Whether you and your spouse each had a lot of assets when you got married or you acquired all of your wealth together, now that you are divorcing, you have to divide your joint assets. One way to do that is through court, another is collaborative divorce, and a third option is mediation. Litigation vs. mediation is the most common debate, especially in high net worth divorces. Couples should consider the differences between the two, the situations in which mediation may not be ideal, and other key considerations of their circumstances that may influence your decision. An experienced Virginia divorce attorney at DiPietro Law Group, PLLC, may be able to help you make a decision, review mediation agreements, or represent you in court if it comes to that. Call (571) 626-7389 to schedule a consultation and learn more about your options for a better divorce experience.
Difference Between Litigation vs. Mediation
In high net worth divorces, it is important to understand the difference between litigation vs. mediation. Litigation is the traditional court process and involves adversarial proceedings where a judge makes the decisions. Parties are encouraged to prove why their needs or desires should be granted instead of the other party’s. Mediation does not take place in court and is a collaborative process where a neutral third party, called a mediator, helps the parties reach a mutually agreeable settlement. Instead of proving why one party’s needs or desires are more important or credible, the parties are encouraged to work together to find the most satisfying solution.
Mediation is often preferred in high net worth divorces. Mediation offers potential cost savings, faster resolution, and preservation of the couple’s privacy and relationships. However, it is important to know that mediation is not always appropriate and individuals may want to consult with legal counsel before agreeing to either choice when considering litigation vs. mediation.
Why Mediation May Be the Better Choice
Many couples going through high net worth divorces prefer mediation vs. litigation. Consider the following comparisons between the two:
- Mediation is generally less expensive, as litigation costs can rise quickly due to attorney fees, court costs, and expert witness fees. These expenses may begin to deplete some of the marital assets, reducing what each spouse gets in the property distribution.
- Mediation is often faster due to reduced attorney involvement and a more streamlined process, while litigation can be lengthy and time-consuming as the parties wait for their court dates, judge’s decisions, and the equitable distribution of property required by Va. Code Ann. § 20-107.3. This is particularly true of high net worth divorces, where assets can be complex and determining what is equitable can take a long time.
- The parties have more control in mediation and can craft creative solutions to their unique needs. Litigation gives the judge the final say and limits the couple’s control over the outcome.
- Mediation sessions are confidential, preserving privacy and protecting sensitive information, while court proceedings are public record and could potentially expose sensitive financial information the couple would rather keep private.
- Mediation fosters cooperation and can help maintain a more amicable relationship, which can be particularly important if the couple has children they will co-parent. Litigation is adversarial and can strain the relationship between the spouses.
Choosing Between Litigation vs. Mediation
While mediation is often preferred in high net worth divorces, there are several factors that divorcing couples should consider when choosing between litigation vs. mediation. While both spouses may need to agree with the decision, individuals may want to consult with an attorney at DiPietro Law Group, PLLC to learn more about which option may be more appropriate for meeting their needs and desires.
Level of Conflict
While many people automatically associate divorce with high levels of conflict, many couples are still able to communicate openly and get along well. When this is the case, mediation is often a good option. However, if the couple does not communicate openly, or at all, or does not get along well, they may need litigation and a judge to make decisions for them. This may also be true if one spouse is extremely determined to have their own way and refuses to budge on their position.
Complexity of the Case
High net worth divorces are often complex, with assets that may be located in other jurisdictions or internationally, real estate holdings, business valuations, and investment portfolios. A judge will be unfamiliar with the intricacies of these assets, and therefore will likely make decisions that may be equitable but not what the couple would want. In mediation, the couple can use their familiarity with their assets to discuss and decide together how to divide those assets.
Additionally, because mediation sessions are confidential, the couple’s assets remain private instead of become part of the public record as they would be in litigation. All of this may save the couple time, money, and the emotional strain that often comes with litigation.
Desire for Control
Over the years of acquiring marital assets, the couple has had control over what to acquire, when to acquire it, and when to get rid of it. When deciding between litigation vs. mediation, individuals should remember that litigation takes away the couple’s control. A judge decides who gets which assets, and the decisions the judge makes may not be the ones the couple would want. In mediation, the couple can split their assets as they see fit, allowing each spouse to have specific assets that they want, even if that distribution is not what the court would consider equitable. However, individuals should be aware that if there is a gross disparity in the distribution of the assets, the court may not uphold the agreement.
Budget and Time Constraints
Mediation tends to be more cost-effective and faster than litigation, which may make it a better option for high net worth divorces in which the couple wants to quickly wrap things up or save money. Litigation takes time as the case has to be put on the docket, which may be weeks or months away. Then, hearings and other court proceedings are often strictly scheduled with potential penalties if the parties fail to appear. There are attorney fees, court costs, expert witness fees, and other costs associated with litigation.
However, mediation is often more relaxed, able to be scheduled around the parties’ schedules, and can move as quickly or slowly as suits the couple. Mediation is also usually much less expensive than litigation because many of the court-associated costs are reduced or eliminated, attorney fees are reduced due to their reduced involvement, and there is often less need for expert witnesses.
Privacy Concerns
Mediation sessions are confidential, with everything discussed and every decision made staying within those walls. Agreements are incorporated into the final divorce decree, but not made public. However, litigation is public record, and in some cases, the hearings themselves may be open to the public. This means that with litigation, personal information and other details the couple may prefer to remain private will become public and accessible to anyone. Mediation allows the divorcing couple to maintain their privacy.
Relationship With the Spouse
Like other divorces, many high net worth divorces involve couples who still have a relatively good relationship and would like to maintain that relationship. They may need to co-parent children together, or they may simply enjoy each other’s friendship even if they are no longer a romantic couple. Because mediation is collaborative, it often allows the parties to maintain a functional relationship. Because litigation is adversarial by nature and often requires the parties to “prove each other wrong,” it may cause friction and animosity that damages or destroys their relationship.
Situations When Mediation May Not Be Ideal
While mediation is often preferred in high net worth divorces when deciding litigation vs. mediation, there are some circumstances where mediation is not ideal. There are three situations in particular when an individual may want to consider litigation instead.
Abuse or Domestic Violence
If abuse or domestic violence has been part of the marriage or the divorce, mediation may not be appropriate. Mediation requires the parties to be in close proximity and work together, which can be dangerous and uncomfortable for the victim. Litigation may be necessary to keep some distance between the parties and ensure the safety of the victim.
Imbalance of Power
If one spouse is highly manipulative or dependent on the other, mediation is probably not the right choice. While mediation should be about collaboration and creating mutually agreeable solutions, it is unlikely that the couple will shift out of the dynamic that creates that imbalance of power without therapy. This means that any agreements made in mediation may not be genuinely mutual and one party may take advantage of the other. Litigation puts the decisions in the hands of the judge, reducing the chances that either party can manipulate or deceive the other to get what they want.
Unwillingness to Communicate
If either party is unwilling to communicate, mediation is unlikely to be effective. Unwillingness to communicate may mean a literal lack of desire to speak with the other party due to a strained relationship, but it may also mean that the party is firmly entrenched in their position and unwilling to negotiate. Being unwilling to communicate may also mean that the individual ignores attempts to communicate by the other party, refuses to discuss important matters, delays the process, withholds information which may include hiding assets, or stonewalls.
Key Considerations of High Net Worth Divorces
High net worth divorces can be more complex than a typical divorce, and there are some key considerations that should be taken into account when trying to determine litigation vs. mediation. In addition to the complexity of the couple’s assets, privacy concerns, cost and time constraints, and a desire to maintain control in the decisions of divorce, couples should consider these factors.
Children’s Interests
Couples who share children and want to have a positive co-parenting relationship may find that mediation is a better forum for addressing the children’s interests, such as child support and custody. While litigation can also address these issues, it does not encourage the parents to work together to find an agreement. Instead, a judge makes a decision based on the law and often, one or both parents is not happy with that decision. Additionally, while those decisions are typically made with the best interest of the children in mind, the judge does not know the children, and this means that their best interest may not be truly met.
Mediation allows the parents to consider many factors, including any special needs the children may have, the children’s own desires for time with their parents, educational needs, and more. In addition to the children’s interests, couples can also address spousal support in mediation.
Mediation Not Required But Encouraged
Virginia generally does not require divorcing couples to attend mediation, but they do encourage it and some jurisdictions may require it before proceeding to litigation. In high net worth divorces, if child custody is involved, couples may want to consider choosing meditation when debating litigation vs. mediation. Even if they are unsuccessful in coming to an agreement, attending a few mediation sessions can show the court that the couple has made an effort to manage their issues on their own.
Additionally, Va. Code Ann. § 8.01-581.22 provides that mediation sessions, including the discussions and any work products or other materials in a mediator’s case file are generally confidential. This allows the parties to mediate with transparency, speaking freely so they can find a mutually satisfying solution. This may make finding an agreement easier than litigation, where both parties will be attempting to argue why their solution is better than the other’s.
Prenuptial and Postnuptial Agreements Still Apply in Mediation
Mediation allows the divorcing couple to come up with creative solutions to their issues, and this can be extremely beneficial in high net worth divorces, where the usual solutions the law provides may not be ideal. As long as the agreements couples make do not break any laws and are not unconscionable toward one party, they can agree to anything that works for their circumstances. However, mediation does not eliminate any previously made agreements, such as prenuptial (prenup) and postnuptial (postnup) agreements.
Va. Code Ann. § 20-149 provides that a prenuptial or postnuptial agreement must be in writing and signed by both parties. Prenups become effective upon the marriage and postnups become effective immediately upon signing them. If the couple chooses, they can amend or revoke their prenup or postnup by putting such intention in writing and signing it, or by creating a new agreement that both parties have signed. However, if one party wants the prenup or postnup to remain in place, mediation cannot force them to change their mind.
Keys to Successful Mediation
If a couple debates litigation vs. mediation and settles on mediation, there are a few things they can do to help ensure a smooth, successful mediation process. Some keys to successful mediation in high net worth divorces include:
- Open and Honest Communication: Mediation only works when all parties are open and honest about their intentions, desires, needs, and assets. Remember that mediation is generally confidential, so being completely transparent does no harm, as neither party can take what was said in mediation and use it against the other party in litigation.
- Realistic Expectations: Having realistic expectations is a crucial part of successful mediation. While the spouses may know what their ideal outcome looks like, they must be realistic and be willing to negotiate to find a mutually satisfying agreement.
- Commitment to the Process: Attending mediation with no intention to work things out or with the belief that it will not work will cause mediation to fail. Parties must attend mediation fully committed to making the process work.
- Having Experienced Legal Counsel and Mediators: In high net worth divorces, it is especially important to have legal counsel and a mediator that are experienced in the complex financial issues that these divorces often have. While the mediator does not make decisions for the parties, they can offer guidance and to do so, they must have expertise in the issues. An individual’s attorney should review any agreements resulting from mediation to ensure they are fair.
How a Virginia Divorce Attorney May Assist You
In some divorces, there is no question: the couple does not get along, cannot agree on even the smallest details, and must go to litigation to resolve their issues. In cases like yours, though, questioning whether to proceed with litigation vs. mediation can be important. High net worth divorces often benefit from the time and money savings of mediation, and you may maintain a much better relationship with your spouse by working together to find creative solutions to your issues. A Virginia divorce attorney at DiPietro Law Group, PLLC may be able to assist you by recommending a skilled mediator, reviewing mediation agreements, helping you identify when your spouse is not genuinely engaging in the mediation process, and representing you in litigation, if it comes to that. Call (571) 626-7389 to schedule a consultation and learn more about your legal rights and options in your Virginia divorce.
