Over the past few posts in the Equitable Mediation Services blog, we’ve discussed how using mediation for divorce can help couples in New Jersey peacefully divorce.  From the calculation of NJ child support, the creation of a comprehensive parenting plan and even working to agreement on an appropriate amount and duration for spousal support / alimony can all be done when using mediation for divorce.  In this the last article in the series, I’d like to discuss how the dividing of assets and liabilities (also known as equitable distribution) is handled when using mediation for divorce and offer some tips on what documents to begin gathering for those about to begin the process.

As a divorce mediator in NJ, it is my role to help couples work through all of the issues surrounding their divorce and equitable distribution is no exception.  People are often surprised to find that as a NJ divorce mediator I can help them move forward provided they are willing to work together in a collaborative manner and provide each other, as well as myself, with the information needed to make an informed decision.  These items include standard things such as tax returns, pay-stubs and W-2’s and are used to establish a basic level of income.  Then we add to the mix assets and liabilities such as houses, mortgages, credits, cars, auto loans, etc.  and last we seek out unusual items such as antiques, personal property and credit reports to round out the couple’s financial picture. We then use all of this information to produce a set of financial documents which we can use for our equitable distribution discussion.

The key thing to remember is that while equitable distribution is the division of a couple’s marital assets and liabilities, it doesn’t necessarily have to be a “50 / 50″ split.  The true definition of equitable distribution as any NJ couple using mediation for divorce can attest to is to be “fair and equitable” which is a theme that runs through all of the discussions we have in mediation.  Yes the law is important and there are rules that need to be followed but at the end of the day mediation is less about following rigidly what the law says and more about coming to an agreement that works for both of you and your children, when applicable.  Using mediation for divorce will allow you to have the conversations you need to have and gather the information you need to review in order to make an informed decision about equitable distribution or any of the other three main areas of divorce: parenting plans, NJ child support and spousal support / alimony. By working together and crafting an agreement that is unique to your particular situation, not only will you achieve a better long term result but you’ll also save yourself time, headaches and substantial sums of money in the process.

If you have any questions about divorce mediation in NJ using mediation for divorce or how hiring a NJ divorce mediator can benefit you, please feel free to contact Equitable Mediation Services to schedule a free, no-obligation consultation in one of our nine North or Central New Jersey office locations.  Or 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.

In the last article on the Equitable Mediation Services blog, we focused on how couples can use divorce mediation in NJ to put together an agreement that allows them to manage their parenting plans while they proceed with their divorce at their own pace as given financial pressures, they may wish to delay things for weeks, months or even years.    Today we’re going to focus on the equitable distribution of marital assets and liabilities and what issues couples can resolve while using a NJ divorce mediator to ease the transition of their financial lives during and after divorce.   As we said before, given the times we live in many of the couples we see at Equitable Mediation Services are under severe financial duress and not in a position to proceed right at this very moment but they still want to move things forward so they hire a NJ divorce mediator thinking it’s better to get this over with than to remain in limbo.  But what some couples are relieved to find out is that when they file is completely up to them.   Some people use this as an opportunity to make arrangements regarding their finances to they can get a handle on who will get what as part of the divorce settlement and their Memorandum of Understanding and they can plan their lives for the future.  Then, when they are ready to proceed, they file knowing full well which of the assets and liabilities each of them will have as part of their equitable distribution.

As you know, one of the most difficult things any married couple faces is the sharing of household finances.  Over the years you probably opened numerous joint bank accounts, credit cards, took a mortgage in both of your names, bought property and shared retirement assets through your 401(k) or pension.  All of these items take time to value and divide so coming to see a NJ divorce mediator prior to having the conversation and filing can be a big help in easing your financial transition.  Face it: you can’t have this talk on your own as like the old saying goes: what’s the number one thing couples fight about?  Money! In our time together we will create a balance sheet and budget for both of you as a married couple as well as for your future lives as single people and use that as a the basis for our discussion, dividing assets and liabilities fairly and equitably.  Remember: NJ is not a 50 /50 or community property state but rather an equitable distribution state which allows couples to divide their assets and liabilities as they determine is fair to each party.  We will also order valuations of major assets such as real estate or pensions and factor this in as well as getting these reports takes time and does have a major impact on what one’s bottom line will look like.  We can then put it all together to give each of you a complete financial picture of what you look like as a couple and what you will look like as individuals.

In our next article, we’ll discuss the moves you can make with regard to child support and spousal support / alimony and conversations you can have in order to begin the process of calculating the appropriate amounts of each and planing for your and your children’s financial future.

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If you have any questions about divorce mediation in NJ or how hiring a NJ divorce mediator can benefit you, please feel free to contact Equitable Mediation Services to schedule a free, no-obligation consultation in one of our nine North or Central New Jersey office locations.  Or 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.

In today’s economy, many of the couples we see at Equitable Mediation Services come to us with a rather bleak financial picture and it’s no surprise given the news we hear every day.  With jobs hard to come by and the housing market still suffering losses, many divorcing couples are faced with the unenviable task of dividing liabilities rather than assets and are finding coming to an equitable distribution agreement to be more difficult than in years past.  Typically divorcing couples expect that once they “clear the decks” and sell the marital home, each of them will have a lump sum of cash to start over but sadly with today’s housing market, it’s usually not the case.  As a New Jersey divorce mediator the Memorandum of Understanding (MOU) I am drafting for client couples typically contains a balance sheet which lists all of the couples assets and liabilities and shows how each will be divided.  Think of it as a “divorce mediation worksheet” that outlines your overall financial picture as a married couple.  Working together, we discuss how each of the assets and liabilities will be divided and work to come to a fair and equitable agreement that each of you feels meets your needs and goals as you move forward into your new separate lives.  But what happens when all you have left is debt and neither of you wants to move forward or one of you feels you should get all the assets while the other is left with all the debt?

A simple rule of thumb when it comes to equitable distribution is with the asset, too goes the debt.  For example, let’s say a client couple owns a home jointly and has a mortgage on the property.  If during equitable distribution discussions, it was agreed by both parties that the wife was going to get the marital home as part of the settlement, then with the home would also go the responsibility of the mortgage.   On the balance sheet, we would then use the market value of the marital home and list that in the assets column and the take the outstanding balance of the mortgage and list that in the liabilities column.  The difference is what the wife received in equitable distribution.  As we previously discussed, sometimes the value of the home is “underwater” whereby it’s market value is less than what a couple owes on it.  In this case, the client couple would also need to discuss if the wife needs to be compensated with some other assets (or similarly trade off some other liability) in order for the couple to agree the equitable distribution is fair and equitable.  Remember: equitable distribution does not necessarily mean one party will receive a positive asset or cash it just means that each party has what they consider to be a fair and equitable distribution of both marital assets and liabilities, even if that means you are both in a negative equity position. Confused?  I could see why but don’t be.  As a New Jersey divorce mediator, it is my job to help you and your spouse sort through all of your assets and liabilities and draft an agreement that allows each of you to move on with your lives even if it means coming up with a creative solution that only mediation can provide.

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Joseph Dillon is a Professional Accredited Divorce Mediator in NJ and the owner of Equitable Mediation Services a New Jersey divorce mediation practice serving Northern and Central New Jersey, Somerset, Mercer, Middlesex, Essex, Morris, Monmouth and Hunterdon counties including the towns of Edison, Parsippany, East Brunswick, West Orange, Bridgewater, South Brunswick, Hillsborough, Livingston, Randolph, Maplewood, West Windsor, Summit, Plainsboro, Millburn, Morristown, Montgomery, Madison, Readington, Branchburg, Warren, Princeton, Metuchen, Lawrenceville, Pennington, Short Hills, Bernards, Bedminster, Colts Neck, Holmdel, Roseland, Montclair and surrounding areas.