(This is Part 2 of 2. Review Part 1 here.)
D. Because they will be signing a Mediated Agreement at the conclusion of the process, the clients are told during the initial session of an Informative Mediation what a contract is, and what a contract isn’t. A non-lawyer mediator is prohibiting from engaging in the unauthorized practice of law. He or she may draft a “Memorandum of Understanding,” which the clients may or may not then sign on their own. A non-lawyer purely facilitative mediator may not even tell the clients whether or not a binding contract is created if they put their signatures to that document, as he or she may be concerned that he or she is “giving legal advice.”
By contrast, an attorney Informative Mediator will prepare a binding, enforceable contract, and will so inform the clients. The clients will be told that the contract can be as detailed and as specific as they would like, or as general as they would like. Together the clients can create their own separate futures the way they would like to live them.
The clients will also be informed that they can address as many future contingencies as they wish, with specificity, but will never be able to predict all the possibilities which may occur. For example, in discussing the maintenance and repair of a marital property to be listed for sale or held in one client’s name for some period of time, there could occur a basement flood which may or may not have been due to the negligence of the occupant, who did not turn off the outdoor faucet before the pipes froze and burst, or a tree could fall on the home. Provision may be made for repairs to be shared if not due to the negligence of a client, but not everything may be foreseen.
The difference between binding provisions and aspirational provisions will also be discussed. If the clients wish to include aspirational provisions in areas such as agreement on extracurricular expenses for children, the payment of college expenses, and the filing of joint tax returns provided they can agree as to the allocation of any refund or further liability, they must understand that if they do not attain that aspirational goal, the provision is not legally binding.
E. The remainder of the initial session is then spent addressing each item on the Topics List. The purpose of spending a minute or two on each of the thirty or so topics is not to see “What the clients have agreed to” or what they are each hoping for, but to ascertain whether:
1) the topic even applies, such as whether there are any investment properties or businesses,
2) whether the clients have already reached agreement on the issue (without yet getting into what that agreement is),
3) whether the clients would like legal and/or evaluative information on the topic,
4) whether the clients would like for options to be presented for the resolution of the topic,
5) whether more information should be obtained before the topic can be resolved, such as values for a former marital home and other assets, or 6) whether the topic will require some work if it is to be resolved.
The mediator and the clients will then have a clearer idea of the conflict level, and of how the mediation will need to progress.
F. The Informative Mediation Model considers the restructuring of the family as a whole. Adversarial litigation and negotiation do not typically address the overall needs of the restructuring of the two-home family, nor many of the individual needs of clients with or without children. Informative Mediation is a more holistic process. Accordingly, it may be suggested that the clients obtain further information and/or advice from other individuals, as described below, before decisions can be finalized and an Agreement drafted.
G. The clients may decide at the conclusion of the initial session that they wish to gather additional information, either from their own sources, or by referral to other members of the mediator’s “team.” For example, a first task may be to appraise the former marital home and to then consult with a mortgage lender, to see if one individual is able to qualify to refinance and buy out the other client’s equity. A mother who is still caring in the home for the children, by agreement of the parties, may need a referral to an individual who can assist her in obtaining health insurance post-divorce. To address the possible loss of support due to the death or disability of the payor, or to alleviate some concerns over future medical and financial needs, information may be gathered regarding the costs for life insurance, for disability insurance, and/or for a long-term care policy from the appropriate agents. Since it may not be the best option to designate young children directly on a life insurance beneficiary form, it may be a good idea to create a testamentary or living trust. Referral may then be made to an estate-planning attorney for the appropriate advice.
Mediation in general, at its best, concerns itself with what will work best for all involved, and not with who can grab more of the marbles. Informative Mediation in particular looks beyond the mere legal analysis, to also address the non-legal needs of the clients and children. For example, although usually not as great a need in mediation as in litigation, the clients may want to discuss the use of a parenting coordinator to assist them with communication issues in the future. In addition, one individual still struggling with the ending of the marriage may benefit from receiving a list of recommended mental health therapists from the mediator.
Significantly, in cases where overall tax consequences and professional fees can be minimized, the parties can meet together with a licensed financial planner trained in divorce concerns and alternative dispute resolution, so as to mutually evaluate various financial scenarios. These appropriately trained professionals, with guidance and explanation from the mediator, can perform strictly financial analyses such as the calculation of values of marital and separate interests, can analyze the various ways in which stock options could be valued and/or divided, and if requested, can calculate the appreciation over certain time periods of various separate financial contributions to hybrid marital assets.
In the offices of the financial professional, a defined benefit pension plan can be valued, perhaps using an online pension appraiser. The financial professional will explain the choice of neutral or midpoint assumptions, for the values of certain variables which must be input. NADA motor vehicle values may be added into the summary of the financial professional. Individuals may obtain a single (not inexpensive) formal business valuation, so as to avoid paying two adversarial hired guns who may skew their results somewhat one way or another.
The financial professional can prepare a useful and trustworthy short summary of the various assets in a high asset case for the mediator and the clients, can analyze the tax consequences, and can describe various options for the division of those assets, taking the wishes of the clients into account. For example, if one client wishes to stay in the former marital home and not pay out half of the equity to the other, appropriate offsets can be suggested and recommended by the financial professional. This summary, and the suggested scenarios for division, can then be used during the mediation sessions. However, if the marital estate is not complex, the assets can be valued and divided during the mediation sessions without an analysis by a third party financial professional using the financial statements.
The clients must be made to clearly understand, however, that if a proper financial analysis is recommended but not undertaken, they are simply agreeing on arbitrary numbers, and must assume the resulting consequences. Their Mediated Agreement will so state. In the Informative Mediation Model it will not be tolerated for one individual to state that he or she has created a spreadsheet of values “equalizing” a division of assets. Any representations of asset values, of an equalization or of offsets must be neutrally verified. Otherwise, the clients are simply “agreeing on a number.” It is permissible, however, for the clients to simply “agree on a number,” provided they understand their options, and the fact that that number may not be the number one of their attorneys might argue for if the matter were to be litigated.
Step Four. The Informative Mediator helps the clients to propose, to evaluate and to agree on options, usually during the second session.
Once the necessary information has been gathered, including capital gains tax consequences such as for the sale of an investment property, or the tax consequences relating to the sale of the former marital home more than three years after the separation and equity paid out to each, discussion is had over the simple and the difficult topics. Much of the Topics List will often be easily disposed of, such as who will provide health insurance and for how long.
In other areas, the number of choices for resolution may be limited, and after brief discussion agreement will be reached. These areas may include topics such as the division of unreimbursed medical expenses for minor children, and the distribution of the household furnishings.
Then the real work will be done as the mediator calls upon his or her dispute resolution abilities, obtained perhaps through coursework, certification and experience, to assist the parties in reaching agreement in the more difficult areas.
The purpose of this article is to describe the Informative Mediation process, and not to address the ways in which mediators are able to bring clients to resolution. That topic is not addressed herein. I will note, however, that individuals who truly wish to resolve their divorce through nonadversarial mediation will find a way to do so, especially if guided by a competent mediator.
Step Five. The Informative Mediator writes down the points of agreement, usually during the last session.
Interim notes may perhaps have been made during the sessions regarding the resolution of discrete subjects, but adjustments may have occurred over the sessions. Once all is resolved, a final session will be devoted to clarifying the agreements reached, and the mediator will make note of these decisions. Some mediators prepare a sort of a “rolling draft” of an Agreement, and update that Agreement after each session, along with billing the clients for the preparation of notes. It may not, however, be necessary to impose such costs upon the clients. Instead, a deposit may simply be requested for the drafting and preparation of the Agreement once almost all, if not all issues have been resolved.
For most topics the mediator’s notes need not be lengthy, as the notes will probably refer to certain previously drafted options set forth in the lengthy template of the attorney’s form model Agreement. There are only so many ways to describe, for example, the division of extracurricular expenses for the children, and whether that division is aspirational or enforceable.
However, whatever rough notes the mediator has prepared should not be given to the clients, nor to any attorneys down the road should the mediation fail, in order to protect the confidentiality and integrity of this model where attorneys are not directly involved in the mediation process itself. This is important because individuals often take and should feel free to take conciliatory positions in mediation that they would not take in an adversarial process, and should not fear that their words could be used against them later on.
Step Six. The Informative Mediator explains the meaning of the boilerplate language which will be included in the Mediated Agreement, and the choices within that language, during the last session.
Boilerplate provisions are important. That is why such provisions are included in agreements of like type.
The clients should know what provisions such as “Waiver of Equitable Distribution” or “Incorporation of Agreement” mean. A reconciliation paragraph should be discussed, as should whether the clients wish to include a Waiver of Estate provision or a Right to Inherit provision. Procedures for future modification should be explained, regarding either modification of the Agreement, or modification of the court order incorporating the Agreement. Whether or not the Agreement should include provisions for attorney’s fees for the divorce and for any post-divorce modification proceedings should also be addressed. Boilerplate does not mean unimportant, and it should not be assumed that the same language is appropriate for every Agreement.
Step Seven. The Informative Mediator explains the actual divorce process to the clients during the last session.
During the process, discussion will be had regarding which client will file the actual divorce case, and how the attorneys’ fees will be paid. The mediator may have another attorney on his or her team in a different law firm willing to file the divorce case at a lower rate, due to the volume of the referrals.
When the court papers are issued after a divorce suit is filed, terms such as “Summons,” “twenty-one day time limit,” “default judgment,” “such other and further relief,” “Acceptance of Service/Waiver of Notice,” “deposition,” “ore tenus hearing” and “20-60.3” will pop up. Future concerns of the clients’ should be alleviated by an explanation of what is to come, along with explanation of the mechanics of how any retirement order will be submitted for entry and then sent to the administering entity for implementation.
Step Eight. The Informative Mediator drafts the Agreement.
The initial draft should be prepared from a standard form each time, and not from Agreements prepared for other clients, so as to avoid tech savvy clients from “mining” the document and discovering the identities of any of the mediator’s other clients. The first names of the clients may be used instead of “Husband” and “Wife,” and the term “we” may be used instead of “the parties.” Much of the “whereas” and “heretofore stated” terminology can be dispensed with.
Step Nine. The Mediated Agreement is scanned and sent to each client.
The Agreement should not be sent to the clients as a Word document or other attachment, so as to avoid any temptation on the part of a client to alter the Agreement. The document should be scanned and sent as an attachment which can not be readily revised, such as a .pdf or .tif attachment, with stern orders not to make any changes. The clients should also be instructed to verify that no changes were made before signing.
Usually the finalized Mediated Agreement is complete once drafted, and could be signed by the clients. Four copies should ultimately be signed, so that each client has a fully endorsed copy, one copy can be used for the divorce suit, and one copy should be sent to the mediator for his or her files.
Occasionally, minor bits of information are still missing once the initial draft of the Agreement is prepared, such as the beneficiary amount on an existing term life insurance policy, or one last number to be ascertained. The mediator will have explained that these small items can be discussed by the clients, and one client can email the missing information to the mediator, copying the other client, so as to avoid the mediator entering into a dialogue with just one client. A finalized Agreement can then be sent out.
If the clients wish to suggest revisions, any such revisions should only be made on the mediator’s hard drive version of the Agreement. It is not unheard of for the mediator to receive from the clients revisions tracked on a document which had been sent as a scanned attachment, but any revised document should be prepared entirely by the mediator, and not by “accepting” any changes “tracked” on a client’s copy.
When the final Agreement is sent to the clients, the letter accompanying the Agreement will state that each client should feel free to have the Agreement reviewed by an individual attorney on his or her own behalf. If the clients do so, and if they each receive no new legal information that they did not receive during the course of the mediation, the Informative Mediator has done his or her job.
Step Ten. The Informative Mediator prepares any necessary retirement orders, military DD forms and transmittal letters, after receipt of a copy of the signed Mediated Agreement from the clients.
A copy of the fully endorsed Agreement should always be requested from the clients, so the mediator can verify that the clients did not alter the Agreement on their own. After receipt of the signed Agreement, letters closing the file can be sent.
However, if the Agreement contained language regarding the division of retirement assets, the Informative Mediator may then prepare language for the orders which effectuate the terms of that Agreement. Military and other retirement sections of the Agreement may have been drafted by a retirement benefits specialists after a conference call with the clients. That individual may have emailed the language regarding the retirement benefits to the mediator to be inserted into the Mediated Agreement. That same individual can then prepare the language for the orders, transmittal letters and military DD forms, under the supervision of the attorney mediator, once the Agreement is signed. Or the attorney mediator can prepare the documents and have QDROs preapproved by the Plan Administrators. These orders and documents are then emailed to the clients, who can then forward them on to the divorce attorney to finalize.
Step Eleven. The Informative Mediator sends closing letters to the clients.
Once all work is completed, the clients should each be informed in writing that their file is closed.
The process of Informative Mediation well serves clients who wish to resolve the issues regarding the dissolution of their marriages amicably, respectfully and efficiently. Informative Mediation is best conducted by qualified practicing attorney litigators, with highly trained support staff and well-developed teams of supporting specialists familiar with the process. Through Informative Mediation, rational and respectful individuals can privately create specialized and detailed futures for their two-home families, at less overall cost.
Although the above mainly address the use of Informative Mediation to resolve divorce issues, the process of Informative Mediation lends itself well to any other area of dispute, and not only to the mediation of family disputes.