Any divorce has the potential to be emotionally and financially draining because every divorce touches on unpleasant topics as the marriage unwinds. The traditional route for divorce settlement is litigation—fraught with attorney fees, far-off court dates, and a public disclosure of your private details. Mediation has increasingly become a popular option, offering savings and, for many clients, a better experience.

High-asset divorces, however, bring unique complications. How you choose to proceed can have far-reaching impacts on your future. Let’s consider how mediation and litigation compare in high-asset divorces.

You Can Save Time and Money with Mediation

There are many benefits to trying mediation, but perhaps the most appealing aspects are the savings in time and money. You can expect an average total cost between $3,000 and $8,000 to resolve your divorce through mediation. This is in comparison to between $15,000 and $30,000 per party to litigate a divorce, with complex divorces exceeding $100,000. Parties engaged in mediation will also control the timeframe of their resolution. This is not the case for parties engaged in litigation, who must navigate a very busy court system and competing legal strategies.

Mediation Has Its Own Rules

Mediation is vastly different from the adversarial process used in litigation, and it requires a different mindset. Mediation aims to find common ground in a private and confidential environment, with the parties leading the process. This approach can lead to an experience where clients leave feeling empowered with a durable resolution that they built themselves. By contrast, litigation involves retainers, court schedules, and a judge deciding the outcome.

Effective mediation creates a dialogue between the divorcing parties in a way that litigation cannot. Mediators will encourage the parties to think creatively and listen actively to create a resolution that will last. In fact, participants are encouraged to lead the negotiation phase of mediation, and this can be an empowering experience compared to litigation, where clients are told how the law will resolve their case.

Why wouldn’t someone choose a non-adversarial process that saves time and money? Well, it depends.

For a successful mediation, you need a partner who is willing to come with the right mindset. If your soon-to-be ex-spouse won’t entertain novel approaches or listen to your side of the story, mediation may not be for you. If you can’t stand the idea of a conversation with your ex, mediation may not be right for you.

Parties that agree to take part in a mediation also agree to keep information shared during the session confidential (except for any signed agreement). Similarly, mediators can rarely be called to testify in subsequent hearings.¹ Mediations are designed to be confidential to encourage a free exchange of information, which is all based on trust. Maybe you want to discuss a tax debt you’ve been paying off without it becoming public knowledge. This issue can be addressed in mediation to the satisfaction of both parties without disclosure to a court. It’s a space in which you can safely explore negotiation options.

A High-Asset Divorce May Need the Protections Offered by Litigation

For all the perks mediation offers, there are some significant drawbacks that could impact a divorce resolution, particularly one involving high-income assets. The very nature of mediation is built on trust—trust that the participants share information openly and honestly.

But what if your partner has a record of not being trustworthy or has manipulated you in the past? Can you rely on that person to be honest in your mediation, potentially affecting the valuation of assets or future income?

If your spouse does not disclose all their bank accounts, for instance, you may find yourself negotiating a poor agreement. When you choose litigation, you and your ex-spouse will engage in a formal discovery process, and if you have concerns, you can take advantage of tools such as a forensic accountant.

Is the law on your side? Let’s say you have a strong argument for spousal support that your soon-to-be ex scoffs at. In mediation, you two will discuss spousal support, and you’ll both be guided to consider various resolutions. Your mediator may review any documentation you bring to your session, but he or she will not provide legal advice. Mediation requires that you be comfortable speaking up for your interests. Will you be negotiating away something that you could successfully litigate? For example, divorce statistics show that women over 50 experience a greater decline in their standard of living after divorce than men—an important consideration when deciding between litigation and mediation. [5]

Conclusion

Mediation and litigation both have pros and cons. Mediation is a strong choice for resolution because it saves time and money and can help ensure there’s a long-lasting agreement supported by both parties. However, some cases are not right for mediation. Mediation relies on honesty and full cooperation. Without that, one party may be able to manipulate the other into an unequal agreement. Both parties need to come to the mediation session with an open mind and a willingness to listen.

Assuming both parties are good candidates for mediation and come to the session on equal footing, consider what you value. Do you want a resolution built by the two of you? Do you want a speedy resolution? Or would you rather have the formalities provided by the court?

1. See CAL. EVID. § 703.5 (1995).