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Dirty Tricks in Divorce Mediation - Equitable Distribution

Unlike Parenting Plans where each party tries to have the best interests of their children in mind, when it comes to money, those rules go out the window and the arguments over who gets what, take over. With regard to the distribution of assets and liabilities, some of the tricks I've seen clients attempt to use in order to gain advantage over the other party in mediation include:

  • Using a "power imbalance" to manipulate the division of assets - Power imbalances are when one party has an advantage over another party because the first party possess some level of understanding of a subject that the other party does not. This is especially true when it comes to finances as when it comes time to divide the assets and liabilities, the person who is in the know, makes an offer which on the surface seems fair but in reality it's not. To avoid this, bring in an accountant and a financial advisor to review the proposed settlement so you can understand the tax implications, the impact on your retirement and gain a better understanding of what types of assets you will have left in the end. Do the assets fit your tolerance for risk? Does it leave you with a series of taxable assets? Can you liquidate them easily if you had to? All important questions that a financial professional can answer for you.

  • Dismissing the value of an asset or liability - Too many times I've heard the following phrase "oh don't worry my pension /401k / bank account isn't worth that much so we don't need to look at the statements. Besides we already agreed on how we're dividing it before we got here." Really? Show me the statement anyway and we'll let both of you decide if it's not worth talking about. Guess what? 99% of the time it IS worth talking about.

  • Liquidating accounts or racking up debt as a means of retaliation - divorce can trigger a number of emotions, one of which is anger. If one party wasn't expecting it, their first reaction may be to retaliate and that may come in the form of emptying bank accounts or racking up debt. So if you think your decision to divorce will come as a surprise to the other party, before you make the announcement, make copies of your most recent financial statements including bank accounts, 401k statements, credit cards, etc. as well as take inventory and get appraisals on the items you own that are worth something such as art, collectibles, antiques and jewelry. This way in case your soon to be ex decides to sell everything on EBay, you can at least account for their value and with any luck, be compensated for their worth during the equitable distribution discussions.
The good news is while NJ isn't a "50/50" state, we do subscribe to the concept of what is "fair and equitable" and in doing so, most people know what is fair and equitable even though the begrudgingly agree to it in mediation. With that in mind, stay on your toes and don't be afraid to ask for financial help if you need it. There are many talented people out there from financial planners to accountants who can help you determine what a fair and equitable settlement, whatever your needs may be.


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New Jersey is an equitable distribution state, meaning that the division of property in a divorce is to be done fairly, not necessarily equally. The court can take into consideration any factor it deems relevant when dividing property, but it must consider certain factors, such as how long the couple was married and the age and health of both spouses, the income or property brought to the marriage by each spouse, the standard of living that was achieved during the marriage, and the extent to which one spouse may have deferred career goals, among others.
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