.”   .

Litigation

Litigation has been the traditional method by which people divorce.  Litigation is an adversarial process that is tightly governed by the law.  In our experience, it is usually the method of choice when there is a lack of trust or an otherwise inability for the parties to work cooperatively.     In litigation, the divorcing parties frequently hire lawyers to represent them.  Because of the nature of the process, an unrepresented party in a litigated setting is often at a disadvantage.

The litigation process can be lengthy and expensive and the results unpredictable, even if the case is ultimately settled outside of court.  Because of the adversarial nature of the process, there is sometimes collateral damage, for example to the children.  Healing is sometimes also more difficult than with other methods.  On a positive note, the litigation process is much more rigorous than traditional mediation or interdisciplinary collaborative divorce.  This can help prevent some financial issues from being overlooked, hidden or misunderstood by one or both of the parties.  Mor detailed information about the litigation process in New York can be found at Red Zones.

Traditional Mediation

Mediation is a less adversarial alternative to litigation.  Unlike litigation, in which attorneys advocate for their clients before a judge, a mediator typically works as a neutral facilitator, helping the parties work together to achieve a mutually acceptable agreement.  Unlike a judge, the mediator does not “hear” the case and make decisions based on the “evidence.”

Mediation is a friendlier and less expensive process than litigation. Outside professionals, including lawyers and financial and mental health professionals, are often brought in to assist the process when difficult to resolve issues related to their areas of expertise arise.  Lawyers representing the parties typically also draft and review agreements before they are submitted to the court for approval.  The court does not review agreements to assess whether they are fair or workable, that is the job of the divorce financial planner, but whether they are fashioned in a way that is in keeping with the law.

The mediation process is less rigorous than the litigation process, relying more heavily for information on the parties’ willingness to work cooperatively, honestly and with a mutual commitment toward a fair and workable settlement.  This can be problematic if there is a power or knowledge imbalance between the parties or a lack of in-depth understanding of the underlying financial issues.  On a positive note, there is often less collateral damage than in litigated cases.  Since mediation does not rely as heavily on the law as litigation, it can sometimes also lead to more creative and workable outcomes.

Mediators can have a variety of backgrounds.  Some also practice law, which helps them understand divorce issues in a legal context, some are mental health professionals with extensive experience in helping settle disputes and some are experts in comprehensive divorce financial planning and thus better able to understand the financial consequences in the decision-making process.  Financial Team Mediation was designed to meld these areas of expertise into a single process..

Interdisciplinary Collaborative Divorce

In collaborative divorce, instead of having a single, neutral mediator lead the process, the parties are separately represented by lawyers who agree in advance work cooperatively on their respective client’s behalves.  Allied professionals such as marital therapists, coaches, child psychologists, accountants and financial planners are frequently also involved, working as a team under the leadership of the attorneys.

Many different practice models exist, from some in which the only professionals are the lawyers to some in which the allied professionals participate on an as needed basis to some in which all professionals participate in all professional and all client meetings.  The common goal of these models is to produce a comprehensive and fair settlement agreement that is responsive to the legal, financial and emotional interests of the parties.  To help accomplish this and avoid potential conflicts of interest, the lawyers are required to agree in advance to not continue to represent their clients or go to court should the collaboration fail.  In those cases, the clients are required to start over with new lawyers and allied divorce professionals.  To avoid potential conflicts of interest, other participating professionals, who unlike the attorneys function as neutrals in the process, are also required to agree in advance not to do future work for the participants once the divorce process is over, even if a successful outcome has been achieved.  These are strong incentives to help all participants arrive at a mutually successful outcome.

While often successful, having a large group of professionals with competing agendas (legal, emotional and financial) sometimes suffers from a “too many cooks in the kitchen” syndrome, which can slow down the process, making it difficult and prolonged.  “Too many cooks” can also make the process very expensive, morale-deflating  and more contentious than originally intended.   Despite the best intentions of the professionals, the weight of these issues can sometimes cause the collaboration to break down or fail.  Mediation can sometimes rescue the process or help get the participants through difficult impasses.  Otherwise, the parties are obligated to start over, usually with litigation.  This prolongs the process and makes it even more expensive.

Building Your Team

Should you choose to use Interdisciplinary Collaborative Divorce to settle your divorce, the professionals at Divorce Analytics can assist you in put together and participate in your divorce team.  Your success will depend in large part on the quality of your team and its experience in Interdisciplinary Collaborative Divorce. For example, although a litigator may agree to work cooperatively on your case, our experience has been that the likelihood of success is greatest when the professional participants are trained and experienced in collaboration and mediation.

Why Financial Team Mediation?

Financial Team Mediation evolved from our past experience with each of the above alternatives.  Below is a list of some of the features that distinguish it from these other methods:

  • Financial Team Mediation is led by mediators who work as neutrals for both parties instead of by separate attorneys who advocate for their respective clients. Although attorneys may directly participate in Financial Team Mediation, they do not lead the process, thereby avoiding an adversarial atmosphere with competing agendas.
  • To help keep the process focused and on track, allied professionals are brought in only as needed. In or experience, collaborative divorce teams can sometimes be too large, slowing down the process and causing it to become more costly and contentious.
  • One of the mediators has extensive primary financial planning and tax expertise, the other extensive primary experience in mediation. This combination helps level the playing field and helps ensure that the parties make well-informed and well thought out decisions.
  • Two mediators working as an interactive team opens up more possibilities for the development of workable and creative solutions.
  • To help insure the accuracy and completeness of information, the financial discovery process is more rigorous than in traditional mediation.
  • Financial Team Mediation is typically much less costly than litigation or interdisciplinary collaborative divorce.
  • Divorce Analytics is in the process of developing a specialized training program for Financial Team Mediation. In the interim, it has and will continue to provide associated practitioners with extensive support.
  • If for any reason the Financial Team Mediation process is not fully completed, expert appraisals, reports and evaluations, such as those for pensions, businesses and real estate are not prohibited from future use, helping avoid forcing the parties to completely start over.

Benefits of Incorporating Co-Mediation into the Financial Team Mediation Model

  • Checks and balances, two neutrals at the head of table, less chance for mediator bias.
  • Opportunities for professional brainstorming in planning sessions, dealing with impasses or arriving at financially workable outcomes.
  • Mediators have complementary backgrounds, strengths or perspectives. They can also divide tasks in ways that take advantage of their individual strengths and expertise and avoid getting bogged down in individual areas of weakness.
  • Strong financial and tax expertise is brought to the head of the table.
  • Greater opportunities for individual attention.
  • Helps keep the playing field level.
  • Models good problem solving methods for participants.
  • Clients can benefit from past experience of mediators having trained or worked together on other cases or in similar situations.
  • Mediators can caucus or participate jointly and directly with the clients when it increases the effectiveness or speed of the process.
  1. Cost effective. Parties can often arrive at better results more quickly.
  2. Can make the process less emotionally charged.
  3. Can increase the level and effectiveness of direct mediator-client communication.
  4. Can Increase the parties’ level of trust in the process.

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