Dirty Tricks in Mediation Part 4

In this the last post of the Equitable Mediation Services‘ series on dirty tricks in divorce mediation, we’ll talk about some of the games couples play when it comes to spousal support (formerly known as alimony) which is by far the most hotly contested item discussed during mediation sessions.  Here in New Jersey, there are no guidelines to help us calculate spousal support and instead we have a series of “statutory factors” which provide general guidelines how alimony is determined.   Unfortunately, with that latitude, comes difficulty in determining what an appropriate number would be and so difficulties arise and the games begin.  Areas to be aware of include:

1. Imputing an unrealistically high income number to a non-working spouse – In today’s economy, even skilled workers are having difficulty finding employment and wages are lower than they used to be.  It is especially difficult for a spouse who stayed home to raise the children to now enter the workforce after a number of years away and expect to make what they “used to make.”  Be realistic about your job prospects and income potential when discussing what an acceptable support number would be and don’t be bullied into taking the first offer nor be unrealistic about what that job you used to have 15 years ago will pay now.  To combat this, I say “show me the numbers” and use the Bureau of Labor Statistics Wages by Area and Occupation Database: http://www.bls.gov/bls/blswage.htm.  Then you’ll at least have something real to go on.
2. Expecting your spouse will take care of you – spousal support is supposed to help supplement your income and provide both of you with a roughly equal standard of living to each other post-divorce.  Notice I didn’t say “the same standard of living that you had while you were married you will also have post-divorce.”  Be realistic as 2 households are more expensive to run than one and each spouse will be expected to contribute based on their skills and ability.  If your spouse expects the alimony to cover 100% of their monthly expenses, there may be an issue depending on skills and ability to work.  The solution?  Do a budget separating out your expenses and the kids expenses.  The number in the “adult” column is the number that work + support needs to equal.  How you get there is up to the two of you.
3. Forgetting insurance – so you work out this great support arrangement and your ex is very generous and gives you 99% of what you need to live and then… they pass away.  Guess what?  Alimony stops unless you have life insurance on your ex.  Seems odd I know but not discussing this during mediation is one of the biggest mistakes you can make.  Or worse yet, your ex is disabled and unable to work but very much alive.  Do they have disability insurance?  Talk about these things upfront to avoid unpleasant surprises later on and don’t let someone say “oh I have insurance through my job” because in this economy, the prospect of losing one’s job and with it one’s life and disability insurance, is quite real.

If you have any questions about divorce mediation, please feel free to contact us and arrange for a free consultation where will will explain the benefits of mediation and explain to you why mediation is the smarter way to divorce.  We look forward to helping you get through your divorce peacefully, efficiently and with as little impact to you and your family as possible.

Dirty Tricks in Divorce Mediation Part 3

In today’s post I’d like to focus on child support in New Jersey and some of the games people play when discussing it.  I  know it may seem counter-intuitive if you’re a parent but sadly, more people than you’d think put their children in the middle of their divorce and use them as negotiating pawns.   As we’ve previously discussed, for couples in New Jersey who are considering divorce mediation there are four major areas: parenting plans, equitable distribution, NJ child support and spousal support / alimony.  As with all facets of divorce mediation , the parties are expected to negotiate in good faith while working in a collaborative manner but that’s not always the case especially when it comes to financial matters such as child support.  Some of the tricks I’ve seen as a divorce mediator in New Jersey include:

1. Manipulating the alimony numbers to reduce child support - Depending on how long you have been married, your spousal support / alimony may be of a limited duration.  And since spousal support / alimony is a factor in the calculation of child support in New Jersey you may get an artificially low child support number if your spousal support number is too high.  Then when the alimony ends and the kids are still minors, you don’t have enough to cover their expenses.  To offset this, prepare an expense budget for both your expenses alone and the kids expenses alone.  This way you can see what you and the children really need in order to live.
2. Agreeing to a higher than calculated “fixed amount” of child support – I’ve seen one parent pressure the other to take a “one size fits all” number that is actually higher than the calculated guideline with the understanding that the first parent would not come to them for any additional expenses.  Because the child support guidelines don’t include all those ancillary expenses that kids often incur, the number you agreed to because it was higher than what was calculated isn’t nearly enough to cover things like gifts, field trips, tutoring, child care, etc.  The best way to get around this? Do a budget.
3. Dumping expenses on the residential parent – Just because the children live with one parent a majority of the time, it doesn’t always mean they should bear the brunt of all random expenses.  When support is calculated, there is a certain amount of money earmarked for “discretionary” expenses but be careful as only 25% of the support award is officially designated to discretionary spending.  Can you count on an ex-spouse to kick in for extras above 25%?  Make sure you discuss this in mediation and be very clear about how discretionary spending will be decided upon, tracked and reimbursed as more often than not it doesn’t cover those $250 concert tickets or the latest designer clothes.  These children belong to both of you and so do their expenses.

In our last post of the series, we’ll talk about spousal support / alimony but in the meantime should you have any questions about divorce mediation or how mediation can benefit you, please feel free to contact us to schedule a free, no-obligation consultation in one of our seven North or Central New Jersey office locations.  Of if you’re simply not ready yet, feel free to visit the Equitable Mediation Services website where you’ll find lots of great information about parenting plans, equitable distribution, NJ child support and spousal support / alimony and contact us when you’re ready.  We look forward to helping you get through your divorce peacefully, efficiently and with as little stress on you and your family as possible.

Dirty Tricks in Divorce Mediation: Part 2

In our previous post on the Equitable Mediation Services blog, we discussed some dirty tricks we’ve seen used during the discussion of parenting plans in divorce mediation sessions and some tips for avoiding the potential disasters that come with them.  Today’s post will focus on equitable distribution and some of the things we see and what you can do to try and protect yourself.  In my experience as a NJ divorce mediator, the three most common equitable distribution dirty tricks we see are:

1. Using a “power imbalance” to manipulate the division of assets – Power imbalances are when one party has an advantage over another party because the first party possess some level of understanding of a subject that the other party does not.  This is especially true when it comes to finances as when it comes time to divide the assets and liabilities, the person who is in the know, makes an offer which on the surface seems fair but in reality it’s not. To avoid this, bring in an accountant and a financial advisor to review the proposed settlement so you can understand the tax implications, the impact on your retirement and gain a better understanding of what types of assets you will have left in the end.  Do the assets fit your tolerance for risk?  Does it leave you with a series of taxable assets? Can you liquidate them easily if you had to? All important questions that a financial professional can answer for you.
2. Dismissing the value of an asset or liability - Too many times I’ve heard the following phrase “oh don’t worry my pension  /401k / bank account isn’t worth that much so we don’t need to look at the statements.  Besides we already agreed on how we’re dividing it before we got here.”  Really?  Show me the statement anyway and we’ll let both of you decide if it’s not worth talking about.  Guess what?  In my experience as a NJ divorce mediator,  99% of the time it IS worth talking about.
3. Liquidating accounts or racking up debt as a means of retaliation – divorce can trigger a number of emotions, one of which is anger.  If one party wasn’t expecting it, their first reaction may be to retaliate and that may come in the form of emptying bank accounts or racking up debt.  So if you think your decision to divorce will come as a surprise to the other party, before you make the announcement, make copies of your most recent financial statements including bank accounts, 401k statements, credit cards, etc. as well as take inventory and get appraisals on the items you own that are worth something such as art, collectibles, antiques and jewelry. This way in case your soon to be ex decides to sell everything on EBay, you can at least account for their value and with any luck, be compensated for their worth during the equitable distribution discussions.

In our next post, we’ll focus on some of the issues that arise when it come to the New Jersey child support guidelines and discuss how you can come to a fair and equitable settlement when discussing child support.  Until then, should you have any questions about divorce mediation or how mediation can benefit you, please feel free to contact us to schedule a free, no-obligation consultation to see if mediation is right for you.

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