Monday, November 19, 2007

Divorce Mediation Live Internet Talk Show

I am always searching the Internet to grab any information I think might be helpful to those considering mediation of any type of dispute so I can post it on this blog. I came across this useful press release article regarding an Internet Radio Talk Show which discusses "Myths & Facts of Divorce Mediation." There are live Internet shows and archived Internet shows as well.

Below is an excerpt from the article or click here to go the full article which provides links to the shows:

Divorce Mediation: Myths & Facts, the first show of its kind in the country, educates and informs listeners about mediation - the legal alternative to the expensive battle of divorce litigation. Less than a year old, the show is already proving to be a tremendous success. In its first 10 months the show more than tripled its listening audience, unprecedented growth according to show producer Brian Travis. "Mediation is turning the legal system upside down as more and more people recognize the limitations and costs associated with litigation," says creator and host Philip Mulford, J.D., a professional mediator since 1990 and formerly a practicing attorney. "This show sheds light on an alternative that keeps divorcing couples out of court and saves them thousands of dollars. Despite those benefits and growing awareness, mediation is still often misunderstood and underutilized."

Sunday, November 11, 2007

"Trading Dispute? Try Mediation" - WSJ

Here's a good article from the Wall Street Journal discussing mediation and arbitration in the context of trading disputes. The information WSJ provides regarding the pros and cons of these alternative dispute resolution methods applies to all types of cases and is a useful read for anyone considering mediation or arbitration. (Click here to go to this WSJ article).

Trading Dispute? Try Mediation.
November 4, 2007

A recent Congressional hearing highlighted the continuing debate about the fairness of requiring investors to take disputes with brokers to arbitration rather than to the courts. Some in Congress want to change the rules.

But in the meantime, brokerage customers who feel they have been wronged also have another option: mediation. Mediation can be quicker and cheaper than arbitration -- and investors who enter mediation retain the right to proceed to arbitration if they aren't satisfied.

"The best part of mediation is you can say 'Yes' or 'No,' " says investors' attorney Phil Aidikoff.

"You're never going to get a number as high in mediation as you would if you hit a home run in a hearing," he adds. But "it takes the uncertainty out of the case."

Agreeing to Arbitrate
The paperwork you sign to open a brokerage account generally requires you to bring any disputes to the arbitration forum run by the Financial Industry Regulatory Authority, the self-regulatory body that oversees brokerage firms. Finra's arbitration forum is a court-like system in which large cases are heard by three-person panels that include one industry representative. (Small cases are heard by a single non-industry arbitrator.)

Finra and the securities industry say arbitration is a quick, fair and effective way to resolve disputes. But investors' advocates and some members of Congress say Finra's arbitration forum is unfair to investors, partly because of the presence of industry arbitrators. At the very least, they argue, investors should have the option to sue in the court system.

Earlier this year, Sen. Russell Feingold (D.-Wis.) and Rep. Hank Johnson (D-Ga.) introduced a bill to nullify mandatory arbitration agreements in consumer industries.

Investors are "compelled to use an arbitration forum run by the industry's self-regulator under industry-approved rules," lawyer and arbitration critic Ted Eppenstein testified at a House hearing on the subject in late October.

The Mediation Option
An investor with a gripe against her broker may, typically with the help of a lawyer, file an arbitration claim against the broker and/or the firm. But at any point in arbitration, either party can suggest mediation without interrupting the arbitration process.

If the parties agree to try it, they choose a mediator -- either someone from a Finra-provided list or another mediator they both trust. Selecting a date for a mediation session tends to go much faster than in arbitration, where the parties, three hearing panelists and expert witnesses all must find an acceptable date.

Indeed, mediation is much faster overall: So far this year, it took an average of almost 14 months for an arbitration claim to make its way through the system, Finra reports. Finra mediation cases during that period closed in an average of just over four months.

Before the mediation session, the mediator reviews the parties' documents, and may contact them to learn more. On mediation day, the parties might tell their sides of the story before splitting into different areas. The mediator typically goes between the sides, assessing the strengths and weaknesses of each side's case, relaying messages and possibly suggesting settlement ideas.

About 80% of the time, the parties reach an agreement, either that day or after subsequent discussions, says Ken Andrichik, senior vice president and director of mediation and business strategies at Finra. Other cases proceed to arbitration.

Mediators' rates can run from $50 an hour for a small case to $500 an hour for a large case in a big city, according to Finra. There can be forum charges as well. But if a settlement is reached, you can save some of the legal fees that would add up over an extended arbitration proceeding.

Pros and Cons
Lawyer Steven Caruso, past president of the Public Investors Arbitration Bar Association, a group of attorneys who represent investors, says a potential conflict of interest exists for mediators: "They want to do a fair job, but they're going to get more business from the brokerage firm than the claimants' attorneys." That said, he and other investors' attorneys say they know mediators that both they and defense lawyers trust.

Although some lawyers worry about tipping their hands in mediation, others say mediation gives them a chance to test their cases before bringing a weak argument to an arbitration panel.

The downside to mediation is that if the parties don't settle, mediation may just add time and expense to the process.

On the plus side, though, a mediator may be able to bring an investor's expectations back to earth. Sometimes an investor can't see that his case doesn't warrant a huge award.

Perhaps the biggest benefit of mediation is the degree of control the parties have, from picking the mediator to accepting or rejecting a settlement.

"It makes sense for even an adversary to say, 'Can we solve this in a less adversarial manner and can we keep control of the outcome?' " Mr. Andrichik of Finra says.

Monday, November 05, 2007

More Reasons for Prenuptial Agreement Mediation

As detailed in a previous post, mediation of a prenuptial agreement allows both spouses to sit together with a mediator to create an agreement regarding their marital finances while still preserving their romantic relationship. I have pasted below an article which outlines some of the problems which can arise without a prenuptial agreement. For more information on prenuptial mediation, click here. Here is the full text of the article from MSNBC titled: Love and money: Is marriage a dumb move? Money magazine on whether a walk down the aisle will hurt your finances:

Falling in love after years of building wealth can make life complicated. Tying the knot can sometimes make it worse. Money magazine takes a look at whether marriage means happily-ever-after for your finances:

Michele Mann was doing just fine on her own, thank you. She had launched a successful interior design business, which now earns her about $100,000 a year. She'd nearly paid off the two-bedroom Phoenix condo she had bought for $450,000 in 1992. And she'd amassed a handsome portfolio.

Then, two years ago, the never-married Mann, now 56, met Charles Wally, 67, a divorced retired rancher and insurance executive who lives in nearby Scottsdale, and love changed the game plan. "We were on the same page about so many things in life," says Mann. This month they'll wed.

Mann and Wally are a conventional enough couple that not getting married never crossed their minds. But these days it occurs to plenty of other couples of a certain age and wealth who are put off by the risk and inconvenience of joining two financially mature households.

It's a matter of security and ease: Had Mann and Wally simply opted to live together, for example, they wouldn't have had to deal with sorting out the ownership of two homes, deciding on a succession plan for Mann's business or protecting the inheritance for Wally's four kids from his two previous marriages.

No wonder that over the past decade the number of unmarried partners over the age of 65 has increased by 70 percent. The decision to wed or not, of course, is between you, your intended and your conscience. But you should realize that from a cold-hearted financial perspective, the U.S. tax code and Social Security rules don't necessarily come down in favor of marriage for people with a substantial amount of assets.

True, you'll automatically reap certain legal benefits from tying the knot, such as access to employee perks or a greater voice in health-care decisions. On the other hand, you may find yourself paying a significant price, from lost income to higher taxes. So whether you plan to say "I do," or "Let's not," be sure to ask yourself these questions first.

Will marrying lower your income?
You no doubt realize that if you're collecting alimony from your ex, you'll likely give that up when you remarry. But you may not have considered the effect on your retirement income. Remarry before age 60 and you'll lose any Social Security income you're entitled to from a previous marriage. Ditto for a pension. "If you're retired or one spouse is widowed, you're often better off just living together," says Kirk Kinder, a financial planner in Bel Air, Md.

But matrimony may triumph in this regard: It entitles you to a cut of your new wife or husband's pension and Social Security payment, and that sum may be larger than you otherwise would have collected. Get estimates for both scenarios from the Social Security Administration (use the "Detailed Benefit" calculator ) and your company pension-plan administrator.

Marriage can also affect the taxes you'll pay on your Social Security benefits. As an individual you can earn $25,000 a year before your Social Security benefits are taxed. As a couple, your total income can't exceed $32,000 (for more on what counts against that threshold, see "Working in Retirement: The Real Story" .)

Will marrying raise your taxes?
You may pay more income tax today if you file jointly, but much greater tax savings could come your way later. You can inherit all your spouse's assets tax-free, but an unmarried partner must pay federal estate taxes on any amount over $2 million through 2009. (In 2010 the estate tax disappears, and the exemption goes down to $1 million in 2011.)

If you plan to sell a home, you'll double how much of your profits are free from capital-gains taxes ($500,000, vs. $250,000 for a single person). Both own homes? Consider living in the place you want to sell and renting the other for two years to qualify for the $500,000 exemption, says Dallas financial planner Sean Monohan. After that, move to the home you plan to keep.

Will marriage increase your liabilities?
As a married couple, you'll usually pay lower auto insurance premiums. You may also do better by joining your new spouse's health insurance plan. As a self-employed person, Mann estimates she'll save $265 a month when she's added to Wally's retiree health insurance plan. On the flip side, being married can legally obligate you to shoulder some big expenses, such as your spouse's loan payments or credit-card debts.

Will it disinherit your kids?
If you have school-age kids, be aware that that your new spouse's income and assets will count in financial aid formulas, possibly lowering any help your children will receive. Adult children can pose a different problem: Because marriage would give your spouse first dibs on your estate, you'll need to draft a new will and possibly a trust with the help of an estate-planning attorney to keep your kids' inheritance intact.

For Mann and Wally, the hassles are a fair trade-off for building a financial future together. The couple have already made some changes to their wills - Wally is leaving Mann his house (worth just under $1 million) - and their life insurance policies. And the pair are seeking legal advice on how to handle their other assets and their estates. "On the way to the altar, there's yours, mine and ours," Mann says. "And there's trying to keep the romance alive during it all."

3 fast fixes for Mann and Wally
Choosing to marry has created some financial challenges for the couple. Monohan offers this advice for a lasting union of heart, mind and money.

Decide if the business is theirs or hers. Unless Mann and Wally sign a legal agreement specifying individual ownership, the couple would share the income as well as any liabilities from Mann's interior design business. And half would become part of Wally's estate should he die while the business is running.
Move to her house. Mann plans to sell her condo, estimated to be worth $1 million, eventually. As a single person, she can exclude only $250,000 of her $550,000 expected profit from capital-gains taxes. But if the couple live in the house for two years after they marry, they could keep $500,000 tax-free.
Use insurance for bequests. Wally wants to leave money to his four children, and Mann hopes to provide for her niece and donate to charities. They could do so by updating their wills, but a simpler method would be to make their heirs, instead of each other, the beneficiaries on each of their life insurance policies.