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Divorce and Your Money - #1 Divorce Podcast

Visit us at www.DivorceAndYourMoney.com Divorce and Your Money is your guide to avoiding costly mistakes during divorce. Shawn Leamon, Certified Divorce Financial Analyst and MBA, wants to help you learn the fundamentals of how to get a divorce. Whether you are looking for an uncontested divorce, a do it yourself divorce, or an online divorce, resources are available to offer guidance. Through his divorce podcast and divorce blog, Shawn offers his professional opinion on the best ways to handle the end of your marriage. He covers topics including how to file for divorce, divorcing a narcissist, and finding the best divorce attorney. Even tricky subjects such as a “what is a QDRO?” and “is alimony taxable?” are tackled through these venues. If you need to know what the first steps are or what you should do to head to trial during litigation, you can find resources to give you a step-by-step guide to what comes next. Think of his advice as an alternative to divorce support groups where you can find exactly what you need when you need it. He offers one-on-one divorce coaching to give you a solid grasp on the decisions that are bound to affect your financial future. Before you have a divorce decree in hand, you will likely go through some type of divorce mediation. For any spouse saying, “I want a divorce,” you need to make sure that you are getting the financial future you are entitled to. Do not allow yourself to be blinded by the emotional, legal, and financial burden that divorce can become. Instead, take control of your situation with sage wisdom to help all individuals make better financial decisions for their independent future. If you find yourself asking “where are the best divorce lawyers near me?”, Shawn can help you to recognize the best of the best. Whether you need a divorce in Texas, a divorce in Florida, or a divorce in New York, you will have all the knowledge you need to find the best team of professionals to assist you. You can start from a place of being legally separated or once you have already started to file for divorce using free divorce papers or an attorney. No matter where you or your marriage may be in the process, Shawn Leamon has professional advice to offer your unique situation. A simple no fault divorce or a high-stakes power struggle are all areas he has vast experience with during his work outside of Divorce and Your Money. Let his advice be a guide to help you get all that you need for a secure financial future in your divorce records. It will not make a difference whether you are getting a divorce in Ohio or a divorce in California if you are following the basic principles set out through Divorce and Your Money’s divorce blog, divorce podcast, and divorce coaching.
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Now displaying: April, 2018
Apr 25, 2018
Visit us at divorceandyourmoney.com for the #1 divorce resources in the United States and get personalized help. Learn about coaching services here.
 
Thank you for listening! Find a transcript of this episode below.
 
In this episode, I'd like to discuss mediation. It's something like 95% of divorces, roughly, depending upon the statistic that you read, are settled out of court. Mediation is one of several ways you can settle divorce out of court.
 
Now, you can do what's called a do-it-yourself divorce, which means you and your spouse just work everything out yourself, you prepare the papers, submit them to the court, and you get divorced. You could have collaborative divorce, which is an option for you as well, which is a specific divorce process. You can look it up. There's episodes on it in the archives of this show as well. You can do what's just called a negotiated settlement, which is also common, which is where you and likely your attorneys will go back and forth and figure out and reach an agreement. Hopefully a reasonable on, and hopefully in not too much time, and you talk through with your attorneys, and you settle things.
 
And then there's mediation, which could be a part of many of the other options I already mentioned, but it is its own process, and it can help you stay out of court. Actually, in some states, depending upon where you live, they actually have court mandated mediation, meaning before you go in front of a judge or have the opportunity to go in front of a judge, the court mandates you go to mediation in advance.
 
But in this episode in particular, I want to discuss some of the downsides of mediation because, on the surface it, can sound like a great thing to do. I am a big believer in mediation when it works for you, but there are some things you have to be aware of and there are upsides and downsides to every part of the process. Actually, one of the things that I do a lot of thinking about when I get to work with you is are you thinking about things from your spouse's perspective as well? Not because I'm going to be defending or working with your spouse, but if you look at things from his or her perspective, you might be able to come up with a much better settlement that's better for all parties involved than if you only are coming from your self interests and not thinking about what might work for them or what their attorney might say.
 
The reason I want to bring this up in the context of mediation is that on the surface it sounds great. You might have had a friend who went through mediation and it perfectly resolved their divorce, or you may have heard about it or your attorney may have recommended it, or whatever the case may be, but I want to talk about some of the downsides to mediation. But before I get into those downsides, let's talk about what mediation is.
 
I want everyone on the same page and in mediation, now, there are some variations, but the idea is basically you and your spouse and a neutral third-party work things out in your divorce, any sticking issues or maybe all of the issues, to hope to help you get to a resolution. Now, when you go to mediation, there's a neutral third-party, as I said before. It could be a retired judge. It could be a professional mediator. Actually, one of the attorneys I work closely with, he shares an office with a professional mediator, and they have a conference room, and you can see them hashing out days of mediation.
 
So usually who's there, it's going to be you, your spouse, a mediator, and then both of your attorneys, most of the time, and this where we're going to start getting to some of the downsides, but we'll get there in a minute. One of the things that's very important as well is when you go to mediation, or the objective, I should say, is to come up with a resolution to your divorce. Therefore, you should be cognizant and prepared for your mediation the same way that you would prepare for a trial. Now, mediation is far less intense, at least in terms of, I won't say it's less intense emotionally because mediation can be very draining, very high stakes, and there's a lot going on, but it's less intense in the sense that there's a nonbinding process, typically, with most mediations. If it's not working, then you don't have to come into an agreement.
 
Where there's enormous stress involved in the court processes, you have a random judge who cares very little about you in most cases. Nothing against the judges, but if you're sitting and you've been practicing law for decades and you hear every family law story and one attorney creates a crazy story for their client, and the other attorney creates a totally opposite story for the other client, it's hard to really come with an informed decision. You often also have very limited time in the court setting to work out whatever issues you want to think about. And so, when you go to court, the stakes are very high because those decisions are final. I guess you can appeal in some cases, but they come with a lot of pressure. Whereas mediation, you want to come as prepared as you might for a trial, but the pressure level is a little bit lower.
 
But anyways, I digress. I have a tendency to talk quite a bit. It is a podcast, I suppose. But I want to discuss the downsides of mediation. I want to discuss three things in particular that people don't always consider when it comes to mediation.
 
The first is that when one spouse is not participating in good faith. The second is that mediation can be very expensive, and the third is that, I already touched on this a little bit before, is that mediation doesn't replace a judge and mediation is nonbinding. So let's jump into each of those three points very quickly.
 
The first is that what happens if one spouse is not participating in good faith. This is actually one of my biggest frustrations with the divorce process. I think anyone who's dealing with it, the divorce process, a.k.a. everyone listening to this show, you know that a lot of things about it don't seem right. Most of you listening are just trying to get what's in your best interest and a fair settlement and move on, and make sure that you get enough to live a life, the best life you can after the process. But when you start going to mediation, oftentimes we're dealing with, I'll just call, an irrational spouse. The spouse that really is either distrustful of the mediation process or just has such unrealistic expectations that mediation is not going to be productive.
 
Unfortunately, I see it all the time. What happens is usually the person that I work with because I'd say almost everyone who books a coaching call with me understands what's going on. You might have substantial questions about particular issues, but you get the process. You're well-informed, and you get the general gist, but you have some questions or clarifications. You're facing a big decision and you want to know a second opinion or a third opinion, sometimes in my case, or just see if what's in your head or what you're hearing actually makes sense. Well, the challenge in mediation is when you go and you show up to mediation and you show up with your attorney, you're prepared, you know what you want, you're ready for the negotiation, but your spouse is so unrealistic and uncooperative or just doesn't get the whole process, you can end up in a position where, well, you don't get anywhere. Unfortunately, you end up in a spot where the day of mediation is completely wasted.
 
If you know that your spouse isn't going to work with you to try and resolve some of these issues, then you are not in a good spot. You need to really question is is it worth even showing up in the mediation or is it going to be a waste of everyone's time?           
  
Now, the second issue with mediation is that it is expensive. Mediation is not cheap at all. Here's why. When you go to mediation, you usually do it for a day or a half day of a session. Something like that. You book a mediator. So you're paying however much a mediator's hourly rates are. It could be a couple hundred dollars an hours. It could be several hundred dollars an hour for a mediator. And so, if you think about an 8-hour day, you could be spending a few thousands dollars on the mediator alone.             
 
Then you are bringing your attorney. You are now paying your attorney's hourly rates for a whole day. It's not like the 15-minute phone call. It's not like the couple hours to prepare a document. This could be a full day of your attorney's full rate in hourly fees. Not only your attorney, your spouse's attorney. And so, it's you, your spouse's attorney, your attorney, your spouse's attorney, so it's at least five people participating in the mediation process for a day.
Now, if mediation does not resolve itself in that day, and it often does not, you're going to be doing that times many days. I know people and many of you listening could end up spending at least three or five thousand dollars for a day of mediation, but could be many times that. If you have to have multiple mediation sessions, you can look at bills in the tens of thousands of dollars very quickly just from the mediation process. And now, what if you bring your accountant with you? Or what if you bring a business evaluation expert with you? What if you bring a vocational expert with you? What if you bring any number of potential experts with you during the process? Well, unfortunately, that only adds to the bill.
If you're not getting anywhere in the mediation process, and I see it happen, unfortunately, as I said, every day, where people go and they make no progress during mediation and end up spending thousands, if not tens of thousands of dollars, in the process. Well, guess who wins? Not you, but your attorneys and that is the situation.
 
Mediation can be expensive, so you need to be aware of that going in and make sure that it really is going to be fruitful for you.
 
And then finally, the last thing I want to bring up is that mediation is non-binding. You're going to understand that all three of these points are closely connected because mediation doesn't lead to a final ruling. I tell people this all the time when you come for a coaching call. A lot of times, you come for a coaching call and either you're a few weeks out from mediation or it's about to happen tomorrow, whatever the case is, but I'll say like, "Look. You gotta understand that if you're in the mediation room and things are not going your way and you're going towards the approach of a wholly unacceptable settlement, mediation is, generally speaking, non-binding. So if it doesn't look like things are going to go your way, or at least in a reasonable direction that you can live with, you don't have to be forced to sign that agreement in the moment with all the emotions flowing and the adrenaline and everything else going on.”
 
When it comes to the mediation being non-binding, that has the potential opposite effect as well for your spouse, which means that if you're coming to an agreement or you think you're going in a good direction, and all of a sudden, your spouse just says, "Screw it. I'm not that interested in this deal. I don't like it." Well, guess what? You don't come to a deal and that time has been, I don't want to say wasted because it's not always wasted, but kind of. You're not getting that money back.
 
That's a part of the process that you really have to understand. It's different. There is something called binding arbitration, which is used oftentimes in commercial disputes, commercial cases, but a little less common in family law. I don't see it too often. That and those cases, whatever the mediator, or in this case they call it the arbitrator decides, is final, but in a divorce situation, that's not the case. You should just be informed. That's the goal of this podcast always is to make sure that you understand all sides of the issues so that you can make the best decision for you.
 
The three downsides to mediation, again, I'm just going to sum them up real fast before departing. The first is that one spouse may not be participating in good faith. Second is that it can be expensive and third is that mediation is non-binding and it's not like going in front of a judge where a judge's ruling is final. It is a non-binding process and that comes with its own set of downsides.
Apr 18, 2018
Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help. Learn about coaching services here.
 
Thank you for listening! Find a transcript of this episode below.
 
I'm going to start off this episode with quote from Yogi Berra, or at least it's attributed to Yogi Berra, and he said, "You've got to be very careful if you don't know where you're going, because you might not get there." The reason I read that quote is because one of the first questions as soon as a divorce process either hits you in some cases, or if you're planning for it, or maybe if you're in the midst of it already, one of the first questions or one of the main questions you should always keep in mind is, what do you want? What do you really want during the divorce process and after it's over?
 
If we have a coaching call together, it's actually one of the questions I usually ask people on calls, and it's really just to try and figure out, well, do you know what you want out of life? The divorce process is going to be over. So are you making decisions during the divorce process that will help you for the rest of your life? Also, what do you want out of the divorce process itself? So one of the things you should be doing, regardless of if you're about to sign the settlement papers or you haven't filed for divorce yet but you know it's coming, or you're in the middle of divorce, doesn't matter, one of the most important things that you can do as part of this process is really set your goals. When I say set goals, I want to put them into two contexts.
 
Goal number one, or set of goals number one, and I like to make goals pretty simple, so I usually just do three things, I do these myself, I'm not going through divorce, but I do them for other things, like as I think about what I want for the podcast, for instance, I have goals for the Divorce and Your Money Show and how many people I can help. But you set three goals. You put your top three priorities or goals on a sheet of paper and you say, "Hey, priority number one ..." And these are my goals, or your goals in this case, for life. So as you think about, "Well, what do I want in life?”
 
If you are going through the divorce process, most of the people I talk to, let's just say you're 60 years old for sake of discussion, and in good health, statistically you've got another 20 to 30 years of life ahead of you, maybe longer. So you have a whole ton of life to think about. What do you want out of those 20 to 30 years? Or if you are one of my younger clients and you're 30 years old, well, you might have 50 to 60 years. The divorce process is only going to last hopefully a few months or maybe a year or two, but then you're going to have decades of life to think about.
 
As you sit down right now, what are the three things that really matter most to you? Could be something having to do with a fulfilling job or financial security, or something for your kids, or being able to travel, or whatever your life goals are, write those three things down and figure out what kind of future you really want. This is independent of the divorce. You assume the divorce is over and you're just living your life. What does that look like to you? I put those on a piece of paper and I review ... You should be reviewing those goals at least, I think, every day, and I'm going to tell you why in just a bit.
 
The second thing, the second set of goals that you should be putting down is, what are the goals for your divorce? Now, I get to speak with you every day on a coaching call, and I hear a range of thoughts about the divorce process and what you want out of it. Sometimes people will call and they'll say, "I want every asset ever and that's what we're going to do." Other times people say, "Well, I just want this to be over. He or she, my spouse can have everything. I just want this to be over with." Then there's everything in between, where some people say, "Well, I understand, even though of course I want everything, I understand how this process is going to go and I want something that's a fair and reasonable settlement, all things considered.”
 
Well, whatever your situation is, you need to sit down and think, "Well, here are my three divorce goals." Some of the divorce goals might be involving custody arrangements or support arrangements, or debt, or what kind of assets you have afterwards and after the process is over. One of the things is, is you want to write these down. I say top three because three is easy to do. You do your top three goals from your divorce. You can do 10 if you want. But I like top three because it really forces you to select your priorities.
 
 So here's what happens after you have those three goals. So you're going to have two sets of goals, one set of life goals and one set of divorce goals. What you should be thinking about during the divorce process is, how do I make decisions today that get me closer to those goals? Now, everyone that you work with as part of the divorce process should have a good sense of your goals, because if your attorney knows what your life goals are and what your divorce goals are, he or she can structure a divorce settlement that helps you get closer to those goals. If you tell me your goals, and you don't have to tell me, most of the time I'll ask you, particularly if we're working on a more in-depth case or situation. Sometimes people call with a very specific question and we go through the specific question. But if we work on a longer term basis, I'll ask, "What do you really want? And how do we get you closer to those things? And how do we come up with a strategy and daily steps to move you closer to those goals?”
 
So one of the things that you need to be doing is sharing those goals with everyone that you're working with. And another thing that's important about your life goals and your divorce goals, particularly the divorce goals when it comes to sharing them, is, sometimes we'll say, "That's not realistic." Either realistic or not realistic, or a bad idea. So sometimes someone will come and they'll say, "I want every asset. I don't want my spouse to have anything after the divorce." I'll say, "You know, I understand that's a goal of yours, but that's not realistic, because if your spouse has a semi-competent attorney or if you go in front of a judge, no one's going to let that happen except in the most extreme of scenarios. So you need to adjust your goals.”
 
Conversely, sometimes someone will say, "You know what, just give my spouse everything, I'm just going to start fresh, and I just want this over next month and we're going to move on." I'll say, "Hey, you could do that if you want, but that's not a good idea, and here's why." Ultimately the goals are up to you, and you might want to adjust your goals a little bit. So the point is, is one of the reasons you write these down, you share these goals, is so that everyone's on the same page working for you.
 
Now you have your two sets of goals, and you start figuring out what you really want. What happens is, if people know what you want, people like me or like your attorney, or just you yourself having clarity as to what you want out of the divorce process, you can start taking actions and creating step by step actions to achieve those wishes, those wants, those goals, that direction that you want. So whenever an issue comes up, particularly as part of the divorce process, you're going to faced with some major issues about assets, about kids, about life, and these are substantial questions. Well, when you have your goals, when you know what you want, you will have a north star to help guide you. Basically, when you're facing a particular issue as part of the divorce process, you can say, "Well, does this fit into my life goals? Does this fit into my divorce goals?" If it doesn't, then you need to make ad adjustment or take a different action. Or if it does fit in the goal, you can say, "Yeah, you know what, this is what I was aiming for.”
 
But if you don't have your goals and you don't keep those high level things in mind, you could end up running down a path that you never intended to take. Or, as I started with the Yogi Berra quote, "You've got to be very careful if you don't know where you are going, because you might not get there.”
 
The other thing I want to leave you with as you think about setting goals and deciding what you really want out of both life and out of the divorce process, you need to have some flexibility. So one of the most important things and one of the most fun parts of my job, and yes, I do have a lot of fun, I get to help people with very hard questions, I know that you're in a difficult situation, but everyone I work with is a good person who finds himself in a tough spot, so one of the questions or one of the things you have to keep in mind is, there isn't a fixed path to your goals and sometimes you need to have, or all the time you might need to have some flexibility regarding them.
 
So I'll give you a very concrete example. I'm going to keep it generic but concrete. Let's just say you want to have enough support, enough spouse's support to live comfortably for the next 12 months while you get yourself on your feet and find a job. Just using that as an example. Well, you might be thinking in your head, "Well, I need $3000 a month in support to achieve that goal." Well, that may be true, that might be one way to achieve your goal. But what if there is another way? What if that other way was, you got a lump sum payment for $34000, which is a little bit less than the monthly amount, but you have it all upfront, and you have the money to live on and you've achieved the same goal of that financial security for a year, but it came in a different form?
 
Or what if you ended up with a house that's fully paid for or close to it and therefore your living expenses are lower than you anticipated because you don't have to go find a new place, and instead of $3000 a month you only need $1500 a month? It's about flexibility. In all three examples you've gotten to your goal of being able to live comfortably for the next year, but there were different paths to get there.
 
So when you think about your goals, and as I said, that's a very micro example, but for any goal, whatever it may be, you have to realize that there are different ways to achieve what you were looking to achieve. So having flexibility is very important when you think about your goals, because they don't always happen the way that you originally had in mind. But just because they didn't happen exactly the way that you thought they were going to happen, doesn't mean they're not going to happen. It just means that you need to be open to alternative solutions and alternative ways to getting what you want to get to and have out of life and out of your divorce.
 
So as you think about the divorce process, really sit and start by asking yourself, wherever you are, what do you want? Are the decisions you're making right now setting you up to get to that point that you want later down the line? If you keep that question in mind, and I actually, believe it or not, I have a daily email that comes to me every morning, it comes at like 3:00 AM, so by the time I get to my desk, whatever time I get to my desk, I usually get up pretty early, but I have a daily email that says, "Here are my goals." And I get to look at those every morning and then I look at my schedule and what I plan on doing today, and I say, "Hey, does this take me one step closer to my goals?" If it does, then great. If it doesn't, then I'm working on the wrong thing. So I keep those in mind for myself.
 
It is something that you should be doing as well, to make sure you stay on the right path and make sure that you are getting what you want out of this process.
 
 
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