What You Need to Know about Separating from Your Spouse

What You Need to Know about Separating from Your Spouse

Many couples who are having marital difficulties decide to separate for a while. Maybe they are running into some conflicts that they cannot seem to resolve while living under the same roof, but they are not quite ready to terminate the marriage. Oftentimes, they just need to relieve the stress and conflict that they are in the middle of, and they think that moving out and “taking a break from each other” might do the trick.

While a marital separation is not as final as a divorce, it is still a significant step in that direction. But unfortunately, a lot of couples enter into a separation without educating themselves on what to expect and creating a plan. 

Separating is more than just spouses living at two different addresses, there are a lot of other issues that come along with it, with a lot of things that need to be worked out. Going into the separation without a plan can create bigger problems in the long run, especially if you end up being separated for an extended period of time.

Here are some of the most important things you need to know about and plan for if you are separating from your spouse:

  • Decide where you are going to live. Are you going to stay in the marital home, or is your spouse going to? If you are the one who is leaving, you will need to arrange affordable housing on relatively short notice. This is not always doable especially with rental costs soaring in many areas, so you might need to consider staying with a friend or close family member for a while.
  • Create a schedule for your kids. If you have children, they need to continue to have structure in their lives. If you and your spouse separate, “winging it” will not work well for them. First of all, you will need to figure out who the kids are going to live with. Once that is decided, you will need to come up with a parenting plan and visitation schedule that is structured around yours and your child’s schedules.
  • Discuss how the finances will be handled. Your financial situation is going to change when you get separated, and it will not change for the better. A separation creates two households out of one with the same overall income, meaning double the housing payments. You will need to discuss joint financial obligations with your spouse, whether they will continue to be joint or separated, and who will be responsible for each expense.
  • Make a plan for retirement assets. Many couples do not realize that if you do not create some type of agreement upon separation with your assets and debt obligations, they will continue to be joint while you are separated. This could be especially consequential with retirement accounts that often appreciate quickly in value as the account owner continues to contribute to them. If you are the owner of a retirement account, you will need to consider whether you want this to continue being a joint asset.
  • Lean on your support network. It would be dishonest to say that you will not have some trying times when you are separated. Some days you will be confident in your decision to separate, while on other days, fear and uncertainty will cause you to second-guess yourself. When difficult days come, do not be afraid to lean on those closest to you who you can trust for the support you need. And if necessary, you can also reach out to a professional therapist to help you with deeper issues you may be struggling with.

Creating a Formalized Separation Agreement

The best way to tackle the issues that you and your spouse will be confronting with your separation is to create a formalized agreement. Agreements like these are often worked out through a process called mediation. With the guidance of a neutral, third-party mediator, the spouses can create a peaceable and workable plan that covers all of the important matters that need to be addressed.

Some couples remain separated for several years, and if that ends up being the case for you, you will be thankful that you took the time to create and formalize the ground rules of the separation in advance. If your separation leads to a divorce, this agreement can also provide the general framework for what the divorce settlement will look like. 

Keep in mind also that a separation is not always the end of the marriage. You could end up reconciling and moving back in together, which of course happens in some cases. Be open to this possibility (if it still exists) as you explore the possibility of starting a new life as a single person.

Lastly, remember that whether your separation leads to a divorce or reconciliation, working together with your spouse to develop a formal plan will help foster a healthier relationship (with your spouse) in the long run. This is a great outcome for everyone involved, especially your children.

Contact AMS to Learn More About Separation Agreements 

If you and your spouse are separating and you have not yet worked out a formal agreement with them, Advanced Mediation Solutions (AMS) is here to help. We will be happy to speak with you to provide further details on the mediation process and how you can use it to get your house in order during your separation. To get started, message us online or call our office today at (856) 669-7172. We look forward to serving you!

Divorce Mediation When You Own a Business

Divorce Mediation When You Own a Business

When a couple decides to get a divorce and one or both of them owns a business, the process is going to be a lot more complicated. Businesses can be a major point of contention between divorcing spouses, with questions over ownership, valuation, and other important issues that need to be resolved. 

When business owners divorce, it is definitely not a straightforward process, but this does not necessarily mean you have to litigate the case. You can effectively resolve the issues related to a family-owned or closely held business through mediation, as long as you work with a mediation service that has extensive experience with these types of cases and an in-depth understanding of the complexities involved.

On the other hand, if both spouses hire attorneys, things can become very expensive, and the process could drag out for an extended period of time. With this traditional approach, each spouse will typically hire their own forensic accountant. The forensic accountants go to work performing their own analyses and producing their findings, then they negotiate between the two findings and try to work out a compromise.

With our mediation process at AMS, we bring in a neutral third-party specialist, a CPA who specializes in divorces that involve business owners and franchise owners. Our CPA helps the couple work through all the nuances of business ownership during a divorce, and decisions are made after the parties have been educated and with input from each participant. 

During this collaborative process, no settlement can become legally binding unless both parties agree to it. And if mediation does not produce an acceptable agreement, the spouses are always free to try a different approach. 

Common Issues Involved with Divorce and Business Ownership

There are a number of details that need to be worked out during the division of assets when the divorcing spouses are business owners:

Determining if the Business is a Marital Asset 

The first question that needs to be answered is whether or not the business is part of the marital estate, or if it should be a separate asset. This question is not easy to answer in all circumstances, because there are a lot of things that can complicate the issue. 

If the business was started after the couple was married, then it is almost certainly going to be considered marital property. However, even if the business was started by one of the spouses before they were married, it could still be a marital asset if the other spouse made significant contributions to its growth or for other reasons, such as co-mingling of business and personal funds (more on this later). 

Many business owners also enter into prenuptial or postnuptial agreements. If there is a valid marital agreement that addresses business ownership, then the couple will most likely need to adhere to its terms and conditions, as long as they are not unreasonable.

Determining and Splitting the Value of the Business

Small businesses can be very difficult to assign a value to because there are a number of unique factors that go into this equation. First of all, there are three primary valuation methods that could be used:

  • Income-Based Approach: Basing the value on the business’ annual net revenue.
  • Asset-Based Approach: Basing the value on the value of the assets the business owns.
  • Market-Based Approach: Basing the value on how much similar businesses are selling for in the local marketplace.

The appropriate valuation method will depend on the type of business and industry. For example, if it is an online business with very few physical assets, then the income-based approach would probably make the most sense. If, on the other hand, it is a business that owns and leases commercial space, then you would probably use the asset-based approach. In some cases, a combination of these methods might produce the most accurate valuation.

Once on appropriate value is agreed upon, dividing the business between the spouses can be another major challenge because of the disproportionate value of the business in comparison to the value of other marital assets.

Potential Cash Flow Inconsistencies

Valuing businesses can be challenging in certain cases in which cash flow fluctuates throughout the year. For example, let’s say you own a resort on the Jersey Shore where business booms during the summertime, but things are dead during the winter. A business like this may be cash-strapped during the slow periods, and this must be taken into account. Some businesses also fluctuate year to year from being cash flow positive to cash flow negative.

Income Verification

Getting a true handle on business income can be very difficult sometimes because of the co-mingling of business and personal funds. Oftentimes, business owners will include quasi-personal expenses as business expenses, which paints a distorted picture of what the net revenue truly is. Some owners also underreport or delay the reporting of revenue for various reasons.

Business Interest and Involvement

There are many situations in which both spouses work in the business. In cases like these when they both want to stay involved in the business, it can be difficult to decide who will continue to run the business or of the business should be split between the spouses (if that is a practical option). Sometimes, divorced spouses are able to continue operating a business together as partners. In other cases, however, the best option might be to sell the business and split the proceeds.

How AMS Can Help Business Owners with Divorce Mediation

If you own a business and you are considering a divorce, you do not have to go through an expensive court battle to resolve ownership and asset division. At AMS, our experts can help you work through the complexities business owners face, so you can develop a peaceable and workable settlement that all parties can agree to. 

Our mediation sessions are kept private and confidential, so the details of your divorce will never become part of the court record. And because participants are the ones who ultimately decide the terms and conditions of the settlement, you gain far more flexibility and control over the process, allowing you to develop creative solutions that can be tailored to your individual circumstances.

To find out more about our divorce mediation services and to schedule a free consultation, call our office today at (856) 669-7172.

This article was written as a collaboration between Roseann Vanella, professional family mediator for Advanced Mediation Solutions (AMS) and Jim Colitsas, CPA and partner with Princeton Financial Group (PFG). To learn more about PFG and their services, go to https://www.pfg-planning.com

Divorce Does Not Have to Leave You in Major Debt

Divorce Does Not Have to Leave You in Major Debt

I read an article recently in Yahoo!money about the increasing interest in divorce loans as the country continues to deal with the unprecedented global pandemic. We all know that 2020 was a very stressful year, and all the craziness that happened last year has certainly taken its toll on many married couples. 

A lot of couples who would like to get a divorce have a hard time paying for it, and a growing number of them are taking out loans to finance the cost. The price of a conventional divorce can easily exceed five figures, and most Americans these days do not have that kind of money lying around. 

Even if you have decided that dissolving the marriage is the right course of action, creating new debt to finance it is not the answer. Divorcing is hard enough on a couple’s finances as it is. 

When spouses split up, they create two households where there used to be one. This means two housing payments, two utility payments, two internet/cable TV payments, etc. all with the same overall income. Under these circumstances, the last thing you want to do is run up a large debt that you will have hanging over your head on top of all the other added expenses. 

How to Get Divorced Without Running Up a Large Debt

The Yahoo! article suggests that instead of getting a divorce loan, spouses who are in an untenable marriage try “communication, reconciliation, kindness, and counseling”, and if all else fails, separate rather than going into debt to get a divorce. They also advise that you “take a look at the options out there and compare the different solutions to find the best and most affordable option for you”.

One affordable solution that is becoming increasingly preferred among divorcing spouses is mediation. Divorce mediation is an approach that does not have to involve attorneys, and it allows couples to work out a final settlement at a fraction of the cost of a conventional divorce. Through mediation, couples can complete their divorce in just a handful of sessions, and these sessions can be conducted in person or remotely, whatever is most convenient for participants. 

How Does Divorce Mediation Work?

Mediation process is facilitated by a neutral, third-party mediator who meets with the participants to work out the terms and conditions of the divorce. Spouses are free to get an attorney, or they may choose not to have any attorney at all. If you are trying to do a divorce on a budget, you would probably want to choose the latter.

For mediation to work, you must enter the process with a willingness to be civil, communicate, and compromise. No settlement can become legally binding unless both participants agree to it, so you have to be ready to work cooperatively with your spouse, recognizing that by taking this approach, you will see the benefits of completing your divorce without going deep into debt and putting your financial future at risk. 

All of that said, you do not have to agree with your spouse on every issue before you start mediation. It is totally fine if you have some disagreements, that is what the mediator is there for. As mediators, we are trained to help couples resolve disputed issues by looking for middle ground and keeping the communication lines open between the spouses. 

The end result of divorce mediation (when successful) is not only a lower cost divorce, but also a final agreement that fully addresses the couple’s unique circumstances rather than a cookie-cutter solution that you would typically get from a court. And because the agreement is created with input from both spouses, they are more likely to take ownership of it and abide by its terms and conditions.

As an aside, if you are thinking about separating (as the Yahoo article talks about) as a trial or to avoid the cost of a divorce, it is still a good idea to go to mediation; especially if you have kids, significant assets, and other complicated issues to resolve. These issues should still be worked out and the terms and conditions of them put into writing, rather than verbal agreements for which there is no legal recourse of one of the parties breaks them.

AMS is Your Low-Cost Divorce Solution 

If you are considering a divorce but you do not want to take out a loan to do it, Advanced Mediation Solutions (AMS) is here to help. Numerous couples have used our services to craft a peaceable and workable divorce settlement without breaking the bank. To learn more about divorce mediation and/or to set up a free consultation, message us online or call our office today at (856) 669-7172. We look forward to serving you!

Using Mediation to Develop a Prenup that Satisfies Both Parties

Using Mediation to Develop a Prenup that Satisfies Both Parties

My last mediation of 2020 was for a prenuptial agreement, and to me it was kind of a sign of hope for the year to come. The couple had given a lot of thought and had many discussions about their prenup prior to contacting me, and we actually finished the entire mediation in less than a month. Although this was a bit unusual, it highlights how mediation was the perfect solution for the couple.

The major key to success with mediation for this couple was that they approached it as “their prenup”. They came to me because they knew they needed help with the delicate intricacies of this type of agreement that they had no knowledge of. They also knew that had they each gone to different attorneys, it would have taken a lot of time and money to get an agreement like this accomplished. And in the end, that agreement may not have reflected their true desires.

During mediation, I spoke with them and discovered what was most important to each spouse. From there, I was able to quickly guide them through the process and finish with a prenuptial agreement that they were both very happy with. Next, I referred them to “mediation friendly” attorneys (since each individual needs to be represented in order to have a legal binding document drafted), and an agreement was finalized based on the Memorandum of Understanding (MOU) that I had drafted for them.

Why Mediation Works Well for Prenuptial Agreements

The prenup that I mediated at the end of the year had a very happy ending because the couple had the right mindset going in and the process turned out to be a perfect fit for them. But even when the pieces do not fit perfectly into place, mediation can still be a great way to work out the terms and conditions of a prenuptial agreement.

Think about it. Prenups are already a taboo subject that many soon-to-be spouses are afraid to bring up. But at the same time, this type of agreement can be very helpful for a lot of couples, and many couples need a prenup to provide some future certainty and predictability around the financial issues that are important to them.

Because of the delicate nature of prenuptial agreements, drafting a generic agreement (usually done by the attorney of the more moneyed spouse) can create hard feelings just at the time when a couple is about to start their new life together. Generic prenups often end up being one-sided in favor of the spouse who is more motivated to create it, and it can put the two parties in an adversarial position. This is not the frame of mind you want to be in with your wedding day approaching.

Mediation is an entirely different approach that levels the playing field and allows the spouses to create a prenup in a friendly and cooperative environment. During mediation sessions, the spouses meet face-to-face (or virtually if that is more convenient) with a neutral, third-party mediator to work out the agreement. 

The mediator looks to discover not only what is most important to each participant, but why these things are important to them. Once each participant has explained the motivation for their position, the parties are better able to understand and empathize with each other. This kind of open communication and mutual understanding allows the couple to come together and think more creatively, clearing the way for solutions that both parties will be very satisfied with.

Contact AMS for Assistance with your Prenuptial Agreement 

If you are getting married soon and you need a friendly and non-adversarial way to work out your prenup, Advanced Mediation Solutions (AMS) is here to help. We have successfully assisted countless couples with prenuptial agreements and other types of family legal matters through the mediation process, and we are ready to get started whenever you are.

For a free consultation, message us online or call our office today at (856) 669-7172. We look forward to serving you!

Using Private Mediation for a Happier Divorce

Using Private Mediation for a Happier Divorce

The term “happy divorce” seems like an oxymoron, and maybe it is. After all, the dissolution of a marriage is really not a happy occasion for most people. But that said, some divorces are happier than others, and they are usually the ones that are settled without a long, drawn out court battle.

I have been a divorce mediator for many years now, but one of the main reasons I decided to go into this field is because of what mediation did for me. I was able to use mediation successfully in my own divorce, which allowed me to part ways with my ex-husband on good terms and move forward with my life. Ever since then, I have been passionate about helping other couples who are in the same situation I was in.

The early part of the New Year is always a very popular time to get divorced. Some couples are ready to separate long before the holidays, but they tough it out so their kids can have one last holiday celebration together. If you are in this situation, I urge you to consider using mediation to settle your divorce.

Private Divorce Mediation vs. Traditional Litigation

When we talk about “private mediation”, we are talking about a process that is different from court-ordered mediation. With private mediation, the couple hires their own neutral, third-party mediator to help them work out the terms and conditions of their divorce. This process offers several advantages over traditional divorce litigation:

  • Lower Cost: Private mediation can often be completed at a fraction of the cost of litigating the divorce.
  • Faster Processing: Your divorce can be settled usually within just a handful of sessions, after which the settlement is presented to the court for approval. This process can be completed much faster than going to court.
  • Cooperative Environment: Private mediation is conducted in a cooperative rather than combative environment. The mediator guides the discussion toward win-win resolutions that both participants can be satisfied with.
  • More Control by Participants: When you go in front of a court, the judge has the final say over any disputed matters. With mediation, no settlement can become legally binding unless both participants agree to it. This gives you more control over the process, allowing you and your spouse to think creatively and come up with solutions that better fit your specific needs and concerns.
  • Child-Friendly: The cooperative environment in which mediation is conducted helps you and your spouse maintain a cordial relationship, which is especially important if you have children.
  • Privacy Protected: Unlike divorce litigation, mediation sessions are kept private and will never become part of the public court record. This allows participants to speak more freely without fear that what they say will be used against them later on.

 

Reasons Couples Reject Private Mediation

It is easy to understand the financial benefits of private divorce mediation, but people often have other misconceptions regarding the process that make them apprehensive about choosing this option. Perhaps the biggest stumbling block is that spouses do not believe they will receive the legal advice they need and/or have their legal rights protected during the mediation process. This could not be further from the truth.

Divorce mediation participants are always free to retain legal representation, and they can consult their attorney throughout the process. In addition, any settlement reached through mediation has to be reviewed by the court before it becomes legally binding. As an aside, judges tend to prefer a mediated settlement where all of the important issues are worked out rather than having the spouses fight it out in court.

Speaking of which, some people look forward to their “day in court” as their time to finally settle the grievances that they have with their spouse. This is another reason they might shy away from mediation. 

The truth is that court battles rarely deliver the emotional satisfaction that spouses are looking for. Instead, each side will argue their cases, which means a case will be made against both spouses. This usually leads to more conflict, and the result is often resentment and hard feelings that can last for several years.

Mediation for the Sake of the Children

Court battles rarely solve anything substantial, but even worse, they often leave more relational damage in their wake. Litigation that results in ongoing conflict after the divorce is over can be especially hard on children who are often caught in the middle. This type of situation can cause more depression, anxiety, and anger among children as they tend to emulate the behavior of the parents.

Divorce is difficult for children under any circumstance, but in reality, it’s not so much the separation or divorce that hurts them as much as it is the resulting conflict. Children have a much easier time adjusting to a divorce if their parents are civil to each other and maintain a cordial relationship. Above all else, this may be the best reason for divorcing couples to consider private mediation.

Turn to AMS for Private Divorce Mediation 

If you are facing a divorce in the New Year, private mediation might be a good option for you. To find out more about the process, contact Advanced Mediation Solutions (AMS) for a free, no obligation consultation. We are available for in-person and remote mediation sessions, and we can tailor the sessions around your busy schedule. 

To get started, message us online or call our office today at (856) 669-7172. We look forward to serving you!