Divorce Mediation Mistakes That Cost People Thousands

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Welcome to WeChat Divorce, hosted by Karen Chellew, Legal Liaison and Catherine Shanahan, CDFA.

Each episode we sit down with divorced professionals and industry experts to provide insights and frank discussions about real people, real situations, and real divorce to help you achieve your best life post divorce.

0:40

Everyone says they want mediation.

We get it.

But here’s our question, What exactly are you mediating if you don’t even know what you have?

We’re seeing too many people walk into mediation with half of the documents and all of the hope and then they’re shocked when the agreement doesn’t cover spousal support or account goes missing or just data that they thought was there isn’t there.

1:02

So today we’re talking about this.

Mediation only works when the facts are complete.

I feel like we’ve talked about this other times, but I we can’t talk about it enough, Catherine.

Every week we run into the same issues and I, you know it, it’s true.

1:18

It’s the hope.

It sounds so wonderful and it is wonderful, but a lot of things have to be aligned before it works really well.

Oh.

Yeah.

And everyone thinks, oh, it’s just cheaper, it’s faster, there’s no conflict.

We get along so great.

So we’re going to agree to things that we wouldn’t get if we went to trial, so let’s just do this.

1:38

But you get there.

And if you don’t listen to your gut, which, you know, we all have that person talking to us internally, then you end up signing off on something and you’re the next day, you have so much remorse.

Talk about buyer’s remorse.

It’s a settlement remorse, just ’cause you weren’t clear, you never got the clarity that you really needed to make that negotiation or that settlement.

1:59

Yeah.

Mediation is a process, not a miracle, and I think a lot of people don’t realize that until after the fact.

And, you know, hopefully they have time to change or reconsider, but most of the time not if they’ve signed even, you know, in principle at mediation, which often happens.

2:19

I know there’s just a case that, you know, she walked away excited about a support payment that she got and was happy she was told that she got 5545 split in her favor on the assets and when we asked for the agreement to look.

At because.

She was unclear what that actually meant.

Meant the next day.

2:34

I mean the next day is when she emailed and said Oh my gosh, I think I made a mistake.

Well, we don’t know if she.

Made a mistake or not, but so we asked for the agreement and now it’s a week.

Later we still.

We don’t have the agreement and she still is unclear what she actually settled on.

Yeah.

And she doesn’t have the agreement.

She just thought 5545 sounded great.

2:51

But what we’re going to talk about today in our discussion 5545 of what?

Right.

Yeah.

And a lot of times I see and she may even be the.

Case I’ll be curious when we get the agreement to look at where there’s a lump sum alimony buyout.

And what they do is they.

Shift an asset.

3:07

That’s on their balance.

Sheet.

So let’s just say we’re giving spouse $200,000 in a lump sum alimony buyout.

So they move the 2. $100,000 from the payer spouse.

Into the pays column and all of a sudden it looks like 5545 or what have you.

But that really wasn’t the division.

That’s not that’s not what we’re asking for.

3:23

So you got a 5050 division, but after you got your lump sum alimony, it seemed like you got more.

But that’s.

Not equitable distribution.

Those are two different things.

But I’ve seen this happen often where they say, look, you did get 55, well, yeah, because you’re paying my alimony in a lump sum, but that shouldn’t be counted towards my percentage, right?

3:43

Supports very different from asset division and a lot of people don’t realize that when those factors are going in there.

We we just had an e-mail from a client today as well today and yesterday saying, you know, my attorney’s pressing me to go to mediation, but these are the things that are left outstanding.

4:03

What should I do?

Ask your attorney to get the document so you can be prepared for mediation.

That’s what you should do.

But the attorney didn’t say that.

The attorney said we got to get to mediation, but what are you going to mediate?

4:19

There’s so much missing information and documentation, which is the repeated, repeated cycle when people are in litigation.

And you know, some people, a lot of people go to mediation without their attorneys as well.

And you know, the question always becomes, why didn’t my mediator ask for that?

4:37

Well, they’re not realizing the mediator is a third party neutral who’s facilitating the conversation between the two parties.

And you know, they give what is given to them.

So if one party gives them a balance sheet or a spreadsheet or whatever it is that they’re bringing to mediation or even nothing, just saying I don’t have that or I don’t have this.

4:54

It’s.

Your it’s your.

Responsibility to ask the mediator to get those documentation.

It is your responsibility to say no, I’m not ready.

Like I don’t have the documentation to support this.

Because if you don’t stand up for yourself, your spouse isn’t going to do it, and the mediator is probably not going to do it.

5:10

Right.

And if your attorneys are representing you at mediation, which is often in the form of a settlement conference or it’s it is called court mediation, you can be there with your balance sheet so that when they come back to talk to you, you can know if everything is being covered.

5:26

You can know that I think a lot of people just believe that their attorney is going to take care of it all.

And I guess to the best of their ability, maybe they are, maybe they’re not.

But you have a role in this.

And you know, I say often to our clients here at My Divorce Solution, we help you be in the know.

5:42

We’re not just doing anything for you.

We’re doing it with you, alongside you so that you can be confident when you’re in these situations, needing to make decisions for yourself.

It’s important.

Well, yeah, ’cause you.

Can’t go back right and then, then you you end up walking away with an agreement that you had no idea that you what you agreed to.

5:59

You know, there was another case with mediation and the.

Parties verbally agreed.

But then when the mediator wrote up the agreement, it wasn’t what one party thought it was.

So now they’re at square 1 again.

For sure.

6:15

Yeah, It it just happens over and over again.

And I think the best approach is when you go to mediation and you, you really hold your your commitment to maybe agreeing in principle, not signing on anything but saying I need to digest this, I need to understand it even with my financial advisors, whoever you have on your team and then signing.

6:40

Because more than not, people walk away with uncertainty.

Uncertainty and regret, like just like you said at the beginning of our discussion.

And sometimes there’s innocent mistakes.

You know when.

When no one is requiring you to bring the documentation, the correct documentation, things are often overlooked.

6:58

You know, we had a client on the other day and I said, you know, you, you in your mediation agreement, that wasn’t an agreement.

It was the balance sheet the mediator was working off of.

You mentioned you and your spouse are each keeping your own pension.

Well, I have no document to support that because she didn’t upload anything.

It was.

Just what they decided and I just asked her to get on while we were on the call together to log into her employment employer website.

7:21

She’s like, Oh my gosh, I didn’t even realize I have two pensions.

She didn’t.

She didn’t, honestly did not realize it.

So that was just an overlook on her part.

And we didn’t have spouses, and their incomes are so different that it was hard for me to believe that they were both.

Equal.

Now, he could have started late.

I don’t know.

The pension could have started later.

I have no idea.

7:36

But we asked for that statement, so we’ll see what happened there.

But again, sometimes it’s an innocent mistake.

You know, it’s not necessary.

You’re saying your spouse isn’t honest or your spouse is hiding things.

You could be very amicable.

And just make a little mistake because you just didn’t know so.

That’s what our checklist.

Shows and Why?

7:51

We asked for all that data because you just don’t know.

About an asset that you may have just forgot about.

Yeah.

Or something that to your point, just gets left off of a, a sheet.

We had a, a settlement conference, well, I think it was last month where an entire property was left off the sheet and no one caught it.

8:08

Luckily they didn’t sign anything.

There were a lot of little other accounts.

And, you know, I was talking to the client and he was saying, yeah, you know, that’s just, that’s little, I’m OK.

And I said, well, all adds up to about $600,000.

So does that sound little to you?

Are you OK with that?

And he, he didn’t make that conclusion.

8:25

He just thought, well, those were all little things.

Of course, the real estate was added into that as well.

But it makes a difference to be in the know and to own like you own, you know, what you have and whatever and what should be being negotiated.

Even if your attorneys are doing the negotiation.

8:41

It’s really important.

Well, you know, you often hear you can change it.

Later, or we’ll fix that later.

And now you’ve been in a 10 hour mediation day and you don’t want to agree, but the.

Response is we can change it later.

And you know.

That’s another frustration because that’s come up to the table a few times this week as well.

8:57

You know 1.

Person called she.

Made had her mediated agreement and.

She said she was having night terrors because.

She can’t.

She’s so uneasy about what she agreed to and one of the things was child support and I looked at the agreement and sure enough they said there was zero child support.

9:12

But now she’s all upset because she doesn’t even.

Recall.

Why she agreed to that even though their incomes are similar, she still feels like she.

Just wants.

Child support because of the kids.

Expenses and extracurricular I don’t.

Think was fully covered, but you know, she thought she could just change it, but she sent us a signed agreement.

9:28

I mean, it’s, it looks like a binding signed agreement.

I said you need to go back to your attorney because I can’t give you legal advice, but it looks like you signed this and it looks like you were clear on why you signed it.

And so she’s, I gave her a couple questions to go back to ask her attorney about.

But you know, that’s another common thing.

It’s not so easy to go back and change things.

9:44

And if you’ve signed it legally, I don’t even know that you can change it.

I agree.

Now you can further clarify in the formal marital settlement agreement.

Usually that comes after a mediation agreement, but the terms themselves that everyone agreed to for the most part.

10:00

And in our experience, you know, you lock in when you sign it and you know, a lot of attorneys will say, well, why are we going to mediation if you’re not willing to sign?

Well, I think there’s a reason to go to mediation.

But the, the devil’s in the details.

And when you’ve been through several hours or worse, sometimes we see these 8/10/12 hour mediations for anybody, attorneys included, to have the level of clarity needed for a fine, a final agreement.

10:28

I don’t even know how anybody could do that.

Yeah, it’s hard.

I think it’s really, it’s like torture.

I don’t even think it should be allowed to go that long, you know?

And they always say we want you to.

Who’s they, right.

But it’s often said, or I often hear attorneys will say, well, we got so far, we just need to finish this up.

10:45

If we don’t finish it up today, this is going to be a trial.

You know, let’s just hang in here.

But, you know, is that really worth it for the family?

Hanging in there, you know, why does it have to be done in one day you got so far?

Because the next day somebody’s changing their mind often, but they’re too afraid to tell their attorney or they’re just, they’ve signed it and it’s binding, though, you know, I still think that’s, that’s something that needs to be changed as well, that we’re almost there.

11:08

I yeah, it’s an uncomfortable situation for most people.

Yeah, and you, you know, you want us, you want to agree, you want to mediate.

But you know, when the threat is, well, if you don’t sign, we’re going to trial.

And now you owe me all this money.

Well, taking 24 to 48 hours or even a week to absorb the information and understand the impact to you, it is worth it.

11:31

And just because you don’t sign a mediation agreement at mediation, you can settle a case all the way up until trial.

So you know, they just want the finality.

And I understand why because some people walk away and change their mind.

Well, if that would happen, it’s going to happen anyways, right?

11:49

Your formal marital settlement agreement’s going to get all blown up because things were missed or whatever.

So we really encourage our clients to pause at mediation, go in with the knowledge and then make sure you understand the financial impact.

Yeah.

12:06

If you, if you can’t say that you’re financially clear and that could mean clear on what’s data is missing, clear on what data you definitely have, clear on what the impact to these decisions will be for you moving forward.

And you cannot advocate for yourself and you are not ready because you cannot go into mediation thinking that the mediator is advocating for you.

12:22

You can’t think that your attorney’s really advocating for you.

You have to think that you got to advocate for yourself and hopefully your attorney, what they say is in line for what you’re clear on.

Because if it’s if they’re not, then you have to be able to defend your numbers and defend what you’re looking for knowing that you have to compromise, but you really have to advocate.

12:41

For yourself, no matter what and that.

That’s probably what I like.

About my divorce.

Solution and our process is because you can walk in there with a division scenario that you would like, but you can understand that maybe you’re not going to get that.

And maybe.

You’re going to.

Pivot somewhere.

Along the way.

But you don’t go in and get blindsided, you go, they’re really financially clear and that is probably the most power that you’ll give yourself for sure.

13:03

So before you mediate, make sure you have a full asset and debt list that has BeenVerified, not waiting on documents or information unless, and I know that this happens on occasion, Catherine, with some of the clients that you’re preparing for mediation, you will say, look, if you can walk in and you get this when there’s a lot of non disclosure, that’s good for you.

13:29

And that’s not uncommon as well.

But when you are needing to really rely on verified documents and statements, make sure you have them before you’re mediating income.

Verified for both parties, A realistic support range.

There’s a topic we can all talk about forever.

13:49

Your property division scenarios and your non negotiables.

You’ll always need your non negotiables and that’s all covered in the MD’s financial portrait.

Non negotiables.

Be careful, because everything’s negotiable, right?

Good point.

14:08

So get your portrait, then mediate.

I’m all about mediation.

If you’re financially clear, at least, why not try it if you could.

But make sure that you use mediation as a tool.

And mediation is not your financial clarity.

It’s just a tool.

Your financial clarity is your strategy.

14:24

For sure.

Look, we’re not anti mediation, we’re anti blind mediation.

And anti pressured mediation.

Yeah, always.

I like what you said.

14:40

And this is just saying in a different way.

Mediation is is a tool.

Financial clarity is the strategy.

Didn’t I say that the same way?

I don’t know.

I didn’t hear it the same way.

Let’s just say it again.

14:57

Mediation is a tool.

Your financial clarity is the strategy on T-shirts, yeah.

Exactly.

I mean, it’s so frustrating.

This week.

It’s a Friday.

We don’t usually record on a Friday.

Today’s Friday through and it’s just, you know, there’s so much angst from our.

15:16

Seats because we hear this.

All day, every day.

And this week in particular.

And actually last week as well.

The last.

Two weeks.

I don’t know.

I’ve had so much anxiety about people.

Going into mediation because they come to the table the day before mediation.

15:32

Numbers are different.

Attorneys are giving you their spreadsheet the morning of or showing up with it, not even sharing or wanting something the day.

Before.

And that is really not a setup for success for anyone.

It’s unfair to the person.

15:47

Going to mediation it it shouldn’t.

Happen that way.

It’s really frustrating to me.

That, that’s how.

People operate and.

You want people to come to good conclusions through mediation.

Make sure they’re prepared.

There’s no.

Reason to wait till the day before.

16:04

That always gets me going.

It just seems like it happened, what, four or five times over the last week and 1/2?

Yeah, for sure.

Yeah, and and, you know, our ability to get in and have the clear conversation is at risk because the attorneys are having are so busy scrambling to get their first balance sheet together.

16:25

So, you know, really underscoring knowing knowledge, clarity all day long.

And you should.

Also know that you might have the right to.

Postpone mediation.

You don’t always have to.

Listen to what the date is that they’re giving you.

It’s always.

16:40

That’s another thing that gets me going.

You know where attorney will?

Say.

Oh no.

We can’t reschedule this.

You know the mediator will get mad or somebody’s getting.

Mad but yet?

An attorney will cancel mediation if they have a trial that pops.

In or their.

Kids are sick or what have you and so will the mediator will cancel or postpone so.

16:59

Find out if you have not postponed.

Your mediation.

Multiple times and you’re not up against a court deadline if you’re not.

Ready for mediation?

Don’t.

Go just wait till you get the clarity that you need and then go.

Agreed.

All right, so that’s us on mediation today.

17:16

If you have a mediation story or you’re in the middle of mediation and you would like to Share your story with us, please do so.

And if you know anyone going to mediation, share this episode with them just.

So they have.

The confidence and the courage to ask for the financial clarity that they need.

Reach out to us, let us know what you want us to talk about next, and we’ll see you on the next Divorce Explored.

17:39

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18:02

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