In many cases, parties in mediation will not have a complete understanding of the financial issues of their case. This makes it difficult for them to make decisions that are necessary to reach a mediated resolution. In situations like these, bringing your financial expert to mediation can significantly improve the mediator’s ability to craft an agreement that is more likely to be accepted by both parties.
Below are four benefits that might make you consider bringing your financial expert to the mediation.
1. Understanding Financial Issues
Calculating, presenting, and explaining financial information is a critical element to the mediation process. Without a clear, concise description of the information, it is impossible to make informed decisions about financial matters.
The financial expert will assist the mediator, who alone may not have the skills and knowledge to calculate the value of assets and income in order to present an accurate picture of what one party can receive from the other.
The expert’s ability to not only calculate the numbers correctly, but also present them in an understandable manner can have a crucial impact on the outcome of a case. They will be able to achieve this accurately and help both parties not only understand the agreement but save fees at the same time.
There is a wide range of roles that financial experts fill during the property valuation process. Some financial experts consult directly with clients on questions related to valuation including replacement costs, capitalization rates, transfer prices, and other parameters.
2. Marital Balance Sheet Preparation
When you are going through a divorce, it is important that you understand the financial situation of your family and how it will impact your life moving forward. This is where a financial expert can help. The mediator will ask the parties to prepare a community property balance sheet. This document shows the assets and liabilities of each spouse as well as any unpaid debts outstanding from the marriage.
Thus, a financial expert can help guide you through this process by compiling your marital balance sheet and explaining how it works.
3. Financial Data Visualization
One of the most important aspects of the mediation process is financial data visualization. The parties involved in a divorce hopefully will be able to clearly see their current financial situation and how it will change after their separation and divorce.
“A picture is worth a thousand words.” This old saying succinctly illustrates the principle behind a financial forensic analysis, which provides insights into the parties’ finances using charts, tables, and graphs.
A financial expert can help you understand your assets and liabilities, as well as any income sources or expenses that are not taken into account by your current budget. The mediator will then use this information to help both parties to reach an agreement.
The financial expert communicates the facts of the family’s finances to a mediator. In their presentation, they may communicate such facts using visuals. These visual displays illustrate important points and make the information more easily understandable.
4. Sorting the tax consequences of the settlement
When going through a divorce, it’s important to have an expert who can explain the tax impact of various scenarios in real time. A financial expert can do just that with their knowledge of accounting and tax law.
The financial expert may also be able to help sort through the tax consequences of your settlement. If you have been ordered to pay alimony or child support, for example, you may need help determining how much of that money will go toward tax payments. The expert can also help determine whether you are eligible for certain deductions that will reduce your tax liability.
Your attorney may be able to help you understand the legal implications of different options, but a financial expert is the one who can make sure you don’t end up taking a huge hit on your taxes.
Mediation is a good way to settle your matter out of court, but you should always have a skilled financial expert present to maximize your odds of reaching a settlement. When it comes to complex financial analysis, it is wise to have a professional in your corner to help you understand both sides of the argument. From cash-flow analysis to asset valuation and debt restructuring, There have been many instances where a change in perspective can be the difference between reaching a settlement or leaving mediation without a deal and the potential of facing more fees and stress.
Don’t be left alone during arbitration or mediation – contact a seasoned financial expert today to see how he or she can help you best represent your client.
Image Credits: Andrea Piacquadio