Role of Mediation in Divorce

Role of Mediation in Divorce

The divorce process can be a very emotional and trying time in one’s life. Often the process involves confrontations and complicated legal disputes. In recent years, divorce mediation has become more popular because it can be more effective, less costly, and yet a successful method for settling divorce disputes. Mediation is an alternative method of resolving matrimonial issues that are involved in divorce. It is a process in which couples can amicably work out marital, financial, and property-related disputes with the help of a neutral third party known as a mediator.

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Valuation of Closely Held Businesses in Divorce Proceedings

Valuation of Closely Held Businesses in Divorce Proceedings

Generally, divorce cases involving thorny property issues can be complicated to resolve. This especially is true when the marital estate includes a closely-held business. A closely-held business usually presents one of two scenarios in the divorce context. The business may be tied to one spouse who is responsible for the business’s success. Distribution of the business to one spouse often creates asset allocation and business valuation issues. It presents the problem of valuing the business and structuring the parties’ assets and liabilities in order to provide the other spouse with a comparably valued property distribution. If the business depends on the operating spouse’s good will and management, which many closely-held businesses do, then the true value can suffer under the emotional stress common in divorce even if the business is distributed to the key-person spouse. A business having one value when operated by the key-person spouse can have a far different value when distributed to the non-operating spouse.

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