• calendar14th Jan 24 10:00 pm
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The Financial Implications Of Divorce Mediation: A Detailed Examination

Divorcing couples in Colorado should consider the pros and cons of divorce mediation before launching into their negotiations. Many spouses see only the potential upsides of this alternative dispute resolution process, without taking into account its numerous potential financial implications down the road. Divorce mediation may affect the economic security of spouses in many ways, and it is important to envision the long-term consequences of each agreement, concession, and compromise that occurs during the negotiation process. The suitability of mediation depends to a large extent on the unique set of factors that surround each divorce. An experienced Colorado divorce attorney can help spouses determine whether mediation is truly the most appropriate option for their circumstances. Spouses can learn more about the financial implications of divorce mediation by scheduling a consultation with the Colorado Divorce Law Group. Call (720) 593-6442 to get started today.

What Is Divorce Mediation in Colorado?

 

Divorce mediation is a form of alternative dispute resolution. Mediation is considered an “alternative” because the default method of resolving divorces is litigation. The divorce litigation process occurs in a public family court, and it takes the form of a divorce trial overseen by a judge. In contrast, mediation occurs in private. In this process, overseen by an unbiased, neutral mediator, both spouses seek to resolve their differences through productive, collaborative discussions. The end goal of divorce mediation is an agreement that both spouses sign and bring before a family law judge in Colorado. If the family law judge approves the agreement, it becomes legally binding. This contract may address the various elements of a typical divorce, such as:

 

  • Property division
  • Spousal maintenance
  • Child custody
  • Child support

 

Litigation vs. Mediation: How Do They Affect Financial Matters?

 

Litigation and mediation have varying effects on a number of divorce-related financial issues. While the costs of the process itself tend to be lower in mediation than in litigation, there are a number of potential implications that each may have on future expenses, for both partners.

 

Litigation vs. Mediation: Which Is Cheaper?

 

The general consensus is that, on average, mediation represents a cheaper option for divorcing spouses in Colorado. The costs of managing a potentially lengthy divorce trial, attended by clerks, judges, administrators, and other legal professionals –– in addition to the divorcing spouses’ own attorneys, if they choose to work with representation –– are typically greater than those associated with organizing a private discussion between a mediator and two spouses. Not only does mediation typically cost less to facilitate compared to litigation, but it may also take less time to complete. Various delays can cause divorce trials to drag on for months or even years, with spouses continuing to pay legal fees throughout this period. In contrast, mediation can theoretically conclude within a few weeks.

 

While all of these factors make it probable that divorcing spouses will face lower process costs for mediation than for a divorce trial, partners considering mediation as their path should also keep in mind that sometimes negotiations do fail. In such cases, spouses have no choice but to pursue litigation, after having wasted additional funds on an unproductive mediation process. Spouses who envision little chance of productive, good-faith negotiations may wish to speak with an experienced family law attorney at Colorado Divorce Law Group to discuss whether mediation is truly worth their time and money.

 

Litigation vs. Mediation: How Do They Affect Spousal Maintenance?

 

According to the Colorado Judicial Branch, spousal maintenance (alimony) follows predetermined guidelines based on various factors, including:

 

  • The financial situation of each spouse
  • Age and health of both spouses
  • Duration of the marriage
  • Lifestyle during the marriage
  • Any other factor the court deems relevant

 

In divorce mediation, however, spouses can tackle the issue of spousal maintenance in a much more flexible manner. They are not constrained by the normal formulas and procedures seen in litigation, and they can create a spousal maintenance plan of their own choosing. This may lead to positive or negative financial implications for either spouse. Mediation could theoretically remove all support obligations, despite the fact that a spouse would have received maintenance after a normal litigation process. On the other hand, a spouse who might have been entitled to very little in a traditional divorce trial may receive a greater amount of support as a concession during the mediation process. In both cases, the outcome might relieve financial burdens for one spouse, but heighten those of the other.

 

Litigation vs. Mediation: How Do They Affect Property Division?

 

The same general logic applies to property division. In litigation, there is a clear distinction between separate property marital property. In an equitable distribution state like Colorado, the court takes into account various factors when determining the property division process. In Colorado, these factors commonly include:

 

  • Contributions of each spouse to marital property
  • The financial situation of each spouse
  • Which parent has primary custody
  • Retirement assets
  • Separate property of each spouse

 

In mediation, the spouses are under no obligation to follow the same set of rules. They can create their own property division plan that supersedes the equitable distribution process in Colorado. Therefore, it is possible for a spouse to walk away from the negotiation table with fewer assets than they would have received after normal litigation. Of course, it is also possible for them to walk away with more assets than they would have received via a divorce trial.

 

Litigation vs. Mediation: How Do They Affect Child Support?

 

Child support is one of the few financial aspects of divorce that may be difficult to personalize with an alternative dispute resolution process. According to the Colorado Judicial Branch, minimum child support calculations are made according to a relatively strict formula in order to uphold the best interests of the child.

 

While the bare minimum of child support is always guaranteed by family courts, mediation may facilitate certain payments above and beyond the normal baseline calculations. Parents may agree that child support should continue past the age of 18 in order to cover college tuition, or they may agree on priorities for funding extracurricular activities. The family court does not have the authority to enforce any arrangement beyond adulthood, but a separate contract could make these payments, and their expiration dates, legally binding.

 

Power Imbalances During Divorce Mediation in Colorado

 

As in any other state, there may at times be power imbalances between spouses during divorce mediation in Colorado. One spouse may have more financial knowledge than the other, and this knowledge in some cases may surpass even that of the mediator. Using this greater understanding of complex financial issues, the spouse may present arrangements that at first seem mutually beneficial. In reality, however, these arrangements may only serve their interests. This can lead to negative consequences for a spouse who exits divorce negotiations only to discover that they now face serious tax bills that were not clarified during the mediation process. These power imbalances can be addressed and prevented by the formulaic, standardized nature of divorce litigation in many cases.

 

Reach Out to a Divorce Attorney in Colorado

 

While divorce mediation is popular, it may only be suitable for certain divorcing couples. Each divorce is slightly different, and internet research provides general guidance that does not take into account the needs and priorities of individual spouses. To learn more, consider reaching out to the Colorado Divorce Law Group. Under the guidance of this law firm, spouses approaching divorce in Colorado can choose the most appropriate option to resolve their divorces based on their unique circumstances and individual needs. Call (720) 593-6442 today to begin the discussion.