Financial issues often emerge as flash points of conflict in separation agreements. Disputes about money can escalate quickly, and if you let them fester, can lead to prolonged court battles and exorbitant legal fees. Unfortunately, the traditional adversarial approach to resolving disputes can add to tension and prolong the process, leaving both parties emotionally and financially drained.

As a family mediator, I frequently advise my clients to enlist the help of a Certified Divorce Financial Analyst (CDFA). They specialize in navigating the intricate financial complexities common in family law cases. Unlike lawyers, who are each required to fight zealously for their client, CDFA's are neutrals, like mediators, who focus on achieving an equitable outcome for both parties. Their hourly rates are almost always lower than lawyers, and are split equally between each client.

Here are just some of the items a CDFA can help with:

· Child support obligations

· Spousal support entitlements

· Valuation of the home and other investments

· Division of workplace pensions

· Tax implications when RRSPs or pensions are transferred

· Treatment options regarding inheritance & family gifts

· Status of assets brought into the relationship

· And many, many more

In all separation agreements, both parties are required to disclose all assets, liabilities, and financial obligations, but they may not trust one another’s disclosures, let alone agree on how to divide them. Without a foundation of trusted facts, disputes over child support, spousal support, and property division can linger unresolved, prolonging the separation process – and the fees - indefinitely. One of the most compelling reasons to engage a CDFA is their ability to determine who owns and owes what amount, according to law. They accomplish this by gathering evidence of each party’s assets and liabilities and entering that information into specially designed spreadsheets and calculators to determine each person’s entitlements and obligations.

All of this is not to suggest that the CDFA is always a one stop guarantee. Depending on your level of conflict and the complexity of your finances, other financial experts can sometimes be required as requested by the CDFA or either of the lawyers. This could include

· Business valuator

· Estate lawyer

· Insurance advisor

· Forensic accountant

· Real estate appraiser

· Pension Specialist

· Tax advisor

In addition to the number crunching, since they are neutral and objective, CDFA's foster an environment of collaboration and cooperation, minimizing conflict and reducing overall expenses. They save time and money in the short term, and by ensuring your separation agreement is accurate and enforceable, their benefits last well into the future.

Ultimately, the decision to enlist the services of a CDFA is an investment in clarity, fairness, and peace of mind. By prioritizing precision and collaboration in resolving financial matters, couples can streamline the separation process and mitigate the emotional and financial toll often associated with divorce proceedings.

ABOUT THE AUTHOR

Mike MacConnell, founder of Reflective Mediation, is an accredited family mediator, conflict coach, educator and author. He is the highest-ranked mediator on Google in the greater Toronto area, with over 180 5-star reviews. To book your free consultation click here.

Divorce is a challenging and emotionally taxing experience for anyone involved. When it comes to resolving the myriad issues that must be addressed during this process, one important choice is between mediation and arbitration. Both alternatives offer distinct advantages and disadvantages. In this discussion, we'll compare and contrast these two approaches, considering the risks, benefits, and the suitability of each for different circumstances.

Mediation: The Non-Adversarial Route

Mediation, often hailed as a non-adversarial approach to conflict resolution, allows couples to retain control over their divorce negotiations while working with a neutral third party, the mediator. The mediator does not have the authority to make binding decisions but facilitates productive discussions between the parties. This approach has its pros and cons.

Pros of Mediation:

Control and Collaboration: Mediation empowers couples to take an active role in shaping the outcome. It encourages open communication, negotiation, and finding mutually acceptable solutions, which can be particularly beneficial when children are involved.
Cost-Effective: Mediation typically costs far less than arbitration. It is based on hourly fees for the mediator's services, making it a more budget-friendly option for most couples.
Faster Resolution: Mediation often leads to quicker resolutions, as couples can schedule sessions at their convenience and meet privately between sessions to resolve some issues.
Preservation of Relationships: Since mediation fosters cooperation rather than confrontation, it can help preserve or even improve the post-divorce relationship, especially important when co-parenting.
Long Term Compliance: Since parties themselves arrived at the decision, they are more likely t comply with it than in cases where one party is unhappy with the arbitrator’s decision.
Lawyer Support: Terms agreed upon in mediation, including complex financial issues, can be reviewed by lawyers, who offer advice along the way or at the end, and convert the terms into legally binding Separation Agreement.

Cons of Mediation:

Lack of Binding Decisions: The mediator's role is limited to facilitating discussions. If either party is unwilling to cooperate or unable to make decisions, there is no certainty that an agreement will be reached.
Power Imbalance: In cases where one party is more assertive or articulate, the mediator may struggle to balance power dynamics.

Arbitration: The Binding Out-of-Court Alternative

Arbitration offers a different approach. It is an adversarial process where each party presents their case to a neutral arbitrator who renders a final, legally binding decision. It is well-suited for situations where the parties cannot reach a consensus through negotiation or have concerns about a good-faith process.

Pros of Arbitration:

Binding Decisions: There is certainty in advance that the arbitrator will make a decision, which provides a sense of confidence in the finality of the process.
Duration: In cases when parties are indecisive or arguing back and forth, arbitration can arrive at a conclusion in a shorter time.

Cons of Arbitration:

Costly: Arbitration is typically much more expensive than mediation, primarily due to the hourly rates associated with the arbitrator's services.
Less Control: Couples have less control over the process and the final decision. The arbitrator, not the parties, has the authority to make the call.
Adversarial Nature: The adversarial process may escalate tensions and hinder amicable post-divorce relationships, which can be particularly detrimental when children are involved.

Pros of Both, Compared with Court

Privacy: Arbitration and mediation are both entirely private, unlike court results which are on the public record.
Convenience: Mediation and arbitration are both more convenient when offered in private practice, since sessions can be scheduled to the
Duration: Court battles are notoriously lengthy, involving many steps in a system that is often overloaded and backlogged with cases.

Cons of Both, Compared with Court

Cost: Both mediation and arbitration have hourly fees, whereas self-representation in court has lower costs.
Public Record: Some people may wish to have the details of their marriage made public, particularly in cases when abuse has taken place.

Finding the Right Approach for Your Divorce

In most cases, for couples who aim to retain decision-making control, maintain a cooperative relationship, and keep costs in check, mediation is the preferable choice. It encourages open communication, focuses on interests rather than rights, and aims to find mutually beneficial solutions. However, it is essential that both parties are rational decision-makers, willing to negotiate in good faith.

On the other hand, if one party is uncooperative or indecisive, arbitration may be a better option. It ensures that a binding decision is made, reducing the risk of an inconclusive process.

Mediation and arbitration both offer viable alternatives to traditional court battles in divorce negotiations. The decision ultimately depends on the specific circumstances of the couple. Consider your willingness to cooperate, the complexity of the issues, and your budget when making your choice.

ABOUT THE AUTHOR