DIFFERENCES BETWEEN DIVORCE MEDIATION AND ARBITRATION
The divorce process is not easy for anyone involved. Move further into the process of dealing with an equitable distribution of assets and you may be approaching the nightmare level. Today let’s discuss the division of pension assets during divorce and how the process differs depending upon the divorce process, either mediation or arbitration, that is selected by the parties to the divorce.
Mediation or Arbitration?
There are several differences between divorce mediation and arbitration. Both processes are considered less expensive alternatives to going to court to settle things. For spouses who choose mediation, they retain the services of a trained divorce mediation lawyer who will work with both parties throughout the entire process. The mediation process allows both parties greater control over the whole process, from start to finish, while working with an experienced divorce mediation lawyer who wants to assist both parties in reaching a mutually agreed-upon settlement.
This compares to the arbitration process, another alternative dispute resolution approach that comes in two forms, one binding and one non-binding. Under the binding option, the final decision is made by the arbitrator and is binding on both parties, just like a decision made by a judge in court. Under non-binding arbitration, the arbiter still makes decisions but, like in mediation, both parties need to agree to the decisions before they are binding on them.
Divorce Pension Payout
Mediation involves the active participation of both parties in the division of financial assets and liabilities, including deciding issues of pension rights and the final divorce pension payout. If arbitration is selected, the parties present their asset division proposals before the arbitrator, who makes the final decision of the division of assets and liabilities. In most states, including New Jersey, retirement assets acquired during the marriage are considered as marital assets and, as such, should be equally divided among the parties.
Divorce and Pension Plans
When dealing with divorce and pension plans, the final division of assets is a complex one. Retirement assets usually fall into one of two categories. Defined contribution plans, such as IRAs and 401Ks, consist of a certain value of assets that can be easily determined each day. Such assets are easier to divide than those that are held in defined benefit plans, most commonly pension plans. Arriving at the value of a pension plan is more difficult, as the payout from such plans is an amount not certain until the person reaches retirement age.
Divorce Settlements and Pension Rights
Various formulas are used in calculating pension values, but it shouldn’t be hard to see that the area of divorce settlements and pension rights can be a big area of contention among the parties to a divorce. Under mediation, the parties can negotiate and can mutually agree on what they consider an equitable distribution. Under the arbitration process, the arbiter will consider the proposals from each side and decide on the final distribution of assets and liabilities.
Retirement and Divorce Laws
The largest amount of assets accumulated during a marriage usually consists of retirement assets. If you are planning to get a divorce in New Jersey and have retirement assets at stake, get the assistance you need to ensure you receive the fair amount of marital assets you deserve. The New Jersey divorce law experts at the Law Offices of James C. DeZao are experts in dealing with divorce and pension plans. We can answer all your questions and assist you through the entire process. Call us today for a free consultation at (973) 358-6134.