Relationships do not always work out as expected. Conflicts and misunderstanding sometimes arise. In some extreme circumstances, break ups become inevitable, however unfortunate. When a couple is breaking up, dividing up property and financial obligations between them is unavoidable. The decisions to be made in this regard are not always easy. Some of the issues that usually arise is how to work out income, assets and liabilities, how to share the assets, liabilities and incomes, how to handle the debts jointly incurred, maintenance for the spouse and child support and so forth.
The necessity of this gives rise to the act of sorting out finances. Different approaches of sorting out the finances may be employed. Mediation is one of them. This is where a neutral and independent party comes on board and aids the couple in this process. Sorting out finances using mediation is a process aimed at reaching a consensus on how the finances of the couple are to be shared between them. Sorting out finances using mediation is often advantageous since the mediator ensures neutrality and hence fairness. More often than not, none of the partners will be disadvantaged.
The first step in this regard is to get a full financial disclosure and set it out in a format referred to as Schedule of Assets and Liabilities.To obtain this, the mediator issues disclosure forms to both partners. This is to ensure that none of the partners hides any financial information which may be unknown to the other. Concealing such information may lead to one partner being unduly disadvantaged. The information is normally filled in those forms in such a manner that it meets the threshold of acceptability before a court of law.
Then, the mediator helps each of the partners to understand and identify their assets, financial obligations, revenues and expenditures. This will include helping them to correctly classify their assets, liabilities, revenues and expenses. The necessity of this in the process of sorting out finances using mediation is that it helps to evaluate available options and the likely effects of undertaking either of them. Each of the partners will then give suggestions on how best to divide the finances. The mediator aids in the negotiations and in reaching the agreement on sharing the finances between. This is aimed at ensuring fairness prevails.
Moreover, the mediator will help the partners identify necessary tasks during and after the process of separation and hence be able to make good choices. Keeping records for the mediation process is also a necessary endeavor and the onus rest with the mediator. The need for the records is that the same will be of great help should one require legal advice to supplement the mediation. Lastly, the mediator will prepare a document outlining all the proposal and agreements arrived at by the partners. This document is called the Memorandum of Understanding. The Memorandum of Understanding is not in itself legally binding but it will be used in making the agreement of the partners legally binding.