Mediating The Property Settlement – Disclosure Of Assets

The role of the mediator in the divorce setting is multi-faceted. Legal information, counseling abilities and mediation skills are called on to support a mutually satisfactory settlement of the divorce issues.
One of the most important aspects of the mediator’s role is to ensure that clients are fully informed of the issues that are relevant and the options that are available before settlement decisions are made. This is especially important in the areas of asset disclosure.
In helping inventory a divorcing couple’s assets, the mediator must not only aid in their identification and valuation but also must be assured that all assets of the marital community have been fully disclosed. The use of effective methods of disclosure in mediation is crucial, since the normal discovery process used in the adversary system is rarely (though can be) used in the mediated divorce.
Prior to engaging in the mediation process, the parties have agreed in writing that they will provide a complete accounting of their assets by submitting financial statements, tax returns, bank statements, pension statements and inventories of real and personal property. They are also required to warrant in the final agreement that full disclosure has been made of all assets and obligations and a subsequent discovery of a failure to disclose will result in sanctions.
In addition to knowing how to evaluate financial documents, for example, matching a net worth statement with the information on a tax return, the mediator must listen with a “third ear” when disclosure of assets is discussed. Mediation is a personal and revealing process, and it is likely that people who are attempting to conceal or evade will communicate their actions in some way. The suspicions of a mediator with regard to lack of candor often are triggered by such clues as vague and contradictory answers and information, eye and body language that does not match verbal communications, or, frequently the suspicions of the spouse.
In addition to eliciting information in a non-judgmental way, a divorce mediator’s referral network becomes an important resource is uncovering assets. This network would include an accountant, financial professional, pension expert, in fact any professional who can assist in examining financial documents to make sure things add up or are appropriately valued by the spouse(s). Suggesting a referral to a professional is often sufficient for a party to be forthright. And, the findings of the expert will usually reveal hidden information, whether deliberate or inadvertent.
An important part of divorce mediation is that agreement has been reached prior to the onset of the process that the parties will fully disclose and fully cooperate in all assets of the mediated settlement profess. This agreement is a prerequisite for the parties continuing in mediation. If non-cooperation of any sort persists, including failure to fully disclose assets, a mediation impasse is called by the mediator, and the process will not resume until the issue is resolved. Fortunately, in mediation there is a self-screening process. Rarely does the individual enter mediation to get away with anything. Most often it is to settle differences cooperatively and peacefully and keep the family, especially the family with children, in good communication with each other.