The ABC’s of ADR’s
The end of a marriage is much more than just a legal event; it also encompasses financial and emotional changes that have consequences for the entire family. It doesn’t have to result in a costly “he said, she said battle” with complex legal issues not understood by the common folk. Finding an alternate method can set the stage for successful co-parenting relationships and mutually satisfactory agreements. Today, more than ever before, disputing parties are opting to settle their differences through alternative dispute resolution (“ADR”) proceedings. ADR is a compelling alternative to settling disputes without litigation. As the structure of ADR evolves, so does the role of the financial expert. It’s optimal for the seasoned professional to be involved from the onset of a dispute to shorten resolution time and cost.
The three most widely used ADR methods are:
Arbitration
The chosen arbitrator is generally someone both sides’ lawyers deem to be an expert. The arbitrator will listen to testimony given under oath and review all documents submitted. It’s often considered an informal trial as the arbitrator can issue binding decisions. These decisions are then made into a court order. The process can be flexible and suited to the party’s needs.
Collaborative Divorce
A scenario where financial experts, lawyers, mental health practitioners, and others come together to create a unified solution. The parties and their attorneys sign a participation agreement, setting a framework for the process and agreeing to settle without going to court. In the event the case goes to litigation, the attorneys must resign. The goal is to settle every issue, share relevant information, and negotiate together.
Mediation
Both sides hire a mutually agreed-upon neutral third party. This person cannot make decisions or give either side legal advice. Their role is to facilitate communications until a compromise is reached. They provide facts to help the parties gather all relevant information to make informed decisions and settle jointly. The mediator has no authority to exact a settlement.
Whichever method you use, it can be crucial to have a financial expert with you every step of the way. It’s their job to discern the numbers and present their findings in a clear, concise, and understandable manner. They can investigate any financial discrepancies between the parties. With a strong understanding of all the numbers, the marital assets, and balance sheets can be updated throughout the process. They can also provide tax advice and help avoid certain complications that may arise. This is even more important after the 2018 Tax Cuts and Jobs Act, which cuts individual income tax rates, doubles the standard deduction, and eliminates personal exemptions. It’s better to know an acceptable range of possible outcomes before going in. The right professional can also value the family business, provide income analysis, calculate child support and alimony payments, as well as trace assets.
We have a staff of experts with a variety of credentials in fields such as business valuation, accounting, and financial analysis. We’ve acted as both a defendant and plaintiff expert, as well as a neutral party. Let us alleviate one less concern.