Divorce mediation is a process that requires transparency, equality and a level playing field in order to facilitate a successful resolution.
Balance of Power
It is common for one party to hold all the cards when it comes to financial knowledge and power in a marriage. We have the economic theory of comparative advantage to thank for this reality.
Comparative advantage at its simplest says the person most suited for a task should be the one to perform it or risk wasting valuable economic resources. In a marriage this means the spouse most skilled in financial management, most interested in financial issues or most concerned about their financial future will take over management of the family finances. Sometimes, especially in the marriages of two busy professionals, it comes down to simply giving the tasks to the spouse who has the time. Trust is abundant during happy marriages and the non-managing spouse will often not be a part of the day-to-day budget and investing decisions, instead choosing to trust their spouse has it all under control.
Like it or not, this kind of decision-making creates a power imbalance unless the couple regularly works together to keep one another in the loop. Unfortunately we know from experience this rarely occurs. We also know from experience and research that financial disagreements are the most common disagreement leading to divorce. We have to keep in mind all of the emotional undertones of money. Money means power, safety and security and allows American families to buy, borrow and save for the things they believe will make their lives and the lives of their children more comfortable such as nice homes, iPads, automobiles and organic food.
When a power imbalance begins to develop, these emotions start to come to a head. A woman anxious about her family’s financial security may start to remedy the power imbalance later in life by asking the questions she never cared to ask before.
- How much is in our retirement savings accounts?
- How are the funds invested?
- Are we on track?
- Do we have a financial adviser we trust?
A man anxious about how the family bills are paid may want to engage in tasks previously left to his wife.
- Can I look at our budget?
- How much credit card debt do we have?
- How much do we spend every month?
Marriages end when these questions begin to come up because many couples lack the tools to navigate the difficult conversations, especially when one person’s expectations are not met when they get answers.
Divorce Mediator’s Job
When one party in a divorce holds all the financial data and knowledge it creates a major power imbalance. A divorce mediator’s job is to level the playing field for the couple. What may have been acceptable during marriage when trust was prevalent doesn’t pass muster in divorce financial planning. In order for a couple to successfully navigate a divorce mediation they must have the same information from which to make decisions. Transparency must be mandated by the divorce mediator and the mediator must help to create this transparency where necessary. This may mean
- assisting in the gathering of financial data and documents,
- facilitating conversations between the parties,
- engaging other financial professionals to assist in educating clients to level the playing field
If a mediator is unable to provide this balance of power and create a level playing field for clients to operate from in a divorce mediation the parties may struggle to meet minds on the financial picture. You may even start to distrust the other’s intentions and leave the divorce mediation process seeking an advocate who will level the playing field through formal financial discovery such as depositions and subpoenas.
Wellspring Divorce Advisors Can Help
If you are navigating mediation and feel at a disadvantage when discussing financial issues, Wellspring Divorce Advisors can act as a consultant to the divorce mediation process and help to level the playing field so you can negotiate the most financially advantageous settlement possible. We also have trained mediators who can work as a financial issue specific mediator during your divorce mediation.