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Mediation & Property Division in an Orange County Divorce?

How Does Mediation Help with Property Division in an Orange County Divorce?

California is a community property state, which generally means that all assets and debts that a couple acquire during the course of their marriage must be split equally at the time of their divorce. Determining the value and division of major assets such as a house, business, investments, and retirement accounts can unfortunately get contentious in some California divorce cases. It doesn’t have to be that way. Some assets are easier to value, like a house, but assets like a business, airplane or classic car can be much harder. Not to worry.

One of the fastest and the best ways to resolve property division issues is through divorce mediation. Mediation is conducted in a relatively informal setting, where the mediator sets the tone, one of cooperation and collaboration, in addressing all of the issues that need to be handled to dissolve your marriage. This usually allows for a more meaningful and satisfying result, especially in complex matters, such as property division. As part of the process, your mediator will explain exactly what is going on at each step of the process and educate you about the many issues that will need to be addressed, so that you can make the most informed decision possible.

Moreover, mediation proceedings are kept strictly confidential. If you want to avoid having certain details of your personal property, financial investments, retirement, savings, and sensitive business information from becoming public information, divorce mediation may be the right option. Some details of your property division must become public information, such as the divorce filing documents and aspects of your settlement, but many of the underlying details remain confidential.

How Mediation Works for Division of Marital Assets?

Sometimes one party may want to keep the marital home, or another asset, while the other party may want to sell it off. An experienced mediator will take the needs of both parties into account and help them find the best possible solution for their case. If the marital estate has sufficient financial assets to allow one spouse to retain the home for example, a mediator can help structure the division of assets to allow that to happen, while still ensuring that the other spouse is fully compensated for their interest.

Division of stocks, bonds, real estate, and stock options can be complicated in California, especially if there are restricted stock units granted to one (or both) of the parties. If marital business assets, such as goodwill and intellectual property are involved, it may be harder to agree on a fair valuation. Similarly, issues may manifest themselves when it comes to division of jewelry, art, antiques and vintage cars, if any. Your mediator can make recommendations for the appropriate professionals to help determine what unique assets are worth and will explain the “why” of every decision.

Through mediation, it is easier to divide assets and help the parties make decisions that allow them to keep assets that may be important to them, while allowing the other party to receive the appropriate compensation for the assets that they are giving up. The involvement of professional appraisers, CPAs, or forensic accountants can often be minimized or avoided in divorce mediation. If so, this can save the parties significant time and money. Smaller household items can also be split more easily and without the necessity to obtain third party valuations.

In a litigated divorce, contentious property division issues may have to be resolved through a court trial. In that case, significantly more time and expense will be involved, particularly if the assets and debts are elaborate and complex. Moreover, in an adversarial court process, it can be harder to mutually agree to split things according to one’s needs. Often, parties can end up feeling dissatisfied with a property division when the court arbitrarily decides who gets what. Mediation can help to avoid that problem.

horough Preparation will Help

You should gather documents, such as last three years’ income tax returns, papers showing the current market value of your home and any other real estate investments, your bank and investment account statements, a descriptive list of other physical/household assets and your vehicles along with their estimated current valuation. As a guide, you should gather statements that are as close to the date of your separation as possible. If you don’t have these items, or don’t know how to get them, don’t panic, your mediator will help.

You should also have statements showing the current value of your 401(k), pensions, or other retirement plans, as well as health insurance policies and life insurance that has a cash or surrender value. The more prepared you are, the faster you can resolve your divorce and the more money you can save through mediation.

The Bottom Line

The bottom line is that mediation is almost always the fastest, most cost-effective way to take charge of your divorce and wind up with a settlement that best benefits you and your family.

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