Mediation in Divorce on the Rise

Kay Gilbert works at home as her 4-year-old yellow Labrador retriever, Hefton, looks on recently. Gilbert and her husband chose mediation to divide their property when their marriage ended. Helen H. Richardson, The Denver Post

Keeping it on an even keel was about all Kay Gilbert hoped for when she saw her 30-year marriage unraveling.

The consultant to budding nonprofits surmised that a protracted legal battle before a District Court judge would dissipate the resources and assets that she and her husband had acquired through the years.

“We just didn’t want to spend more than what was necessary and go before a judge to take our chances,” Gilbert said. “We’d heard of mediation and decided it was the best plan to try. You have to get through the blood-letting, to learn how to separate anger and reality and keep it focused on fairness.”

Gilbert is part of a growing trend in which splitting couples, still smarting from the shock of divorce and the toll of a slumping economy, are choosing to handle their own division of property.

In Colorado, couples filed separation agreements — generally, though not always, a precursor to final settlement decrees — in 72 percent of divorces last year, up from 60 percent in 2007, according to the Colorado Judicial Branch. The number of divorce cases filed rose from 2007 to 2010, then dropped slightly last year.

Gilbert said the couple spent extra time with a financial planner whose expertise was in divorce. She had heard too many horror stories from friends and acquaintances who had taken a divorce route directly through a judge.

“Among our friends, we were the ones not yet divorced,” said Gilbert, musing that her social network’s pains were her education. The final agreement needs a judge’s sign-off, which is still months away, she said, but is expected to happen without pause.

Too often, say those who work with divorcing couples, acrimony and emotional pain get in the way of clear thinking, leaving a judge to determine how assets are ultimately divided. The split is not always made in a way that both sides feel is fair.

“I’m certainly seeing couples not staying together because the financial situation is so bad; I’m busier than ever,” said Natalie Nelson, whose Denver business as a certified divorce financial analyst helps couples manage the distribution of assets, both in hand and to come.

A mortgage mess that put one in five Colorado homeowners under water — owing more than their property is worth — only served to heighten anxiety.

“Three years ago, you heard a lot of folks having a hard time grasping what was going on financially, having difficulty integrating their financial situations into any discussion of divorce,” Nelson said. “Now they say, with their tail between their legs, how they tried to pay off their debt before coming in for help. They’re in a very different place.”

Though a downward trend in divorce suggests couples are staying married longer, the reality is that many chose to hold on through the tough economy merely because they couldn’t fathom a financial beating with so little to show in the first place.

“When either side refuses to mediate or it’s unsuccessful, the judge always decides. We’re certainly seeing more people who won’t roll the dice in front of a judge, especially since they’re hurting financially already,” family lawyer Richard Harris said. “Whether it’s the 401(k), an underwater house, a pension, the kids’ college, custody and visitation, it’s 1,000 percent better to work it out without a judge.”

Though no hard numbers exist as to how often divorcing couples hammer out their own final settlements, Colorado Judicial Branch statistics seem to indicate more are, at the minimum, cooperating with each other.

Another item not tracked by court statistics are post-nuptial contracts, which are delicately balanced on the premise that the couple had no intent of splitting when they were drafted.

“Interestingly, a post-nuptial agreement by law can’t be made in contemplation of a divorce,” Harris said. “It’s not intended as divorce planning.”

As much sense as it might be to have one, especially in a day when many couples are in second marriages and shared assets can criss-cross complex family trees that include stepchildren, asking for a post-nuptial agreement still gives the wrong signal, experts say.

“It’s a great tool for estate planning, but the word itself, nine times of 10, the knee-jerk reaction is that it means there’s divorce in the air,” said Lili Vasilef, president of the International Association of Divorce Financial Planners.

“The trends in divorce are that more individuals are seeking to craft their own settlement agreements through mediation and collaborative divorce,” Vasilef said. “When the economy tanked, so many Wall Street types were tossing in the towel, too happy to get divorced because there wasn’t anything left to divide or negotiate. That’s different today.”

That’s precisely how it was seen by 52-year-old Simon, a Lakewood computer professional who asked that his last name not be used to protect his children’s privacy. He had a successful career in Los Angeles that tanked with the economy, taking his marriage with it.

“I held on for about three years, watching as we suffered through unemployment, went through minor savings, a car and a house,” Simon said of his 28-year marriage. “There really wasn’t a lot left to parcel out when it was basically over.”

Once Simon landed a job and the fiscal future looked more upbeat, he and his wife agreed to divorce. A long court fight wasn’t anything either wanted to face.

“Not only does it drag out and cost so much, there’s no point in getting stuck on stupid sentimental and emotional stuff,” he said.

Negotiating their own division of assets “wasn’t a cakewalk,” Simon said.

“It was devastating,” he said. “But the other side of the coin wasn’t appealing either.”