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  • Meet Your Match (cont)
  • By Barbara Drury
  • Sydney Morning Herald
    Page 2 of 2
  • 22/06/2005 Make a Comment
  • Contributed by: admin ( 47 articles in 2005 )
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Marianne and David* had been married 25 years and had three children, with one still living at home, when their marriage ended.

David was a director in his family's business, while Marianne looked after the household. David was secretive about money and all assets other than the family home were held in his name.

The couple arranged a mediation conference through their lawyers to see if they could reach an agreed settlement. Marianne says that, despite having all the figures in front of them, David made a very low offer which she refused.

"I realised then he didn't want me to have anything, so I decided to fight," she says.

After 13 return dates at the Family Court and almost three years after their separation, Marianne was awarded significantly more than she had originally asked for at mediation plus her legal costs of about $500,000. She estimates David's legal costs were a similar amount.

"I would have accepted slightly more than his original low offer but less than the court outcome," Marianne says.

Meanwhile, in another city, James and Elizabeth* had agreed to end their 16-year marriage. They had two dependent children and both were working.

After consulting lawyers and doing their own research about the divorce process and its impact on children, they decided they would be better off trying to reach a financial settlement themselves.

Elizabeth says that after a series of meetings, they were both entrenched in their positions and couldn't move forward, so they decided to try mediation as a last-ditch attempt before going to the Family Court.

"We want to keep a friendship for all sorts of reasons, including children, which was another reason to do [mediation]," James says.

They had four mediation sessions over a six-week period at Relationships Australia, each lasting no more than three hours. A male and female mediator were present, a factor James says made them both feel more comfortable. Mediation cost the couple $2000 all up, but they expect additional legal fees will add at least $10,000 to their total costs.

Even though the mediation was not confrontational, the couple found the process extremely difficult and often emotional, but worth the effort.

"Mediation gave us a chance to air our points of view in front of people who knew the [divorce] process but were completely neutral. We got an understanding of how the court might view things," Elizabeth says.

"I realised I would have to compromise and I think James realised the same thing. But we were in control of the outcome: it was not in someone else's hands. You can pull the plug at any time, even once the mediators have put an agreement together.

"No one feels they won, which is a good thing."

*Names changed


The purpose of mediation in the lead-up to divorce is to provide an independent third party to help couples resolve disputes over property and the care of children. In other words, mediators are there to broker a compromise, not to tell people what to do.

A family law specialist, Alexandra Harland of Watts McCray and Co, says child support, contact and residence issues often need to be resolved in order to reach a property settlement, but that mediation can cover all these issues.

"Even if it is not successful, mediation often crystallises issues and narrows what's in dispute," Harland says. "It is always better for the parties to come up with a resolution they can live with rather than an imposed solution. The trick is to have all the [financial] information you need to do it effectively."

There are different avenues for mediation in the lead-up to divorce, depending on your resources. At one end of the scale are government-funded organisations such as Centrecare and Unifam, where fees are based on clients' incomes. They provide mediators but lawyers are usually not present.

Relationships Australia is also accredited by the Family Law Act to provide mediation services. Lawyers are not required, although a couple will take any agreement back to their respective lawyers. For property and financial matters where there are no children involved, mediation costs $85 a person an hour. When children are involved, a sliding scale is used based on income.

Anne Hollonds, chief executive of Relationships Australia (NSW and Victoria), says more often than not couples choose co-mediation with a male and female mediator working together.

Mediation with a trained mediator can also be arranged through your lawyer, where each party attends with their own lawyer. The mediation service costs each partner about $660, excluding their lawyers' fees.

For advice from the horse's mouth, you can hire a retired Family Court judge or an experienced barrister to mediate for the day for $3000 to $5000, depending on their seniority, plus costs for your lawyer.

While the cost might seem high, it is significantly less than the cost of fighting in the Family Court, and it provides a certain outcome.

Sally Nicholes, a partner at Kennedy Wisewoulds Lawyers, says it is often difficult to predict how a judge will decide to split property.

The mediation conference can take anything from three hours to all day. It is not for everyone, though. Harland says she would not recommend mediation for disputes that are highly emotionally charged or for cases where being in the same room can aggravate negotiations.

Hollonds says that when both partners want mediation to work it can be very successful and a lot cheaper and quicker than fighting through the courts. But even more important are the emotional benefits.

"That is especially important where kids are involved, because ongoing conflict causes the greatest damage to kids over the long term, even if disputes are not about the kids themselves," she says.

"Reaching an agreement over property is a good start to a lifetime of co-operation over the kids."

To find a lawyer or mediator: Law Society of NSW,, and the Law Institute of Victoria,


Prenuptial agreements are becoming increasingly popular for wealthy individuals, but even couples who don't feel the need for these binding financial agreements are wise to plan for the possibility of separation or divorce.

"Plan for [marital] success, but plan to be financially independent from your partner," says AMP financial planner Andrew Heaven, who thinks it is time to alter our financial approach to marriage and partnership.

Many young couples put their financial focus on saving a deposit for a home before one partner, usually the woman, takes time out of the workforce to look after children while the other partner continues in full-time work. This leaves women seriously disadvantaged in terms of super and wealth accumulation.

Heaven says a practical way to deal with this financial inequality is to aim to accumulate assets in both names, so the retirement buckets are similar for both partners. While this is a sound financial strategy for couples who stay together, it also makes life simpler for couples who divorce.

From July 1, couples will be able to split their super contributions with a lower-income or non-working spouse. Now that super is included in property settlements, there is no incentive for wealthy partners to attempt to quarantine money in super.

If you do separate, Heaven suggests both partners do an immediate financial stocktake and put an action plan in place as soon as possible. Work out the value of your joint assets and do a budget to assess how much money you will need to live on and how much you are spending. "If someone in this vulnerable time is spending money they don't have, then life could be very difficult for them in future unless they change their habits," Heaven says.

You need to consider everyday expenses such as utility bills, food and clothing, but also one-off expenses such as moving costs, new household purchases and professional fees such as legal, counselling or accounting fees.

Other questions people should ask are what government benefits they are entitled to, if they need their own life insurance and whether they need to change their will. You may also need to seek advice about managing debt more effectively, using your divorce settlement wisely and planning for retirement.

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