When we last saw Gerry and Beth, they had decided to try marriage counseling. In the meantime, however, Beth is also meeting with an attorney to help her understand what they would need to address in a divorce. Gerry is holding off on talking to an attorney, but he has done a little research on his own. He too is concerned about how they would resolve their financial issues. Today we will consider how divorce mediation might help this couple.
Financial Backdrop
As we learned in our introductory post, Gerry currently earns approximately $150,000 per year as the CEO of a small company. Beth, who spent 10 years as a stay-at-home mom, now earns $60,000 per year as a teacher. She would like to retire next year, when she will be eligible for an annual pension of about $22,000. The couple’s home, which they purchased during the marriage, is fully paid for and has a current value of about $450,000. They have joint savings and investments of $50,000, and Gerry’s 401k has a balance of approximately $800,000.
On the recommendation of her attorney, Ms. White, Beth is preparing a detailed budget and completing a New Jersey Family Part Case Information Statement. She is finding this somewhat daunting with so many decisions still up in the air. Ms. White points out that some of those decisions might be easier with expert assistance. They could start by hiring a joint Certified Divorce Financial Analyst (CDFA). A CDFA can help mediation participants project future scenarios and identify potential ways to optimize each party’s post-divorce financial situation. Hiring a joint CDFA can result in substantial savings compared with hiring separate financial experts for litigation.
Let’s look one at a time at the issues facing Beth and Gerry:
Alimony
Because the New Jersey alimony statute (NJSA 2A:34-23) does not provide formulas, but instead simply contains lists of factors, mediation is a good forum for presenting alimony arguments. Spouses who work out their own solutions can save a great deal of time and money that they would otherwise spend arguing in court. For example, Gerry and Beth might be able to agree on a graduated payment schedule based on anticipated changes in their future incomes. Their alimony discussion could also intersect with their discussions about property distribution.
Amount of Alimony
Like the first two couples in this series, Gerry and Beth have a significant discrepancy in income. This means that Gerry is likely to end up paying Beth some amount of alimony. Beth assumes that she will receive enough to maintain the marital standard of living. Ms. White cautions her that this would be true only if Gerry could afford to pay this much without lowering his own standard of living. There is also the additional complicating factor of Beth’s decision to retire next year, at 62. This would be entirely voluntary, rather than prompted by a lack of ongoing employment opportunities, ill health, or some other factor beyond Beth’s control. Even if Beth stops working, Gerry can therefore argue that alimony should be based on her $60,000 salary, rather than on the $22,000 pension. This could reduce payments by several thousand dollars per year, significantly impacting Beth’s post-divorce lifestyle.
Duration of Alimony
Unlike either of our first two couples, Gerry and Beth have been married for more than twenty years, allowing a New Jersey court to order “open durational” alimony, meaning an award without a set ending date. There would be a rebuttable presumption, however, that alimony would end when Gerry reaches full retirement age, in only three years. Beth could challenge this based on the factors listed in the statute. These include the parties’ ages, health, and other available assets and income; the degree to which an alimony recipient has depended economically on the other spouse; whether the recipient has reached retirement age and has had an opportunity to save adequately for retirement; whether the recipient has exchanged other claims, such as property rights, for more alimony; and any other factors that a court may deem relevant (NJSA 2A:34-23j (1)).
Distribution of Marital Property
Neither Beth nor Gerry appears to have any separate property of significant value. Their home, joint saving and investments, and retirement accounts or pensions are all marital property, as they were all purchased or funded entirely during the marriage. They would, however, have some decisions to make regarding the equitable distribution of their marital property.
The Family Home
Beth has already indicated that she would like to move to New Hampshire, so it could be up to Gerry to decide whether or not they will sell the family home. Since they bought it during their marriage, they could each begin by claiming half the value. There is nothing to prevent either of them, however, from arguing for a different division. New Jersey statutes include a factor list for this as well (NJSA 2A:34-23.1). If they sell the house, they can simply divide the proceeds. If Gerry wants to keep it, however, they will need to agree on an exact market value, so that Beth can get a credit for her share. They could hire a licensed real estate appraiser for this, or they could simply collect some comps on their own. Gerry might then consider taking out a new mortgage to buy out Beth.
Retirement Accounts
Beth asks Ms. White why Gerry couldn’t just give her a portion of his 401k in exchange for her share of the house. “He probably owes me part of the account anyway,” she surmised, “since he has $800,000 saved already.”
Ms. White’s response is that retirement assets need to be valued differently than other assets. There are also open questions, she points out, about the appropriate ages of retirement for each of them, as well as about the potential impact of social security payments. Beth’s own pension would be higher if she waits until 65 to retire, and it isn’t realistic to expect Gerry to pay for her decision not to wait. “$800,000 might sound like a lot,” she notes, “but it wouldn’t maintain even one person at your current lifestyle.”
“We should just sell the house then,” Beth proposes. “We’ll each have plenty of money after that, because we’ll each only have half the expenses we had before.”
“That’s a common misconception,” Ms. White comments. “One person could need 80% or more of the amount that two people need. You lose the benefit of many shared expenses.”
Beth leaves Ms. White’s office in deep thought. She is beginning to question whether or not retiring next year is really such a good idea. After all, she still enjoys her job. Maybe, she thinks, she should just spend a few weeks in New Hampshire this summer and reconsider everything.
Conclusion
Beth and Gerry still have many things to work out. Our series, however, ends here. As we moved through these stories, we saw two out of three couples decide that they wanted to pursue marriage counseling before deciding whether or not to proceed with divorce mediation. In our next post, we will take a closer look at marriage counseling. When is it appropriate? How is counseling different from mediation? Is there such a thing as “divorce counseling?” Stay tuned as we address each of these questions.
Are you interested in talking to one of our experienced mediators about how to structure your own divorce mediation? Contact us today for an initial consultation.
Resolving Parenting Disputes in Mediation: Three Families Consider the Options
Keeping the Focus on Children in Parenting Mediation
If you are a parent embroiled in a disagreement about post-divorce custody or parenting time, you may be wondering how to get out of the conflict loop. Perhaps an attorney has told you that it is important to take a child focused approach. You may also have learned that the law allows children to have some input into which parent they would rather live with, if the child is old enough and mature enough to reach an intelligent decision. But how much input? And how old is old enough? Read more
Thinking of Divorce Mediation in 2018? Get Ready…Get Set…Go!
Using Post-Judgment Mediation to Modify Parenting Agreements
For many children of divorced parents, the holidays are less than calm and easy under the best of circumstances. Instead of two or three uninterrupted weeks baking cookies and drinking cocoa, they may have to split their time in a complicated schedule, or travel out-of-state to spend time with a parent they rarely see. Children with amicable parents may relish being able to spend some vacation time with each of them. Children with parents who are not able to let go of past hurts, on the other hand, often sense the tension. Such children may feel a responsibility to reassure each parent of their equal love. They might feel the need to perform perfectly, and to conform precisely to whatever schedule is in place, to avoid any chance of upsetting either parent. No child deserves this kind of burden.
A Smooth Start for a Reconstructed Family
Gina’s parents, Brianna and Joe, have always gotten along pretty well. When they divorced five years ago, they decided to continue living within a few miles of each other. At the time, Gina was barely five years old. She has little memory of the holidays before she began spending half her time at mom’s house and half at dad’s. Her normal routine was to celebrate Christmas eve with one parent before returning to the other parent’s house to wake up on Christmas morning. After presents and brunch, it was back to the first parent’s house for dinner. It may have been a little complicated, but it was all she knew, and it was a way for her to celebrate the holiday fully with both her families.
A New Development Threatens the Harmony
Then last Spring, Brianna found a much better job that was nearly two hours away. Reluctantly, she decided to move. Suddenly, Gina found herself spending every other weekend, plus spring break and summer vacation, in a new neighborhood. She doesn’t want to stop visiting her mom, in fact, she wants to see her more, but she also doesn’t want to change schools. At the end of the year, though, she will graduate from her K-5 school. Her mom wants her to start 6th grade in the new neighborhood. Her dad does not.
Gina doesn’t know what she wants. What she does know is that for the first time since their divorce, her parents have begun to argue. They rarely exchange harsh words in her presence, but she can sense a new coldness in her previously warm extended family—and she knows why. Her parents have talked to her about the two options open for next year. They have been careful not to reveal that they are fighting over the options, but Gina knows. She can feel it.
Now winter break has arrived. Last night, Gina was upstairs in bed at her dad’s house when she heard him yelling on the phone. She ran to her door and opened it a crack to listen. It was obvious what he was yelling about. “The usual plan won’t work anymore,” he said. “We need to start alternating holidays. No running back and forth with two hour drives in the freezing cold!”
Gina crept back to bed, but she couldn’t sleep. Why couldn’t they just figure out how to fix this? She didn’t want either of them to be lonely on Christmas, but she was only one person. She couldn’t be in two places at a time.
Brianna and Joe Go to Parenting Mediation
Brianna and Joe are understandably going through a difficult time with their co-parenting arrangement, but they are losing sight of what is most important—their child’s emotional stability and happiness. They realize that they need to stop the arguing, not only for Gina’s sake, but also to minimize their own emotional stress. Brianna, not knowing where else to turn, decides to consult with a family law attorney, who listens to her story and immediately recommends parenting mediation.
Mediation, the attorney explained, isn’t just for setting up parenting plans when parents first separate or divorce. Like many parents, Joe and Brianna didn’t have any trouble with their initial plan. They reached a settlement agreement easily and filed it in court. As they have learned, however, things can change. Mediation can help parents decide how to address such changes with a minimum of conflict.
Joe agreed with Brianna that mediation sounded like a good idea. They chose a mediator together, and scheduled a session right away.
A Few Tips from the Mediator
Before delving into specifics, their mediator, Ms. Schumann, gave Brianna and Joe a few tips for how to change their approach. “I’m not on either parent’s side,” she stressed, “and I don’t give legal advice. These are just a few general suggestions that other people have found helpful.”:
Moving Forward in Peace
After their first mediation session, Joe and Brianna made a pact to table all discussions about next year until after January 1st. They scheduled another mediation session to broach this topic in late January. In the meantime, they would concentrate only on making the holidays as happy and stress-free as possible for Gina.
It’s impossible to overstate the importance of parents working together to support their children. This importance can become starkly obvious during holidays and long school breaks. Don’t let your kids feel responsible for keeping the peace in the family. That’s not their job; it’s yours.
Whether your holiday schedule is in tatters or simply needs a tune-up, don’t hesitate to contact a mediator for help. The family law mediators at the Weinberger Mediation Center wish you peace and joy this holiday season and all year long.
Thankfulness and Mediation
Benefits of Mediation
Taking your divorce out of the courtroom can go a long way toward alleviating stress. Litigation tends to force divorcing spouses to face off as enemies, increasing hostility and conflict. By contrast, couples who choose to approach issues through a collaborative process can preserve the positive aspects of their relationship. If you have children, this can be a big step toward making their holidays happier.
The many advantages of mediation include the following:
Practicing Thankfulness is Worth the Effort
Mediation is a small consolation prize for the often overwhelming feelings of loss connected to divorce. Science tells us though, that changing focus is likely to be worth the effort. People who intentionally and regularly practice thankfulness not only experience more positive emotions, they also tend to sleep better, and they may even have stronger immune systems.
Harvard Medical School’s Healthbeat newsletter recounts research on the positive effects of practicing gratitude. In one study, psychologists Dr. Robert A. Emmons and Dr. Michael E. McCullough asked three groups of participants to write a few sentences each week, focusing on one of three topics. The first group wrote about events that had inspired feeling of gratitude. The second group wrote about daily irritations. The third group also wrote about events that had affected them, but without any direction to focus on either positive or negative effects. After 10 weeks of participation, the “gratitude” group expressed increased positive feelings and greater optimism. The researchers also found that this group was exercising more and had fewer doctor’s visits than the group that had expressed irritations.
Another leading researcher in positive psychology, Dr. Martin E. P. Seligman, found that people who were directed to write and personally deliver a letter of gratitude once a week to someone they had not previously thanked for an act of kindness immediately exhibited a huge increase in happiness. Still other studies show that expressing gratitude for another person not only builds positive feelings toward that person, but can also make it easier to speak up to that person about problems in the relationship. This latter point may hold a helpful tip for mediation participants. While it might seem counterintuitive, focusing on what has been good in your marriage could make it easier to stand up for yourself in mediation.
Why Practicing Thankfulness, or “Gratitude,” is Effective
There is a pretty simple explanation for why expressing gratitude might make someone feel better. It’s a matter a focus. When we are so overwhelmed with sadness and worry that such feelings block out the positive aspects of our lives, it’s easy to go into a downward spiral. Practicing gratitude helps us refocus on what we have instead of what we lack—and it seems to work even if the only reason we are doing it is because someone else told us to! So give it a try. You have nothing to lose but a few minutes of time each day, and the benefits could be tremendous.
How to Cultivate Gratitude
Healthbeat suggests a few ways to cultivate gratitude on a regular basis, including the following:
Even in our most troubled times, it is worth expressing thankfulness. No wonder we have an entire holiday dedicated to it!
The top mediation professionals at Weinberger Divorce & Family Law Group, LLC’s Mediation Center are deeply thankful for the privilege of helping those going through divorce arrive at a place of peace and joy. Contact us today for an initial consultation.
Interest-Based Negotiations: Mark and Kathleen Discuss Rehabilitative Alimony
“Win-Win” Negotiations in Divorce Mediation
Marriage Counseling and Divorce Mediation
Tailoring Mediation: Gerry and Beth Examine Their Finances
Financial Backdrop
As we learned in our introductory post, Gerry currently earns approximately $150,000 per year as the CEO of a small company. Beth, who spent 10 years as a stay-at-home mom, now earns $60,000 per year as a teacher. She would like to retire next year, when she will be eligible for an annual pension of about $22,000. The couple’s home, which they purchased during the marriage, is fully paid for and has a current value of about $450,000. They have joint savings and investments of $50,000, and Gerry’s 401k has a balance of approximately $800,000.
On the recommendation of her attorney, Ms. White, Beth is preparing a detailed budget and completing a New Jersey Family Part Case Information Statement. She is finding this somewhat daunting with so many decisions still up in the air. Ms. White points out that some of those decisions might be easier with expert assistance. They could start by hiring a joint Certified Divorce Financial Analyst (CDFA). A CDFA can help mediation participants project future scenarios and identify potential ways to optimize each party’s post-divorce financial situation. Hiring a joint CDFA can result in substantial savings compared with hiring separate financial experts for litigation.
Let’s look one at a time at the issues facing Beth and Gerry:
Alimony
Because the New Jersey alimony statute (NJSA 2A:34-23) does not provide formulas, but instead simply contains lists of factors, mediation is a good forum for presenting alimony arguments. Spouses who work out their own solutions can save a great deal of time and money that they would otherwise spend arguing in court. For example, Gerry and Beth might be able to agree on a graduated payment schedule based on anticipated changes in their future incomes. Their alimony discussion could also intersect with their discussions about property distribution.
Amount of Alimony
Like the first two couples in this series, Gerry and Beth have a significant discrepancy in income. This means that Gerry is likely to end up paying Beth some amount of alimony. Beth assumes that she will receive enough to maintain the marital standard of living. Ms. White cautions her that this would be true only if Gerry could afford to pay this much without lowering his own standard of living. There is also the additional complicating factor of Beth’s decision to retire next year, at 62. This would be entirely voluntary, rather than prompted by a lack of ongoing employment opportunities, ill health, or some other factor beyond Beth’s control. Even if Beth stops working, Gerry can therefore argue that alimony should be based on her $60,000 salary, rather than on the $22,000 pension. This could reduce payments by several thousand dollars per year, significantly impacting Beth’s post-divorce lifestyle.
Duration of Alimony
Unlike either of our first two couples, Gerry and Beth have been married for more than twenty years, allowing a New Jersey court to order “open durational” alimony, meaning an award without a set ending date. There would be a rebuttable presumption, however, that alimony would end when Gerry reaches full retirement age, in only three years. Beth could challenge this based on the factors listed in the statute. These include the parties’ ages, health, and other available assets and income; the degree to which an alimony recipient has depended economically on the other spouse; whether the recipient has reached retirement age and has had an opportunity to save adequately for retirement; whether the recipient has exchanged other claims, such as property rights, for more alimony; and any other factors that a court may deem relevant (NJSA 2A:34-23j (1)).
Distribution of Marital Property
Neither Beth nor Gerry appears to have any separate property of significant value. Their home, joint saving and investments, and retirement accounts or pensions are all marital property, as they were all purchased or funded entirely during the marriage. They would, however, have some decisions to make regarding the equitable distribution of their marital property.
The Family Home
Beth has already indicated that she would like to move to New Hampshire, so it could be up to Gerry to decide whether or not they will sell the family home. Since they bought it during their marriage, they could each begin by claiming half the value. There is nothing to prevent either of them, however, from arguing for a different division. New Jersey statutes include a factor list for this as well (NJSA 2A:34-23.1). If they sell the house, they can simply divide the proceeds. If Gerry wants to keep it, however, they will need to agree on an exact market value, so that Beth can get a credit for her share. They could hire a licensed real estate appraiser for this, or they could simply collect some comps on their own. Gerry might then consider taking out a new mortgage to buy out Beth.
Retirement Accounts
Beth asks Ms. White why Gerry couldn’t just give her a portion of his 401k in exchange for her share of the house. “He probably owes me part of the account anyway,” she surmised, “since he has $800,000 saved already.”
Ms. White’s response is that retirement assets need to be valued differently than other assets. There are also open questions, she points out, about the appropriate ages of retirement for each of them, as well as about the potential impact of social security payments. Beth’s own pension would be higher if she waits until 65 to retire, and it isn’t realistic to expect Gerry to pay for her decision not to wait. “$800,000 might sound like a lot,” she notes, “but it wouldn’t maintain even one person at your current lifestyle.”
“We should just sell the house then,” Beth proposes. “We’ll each have plenty of money after that, because we’ll each only have half the expenses we had before.”
“That’s a common misconception,” Ms. White comments. “One person could need 80% or more of the amount that two people need. You lose the benefit of many shared expenses.”
Beth leaves Ms. White’s office in deep thought. She is beginning to question whether or not retiring next year is really such a good idea. After all, she still enjoys her job. Maybe, she thinks, she should just spend a few weeks in New Hampshire this summer and reconsider everything.
Conclusion
Beth and Gerry still have many things to work out. Our series, however, ends here. As we moved through these stories, we saw two out of three couples decide that they wanted to pursue marriage counseling before deciding whether or not to proceed with divorce mediation. In our next post, we will take a closer look at marriage counseling. When is it appropriate? How is counseling different from mediation? Is there such a thing as “divorce counseling?” Stay tuned as we address each of these questions.
Are you interested in talking to one of our experienced mediators about how to structure your own divorce mediation? Contact us today for an initial consultation.
Tailoring Mediation: Gerry and Beth