In every divorce case the court will need to resolve various financial issues including child support, spousal support (i.e. maintenance) and property division. The Wisconsin Statutes and Administrative Rules set out presumptions and factors for determining these issues. See §§ 767.25, 767.26 of the Wisconsin Statutes and DWD 40 of the Wisconsin Department of Workforce Development.

Prior to attending mediation you should read and understand these rules and statutes. If you have facts in your case that are unique and fit into one or more of the factors, you should discuss those facts with your attorney prior to mediation.

Property Division

During mediation, your attorney will work with you to maximize your financial position. The better you communicate your facts before the mediation; the better your case will proceed. Attorneys generally prefer to reach a bottom line. In other words one party will keep certain property and certain debt and the other party will keep the other property and debt. The starting place for division of property is to divide the property equally with the exception of gifts and inheritance. Gifts and inheritance that were not commingled into marital property will remain with the beneficiary of that property.

It does not matter to the court if one party takes more debt or property than the other if each party receives an equal net amount. If, for example you had $200,000 in property at the time of your divorce and $150,000 in debt, then your combined net value would be $50,000. One party could keep $175,000 in property and $150,000 in debt and the other party could keep $25,000 in property with no debt with the result that each party would get $25,000 in net property. Often, however, one party will want certain parts of the estate and equally often both parties will want the same part. For example both parties may want to keep the marital home or one party may want to keep his or her retirement and the other party will want to divide the retirement. Look at sample balance sheets elsewhere on this WEB site for ideas about how to divide your property.

There are pros and cons to any division of property. If one party keeps the home, they may benefit from appreciation of the home. In other words, in five years the home may be worth significantly more than at the time of divorce. On the other hand, the cost of maintaining the home may put the party that keeps the home at a disadvantaged position. A party without resources to pay for the property taxes and mortgage on an expensive home may be better off to move into a less expensive home and keep a substantial amount of the retirement – an asset that will hopefully grow in value without the need for continued investment.

In some cases there will be a legal basis to deviate from an equal division of the property. For example, the statutory factors provide for a deviation in a short term marriage where one of the parties to the marriage brought substantial net worth to the marriage and the other did not. In other cases, the parties may want to provide that one of the parties get more than half of the property as a maintenance "buy out."

Maintenance

When there is a substantial difference in income between the parties in a long term marriage, there are a number of statutory factors the court will consider in the context of having one party provide support to the other on a short or long term basis. Sometimes it makes sense to meet that obligation by letting the lower income spouse keep the majority of the net value in property. For example, if the lower income spouse kept the home with a small mortgage payment that party may be able to maintain a similar lifestyle as enjoyed during the marriage with less monthly cash flow.

Parties should discuss all of these nuances with their attorney prior mediation. By having all of the property issues included in a balance sheet prior to mediation, attorneys can help parties to reach an appropriate bottom line. Typically a bottom line includes division of the property such that each party gets some of the debt and some of the assets. One party may keep more of the retirement plan so that the other can keep a the equity in the home. Often there is a balancing payment where the person who keeps the home, retirement or other substantial asset must make a reconciliation payment to the other party to equalize the property division. By having a reconciliation payment each of the parties can keep certain items of property that may not neatly offset property awarded to the other party. It is often the reconciliation payment that represents the final distribution of the property. It is very important for parties to understand what the reconciliation payment represents when mediation is attempted.

It is not unusual that divorcing parties will place significance on items that are relatively minor in the big financial picture. One party may have been frustrated throughout the marriage that the other party never paid the phone bill. At the time of mediation the phone bill may have reached several hundred dollars. In the context of dividing an estate with a net value of $200,000 or more in net value, that $600 phone bill is not particularly relevant, but, it may have become an emotional issue that led to the divorce. Attorneys will want to assemble the entire property division into a package that divides all property and debt with one reconciliation payment if applicable.

The Bottom Line

Often the parties will resolve almost all of these issues in mediation with parties holding onto their minor issues until the last minute. For example, their attorneys will help them determine who gets the house, who gets the retirement accounts, who pays what debts and what amount would be an appropriate reconciliation payment in the context of equal division of property, or maintenance buyouts, or deviation from equal division. Attorneys will often approach the bottom line believing that all issues are resolved when one party will bring up the final phone bill or other emotional issue. It becomes frustrating for lawyers to attempt to finalize the bottom line when the parties continue to open up minor skirmishes as mediation approaches a final resolution. Thus, it becomes important for the parties to air all of their minor issues well ahead of time in their balance sheets so that all property issues may be resolved. It does not make sense to spend $300 or more on attorney fees for two or more attorneys to sort out who is going to pay the $80 gas bill. Understanding your emotional need to get that $80 gas bill paid prior to going into mediation may save you a lot of money in attorney fees.

There is no exact science. No one will know exactly what your home is worth, what your cars are worth or what you retirement is worth. If you are sincere in your efforts to participate in financial mediation, compromise is key. If you are very creative you may find a way to divide all of your property so that each party gets one-half of the net value without a reconciliation payment.