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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.

Property Division in Divorce: Insurance Benefits

In divorce, a critical issue impacting the treatment of insurance policies is whether the policy benefits are separate property or marital property. State divorce courts have reached varied answers on the question of whether a life insurance policy is separate or marital property. In some states, "whole life" insurance contracts have been held to be marital property and generally have been valued at their cash surrender value. "Term life" policies, on the other hand, which lack a surrender value, have not been considered divisible property. In states in which inheritances or gifts are classified as separate property, insurance proceeds usually are not treated as marital property for purposes of property distribution in divorce. Other courts have ruled that the proceeds of a life insurance policy purchased with community property should be treated as community property in a divorce.

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.

Property Division in Divorce: Presumption Relating to Marital Property

Property division in divorce generally affects only marital property, but some states allow equitable distribution of separate property. Marital property is presumed to be property that is acquired by both or either of the spouses during their marriage. Divorce courts divide marital property according to the classification schemes in controlling statutes or caselaw.

Alimony: Rehabilitative Spousal Support

Alimony awards, also called "spousal support," are usually granted at the court's discretion upon a determination, which takes into account certain factors, that spousal maintenance is necessary. Some of the factors considered when determining alimony payments include the education of the spouses, their respective work experiences, income histories, ages, health, the length of the marriage, and the time either spouse has spent out of the work force. Alimony may be either temporary (often called "rehabilitative alimony") or permanent. The court grants rehabilitative spousal support when one spouse has been disadvantaged in order to equalize the burden of the divorce.