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Episode 46 Transcript: Filing in Court During Mediation

I wanted to speak to something that comes up, a question that comes up for a lot of mediation clients, and that is whether or not they should file for divorce in court before or during the mediation process. 

Without question, if you go through a mediation and you want to be legally divorced, you’ll have to file in court by the conclusion of the mediation process. There’s no way to be legally divorced through a mediation without ultimately filing in court. 

That said, there is a legitimate question, a sort of legal or strategic question, as to whether or not you want to file in court before the mediation process or during the mediation process, let’s say before the mediation process is concluded. So I wanted to speak to that briefly.

The first thing I want to say about it is that because this is a legal or strategic question, it really is something that I can’t speak to in your particular situation and it’s important that you raise it with your own attorney or at least with your mediator to understand the different considerations that you want to have in mind when making that decision and the pros and cons from your perspective. 

Generally speaking, filing in court often changes the financial landscape of divorce in a couple of ways, at least in New York. When you file in court, the accumulation of your marital property stops as of that filing. So if you go on to make money after the date of filing in court, that money that you made after the date of filing in court, and I’m generalizing, there are some exceptions to this, but that future money is not considered part of the marital pot. 

If there’s a big disparity between the spouses’ earning power and one of the spouses is the one who is really accumulating assets through their earnings, that spouse may feel like, “Well, now that we’re divorcing and we’re in this mediation process, I want to make sure that the extra money, the extra savings, that I’m accumulating above and beyond the income of mine that goes to paying our expenses, I want those extra savings to be mine going forward now that we’re in a divorce process.” 

On the other hand, again, if there’s a financial disparity between the spouses, the spouse who is not accumulating the assets would not be so interested in cutting off the accumulation of marital property as of the beginning of their divorce. They may be partial to continuing to accumulate marital or shared property during the divorce process and would hope that whatever was accumulated would be divided at the end of the process. 

The other thing of financial significance that often happens when you file in court is that if one or both of you make a request for any kind of financial support, child support or spousal support, alimony, spousal maintenance, those requests, if you go all the way through the litigation process and a judge makes a final decision in your case, which statistically is very unlikely to happen, you’re very likely to settle. But if a judge makes a decision in your case on, let’s say, child support, and the judge awards you child support, generally the child support that’s awarded goes back to the date on which you first asked for child support. 

What’s the significance of that? Think about if you started a divorce mediation process and you also filed in court asking for child support. You got your request in right at the outset of the process and you didn’t do more with the divorce case. You worked it out in mediation, or let’s say you worked in mediation for another year but you weren’t able to come to a resolution. 

There would be a significant financial difference to you if you had made the child support request a year earlier and thus were entitled to child support for that entire year that you had been negotiating in mediation versus if you took a year to negotiate in mediation, ultimately found out that you were not able to reach a settlement, and only then that year later made a request for child support. 

So, for many people, there’s a legitimate strategic question as to whether or not they want to file in court and both stop the accumulation of shared or marital property and/or initiate the formal request for financial support from the other spouse. 

I should say also, it’s not just the accumulation of marital or shared property that is stopped. It would also be debts. For instance, if you had a concern that your spouse were accumulating massive debt that you wanted to ensure was not considered part of the marital or shared debt that would be divided between you in a divorce, you might want to file in court to draw that line in the sand and say, “Hey, further debts that you accumulate going forward, if they’re in your name,” as opposed to in joint names, “if they’re in your name, are not going to be part of our negotiation of the debt we’re sharing in this divorce process.” 

The challenge, though, that comes up when you draw that line in the sand and say “Okay, from here on out, everything that I’m earning and accumulating is my own and it’s not going to be shared” is that that forces the issue of financial support, if that’s relevant in your case. 

So if you do not have kids and you are roughly equal or similar earners, financial support, child support, spousal support may not be relevant in your case. But if it is an issue in your case, when one party makes a decision to draw a line in the sand and say “Okay, from here on out, everything that I earn is mine,” oftentimes the other party, who may be the lower earning party, is forced to say, “Okay, wait a minute. Well, then I need support. I need you to start paying me support.” 

And the challenge is that at the outset of a case or even in the middle of a case, it’s uncommon for the couple to know exactly what support amount they’re going to agree on. 

Sometimes what I’ll see people do is say, “Listen. We don’t know what amount of support we’re going to agree on because right now we’re not in agreement about support, but here’s what we’ll do. We will continue putting our incomes into the joint account,” or if you don’t have joint accounts, “paying for marital expenses as we have been. We’ll continue covering all our marital expenses. However, to the extent there’s extra money above and beyond our marital expenses, so to the extent we’re accumulating savings, then this person is entitled to reserve X amount of their income as their own separate savings, that we’re not going to keep putting all the savings accumulated into the marital pot. We will keep the savings sort of to the side and each person will be entitled to accumulate an agreed upon amount of savings. But in order to not have to come up with the exact amount of support right now at the outset of our process, we will say that we’re going to continue paying for our marital expenses as we have been and then whatever is saved above and beyond that can be each person’s separate savings.”

The other thing to keep in mind if the prospect of filing in court sounds appealing to you for the reasons that I’m discussing is that sometimes you can accomplish the same thing through a contract, an interim agreement between the spouses. 

For a variety of reasons, the decision to file in court, especially for couples in mediation who aren’t otherwise anticipating going to court, can feel at odds with their mediation process, so they may not want to file in court but they may want some of the benefits that come with filing in court. 

If that’s your case, you want to talk with your attorney or your mediator about the possibility of you and your spouse contracting around the very same financial issues that would be resolved by a court filing, so stopping the accumulation of marital or shared property or debt and coming up with some kind of interim support arrangement. Those things can often be done by contract if you do not want to take the actual step of filing in court. 

Episode 47 Transcript: Dividing Retirement Assets

Episode 45 Transcript: Moving Out of the Marital Home