Divorce Mediation Preparation
Divorce mediation preparation done right will make a significant impact on your settlement. For example, a divorce client in my Nashville, TN office recently asked me to help her prepare for her mediation. After reviewing her case, I saw several common financial mistakes. First, her house had not been inspected. If you will be keeping the house, you should have it inspected and deduct the cost for potential repairs from the equity. Second, her equity value did not include deductions for realtor fees of 6% or closing attorney costs of $1,000. Third, the furniture and furnishing had been valued at $50,000. The actual value was closer to $15,000. All of these seemingly small items added up to $90,000.
You should also consider deducting the 6% realtor fees from the equity value of the house. You'll have to pay these fees when the house sellls so, why not deduct them now? If you don't you will over value the house and potentially get a mediated settlement where you receive less than 50%.
What about the costs to get the house ready for sale? These include a new coat of paint for some rooms and those small repairs that can end up costing $5,000 by the time they are all done. Why not include those expenses and deduct them from the house equity?
When you are negotiating and want to reach a fair divorce settlement, pay attention to the details and understand the numbers so you can secure your future. Realize you may not be thinking straight because you are under a lot of emotional stress. Don't accept an offer unless you understand all of the numbers and have had time to think it through and run it by your friends, family and financial advisor. Don't rely on your attorney to catch every detail of financial issues. The attorneys focus will be on the legal issues not the details of financial issues.