High Net Worth Divorce Mediation

Ten Reasons Why, If You Have a Complex High Net Worth Divorce ,You Should Consider Mediation

“The gratification of wealth is not found in mere possession or in lavish expenditure, but in its wise application”  – Miguel de Cervantes

High Net Worth Divorce Mediation

Men and women who possess high net worth,  significant family assets, complex business interests, real estate holdings and other financial assets are often told that they need to hire the best, most aggressive and most expensive lawyers and go to court in order to fairly divide complex marital assets.  Some high net worth divorce cases undoubtedly require litigation.  However, for most high net worth families running to court is a mistake.   Here are 10 reasons why mediation with a mediator experienced in complex financial matters will work better than an adversarial  divorce in court.

  1. TIME: Complex financial issues require analysis and time.  Neutral analysis of each asset and liability in a mediation setting will be more thorough, yet take less time. An attorney in court must advocate for his/her client and present all finances in a light most beneficial to his/her client.  The other side must do the same.  The result?  A lot of time is wasted on posturing with the judge, or rather the judge’s court attorney, struggling to get to the bottom of what the assets actually are and how much they are worth.
  1. FINANCIAL SAVVY AND EXPERIENCE: A seasoned mediator, who regularly deals with complex high net worth divorce issues can effectively help the parties evaluate and divide their assets and liabilities.  Most judges do not possess extensive experience to do so, and neither do their court attorneys.  Instead, they rely on being educated by the parties’ lawyers, who, as noted in item #1, spend a lot of time posturing on behalf of their clients.
  1. NEUTRAL FINANCIAL EVALUATORS:  In a mediation the parties can be more creative about the types of assets they want to value, how to value them and how to address the cost of these evaluations.
  1. CREATIVE SOLUTIONS:  An experienced mediator can help the parties come up with “out of the box” creative ways to divide their assets in view of their needs and interests.  Participants in the adversarial court system tend to pigeonhole each case based on a familiar precedent without taking the time to tailor the solution uniquely to the needs of this family.
  1. TAX IMPACTING AND ANALYSIS:  High Net Worth divorces usually require an extensive use of tax analysis to understand how the division of a house, a business, a stock, or another asset will be taxed.  It is critical to spend the time with the mediator and necessary tax professionals to ensure that the agreed upon division does not have an unintended unfair tax result.
  1. COUNSEL FEES:  Regardless of how long the mediation takes, its cost will likely pale in comparison to the cost of a litigated high net worth divorce.
  1. QUALITY OF THE SETTLEMENT AGREEMENT:  In mediation the parties have more time to tailor a comprehensive separation or settlement agreement, which must address tax impacting on the transfer of assets, costs of the transfers, appropriate processes for transfer of the assets, ongoing spousal support provisions and other matters unique to the high net worth divorce.
  1. FINANCIAL EDUCATION OF THE LESS FINANCIALLY SAVVY SPOUSE:  Particularly in high net worth divorces, with complex financial issues, a less financially savvy spouse needs to be educated about the extent of the assets and also about the ways in which he or she needs to manage them after the divorce.  In a standard litigation, the court does not educate the parties about finances.  Their lawyers represent them and explain only what they need to know in order to make a decision in the case. Once the case ends, each person must manage his/her own finances, whether or not he/she is capable of doing so.  In a mediation a person’s ability or willingness to actively manage finances, run a business or manage real estate holdings can get explored and can become a factor in that person’s decision on how he/she would like to receive the share of marital assets.
  1. PROBLEM-SOLVING ATMOSPHERE: In a high net worth divorce, it is even more critical for the parties to engage in negotiation in a problem solving, rather than an adversarial environment.  It takes time to understand the finances, but also the parties, given their pattern during the marriage, may objectively evaluate and discuss their own ability and willingness to handle assets.  Does the wife want 50% of the businesses? Or is it better for her to simply receive sufficient funds each month with the husband continuing to manage them?  Does the husband want to manage all real estate holdings, or will this responsibility be divided as the parties divide their real estate assets?  Is the person who will continue to manage going to be compensated for doing so?
  1. MOVING ON POST-HIGH NET WORTH DIVORCE:  Chances are, high net worth couples will often continue to maintain some types of business and personal ties post divorce.  It is therefore imperative, that they are able to maintain a working and civilized relationship, which is often destroyed by a hostile court process.

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The Law Firm and Mediation Practice of Alla Roytberg, P.C.

Manhattan Office
43 West 43rd St., Suite 83
New York, NY 10036
Telephone: 212-582-5757
Fax: 888-293-7930
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