Previously, we blogged about choosing mediation in a financially complicated divorce. As we discussed in that post, even though a complex mediation may take more time and involve more costs than a simple mediation, the proportional cost savings compared to litigating a case can make mediation a very attractive alternative. One of the major reasons financially complicated divorces tend to be more costly is the necessity of using experts. Choosing to use joint experts and abbreviated reports in mediation can result in considerable savings.
What kind of financial experts do couples going through divorce mediation typically need? While each case is different, the following list will give you some idea of what types of experts you might need, as well as exactly what each expert can do for you.
- Financial specialist. A financial specialist in a divorce case is usually an accountant or financial planner who has completed additional training on how to analyze and help resolve common divorce issues. The expert may have a special certification, such as the “Certified Divorce Financial Analyst” (CDFA) credential. People going through divorce sometimes hire an individual financial planner to help them take an inventory of their current assets and liabilities and identify potential steps to optimize their post-divorce financial situation. If you and your spouse choose to resolve your divorce issues through a collaborative process like mediation, you can jointly hire one financial specialist. That expert will help both of you understand the potential tax effects and other financial implications of your planned property distribution and any spousal or child support that one of you will pay to the other.
- Appraiser. If you need an accurate valuation of a significant item of property, such as a home, artwork, or jewelry, an appraiser with training and experience valuing the type of property in question can provide you with an expert opinion. Agreeing to use one appraiser with a good reputation rather than getting separate appraisals can save you money.
- Business Valuator or Business Appraiser. If one or both of you have an ownership interest in a business that is all or partly marital property, a business valuation is essential. Not only is a business a divisible asset in a divorce, but a business also usually produces an income stream that must be taken into account in calculating appropriate child or spousal support payments. Business valuators are usually CPA’s who specialize in analyzing the assets, liabilities, and capital of companies. They must be skilled in assessing both the economics of a particular industry and the factors that potentially impact the projected future performance of a specific business. Couples who litigate their divorce sometimes each hire their own business valuator, but business valuations are expensive. Agreeing to use one valuator can save you a considerable amount of money. You can save even more by agreeing to have your valuator prepare an abbreviated report, rather than the long and detailed full-scale report that would be necessary for litigation.
- Actuary. Actuaries are skilled in statistical analysis and can help you determine the present cash value of an asset such as a pension or a life insurance policy. Actuarial valuations are based on economic and demographic assumptions derived from long-term data. An experienced actuary relies on judgment as well as data to make predictions based on future contingent events.
- Employability or Vocational Expert. If your divorce involves a dispute regarding the employability of an unemployed or underemployed spouse, whether that spouse is a former breadwinner whose income has suddenly dropped, or a stay-at-home spouse who now needs to become fully or partially self-supporting, an employability expert can provide information regarding available jobs that fit the spouse’s education and experience, along with information regarding the likely salaries of such jobs. In contentious cases, each spouse may hire a separate vocational expert. In mediation, you can choose a vocational expert together and agree to abide by that expert’s opinion.
Are there any drawbacks to using joint experts? There could be—if you are dealing with a situation where a wide range of interpretations is possible. An expert you hire individually will generally make an effort to interpret any ambiguous information in a way that is favorable to your side of the case. Any benefit from this could be illusory, however, as your spouse’s individual expert will no doubt interpret the same information in your spouse’s favor. This kind of situation often results in splitting the difference to arrive at an ultimate conclusion that is similar to the opinion one neutral expert would have provided in the first place.
What if your divorce is complicated not so much because of your financial situation, but because you have a serious disagreement regarding child custody? Expert opinions can be helpful in that case as well. Check back here soon for more information on using experts to mediate a child custody case. In the meantime, we encourage you to read more about the mediation process in New Jersey. Please contact us with any questions.