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Myth: I will get more money if I litigate my divorce

Divorce is a scary and dis-empowering time for everyone involved. You and your spouse are most likely scared for your financial security, while your minor children are concerned what the word family will mean when the divorce comes to an end. You may be asking yourself questions like “do I need to protect myself by getting an aggressive divorce attorney?” or “is my spouse going to pull a fast one on me and take everything we have?” These are very common questions to ask, as this is your first time experiencing divorce. There is always a lot of unknowns. One common misconception, however, is that people think that they will end up with more if they litigate their divorce as opposed to going through divorce mediation.

Let’s explore this theory. Whether this is an easy fact to accept or not, there are a finite amount of assets involved in almost every divorce. In other words, there is what there is. In negotiation, we call this the “pie,” as it will need to be divided in some fashion. When people talk about traditional negotiation models like “zero sum,” they explain that what one person gains from the pie, the other loses. For example, if one spouse ends up with 51% of the assets from the marriage, the other person loses that 1%. This may be how litigation works, but not mediation. I will explain this concept further below. In litigation, I must admit, it is possible that you and your spouse may end up with a more “exact” settlement. This means that the values of your property and your respective interests in that property may be determined by your attorneys, experts, and judge in a manner that is more precise than what we can get in mediation. As a mediator, even I can admit that there is a benefit to that kind of certainty. On the other hand, however, you are spending a lot more of your assets to gain this certainty.

Let me give you an example:

Husband and Wife have been married for 10 years. They have a home, which has $100,000 in equity and they have retirement accounts, which have $100,000 in them. Before the marriage, Husband contributed some money into the retirement, which became joint after they were married. In litigation, it is possible that there will be an argument over how much Husband contributed before the marriage, and how much money each person is entitled to as a result. Because of this argument, the parties rack up $15,000 in attorney’s fees. Now, the amount left to divide from retirement is $85,000 instead of $100,000. That is a significant amount of money!

In addition to the example above, I have heard real life stories of people who actually spend more money litigating over an account than there is in the account to begin with! That puts the couple in the red from the outset. In mediation, using the example above, the parties would gather their financial statements and agree on a fair amount to credit Husband for his contributions to the retirement before marriage. This conversation would take place with the guidance and support of their divorce mediator, who would help provide the information the couple would need to make a decision. Now, the couple has the entire $100,000 still in tact. They have not spent more attorney’s fees litigating over this issue and they have not further depleted any community assets. This simple example illustrates that you do not necessarily get more in litigation than you do in mediation. In mediation, the idea is that you are preserving the assets you have and using the help and expertise of your divorce mediator to assist you in making fair agreements.

Another way to “get more” in mediation is to explore the idea called “expanding the pie”. When they teach negotiation, they say that you can either divide the pie (the way that I mentioned above in zero sum negotiation), or you can expand it by exploring people’s underlying interests in their settlement. Using the example above, let’s imagine that Wife’s goal in mediation is to have security and Husband’s goal is to preserve the retirement. It could be possible that they make a trade here – Wife keeps the house and Husband keeps the retirement. Or, maybe they have minor children and the concept of providing a college education is important to the couple. This isn’t part of the “pie” per se, but it is something that can be used as a bargaining chip, thereby expanding what the settlement can cover. When people’s needs are met, the idea of assets becomes less important. In my experience, it is never the money itself, it is what the money represents. Divorce mediation is all about finding solutions that fit the couple and what their true intentions are.