Although a mediator should never provide “legal counsel or advice” to either party, a good divorce mediator may need to provide the parties with basic legal information or specific legal rules that are applicable to the disputed issues in their case. Sometimes when parties have an early proposal for resolving a particular issue in their case, they will quickly abandon their original proposal when they are presented with the “vanilla version” of the law by their mediator. If they discover that their proposed division of a particular asset or asset group is not supported by the law, they may immediately want to resolve the issue in a more equitable manner.
For example, when the parties learn that retirement assets earned during the marriage are community property, the husband and wife who have previously agreed that each party should keep his or her entire retirement assets earned during the marriage may reconsider their proposed division when they realize that the proposed division is inconsistent with the law and will result in an unequal division of the marital property. If the value of the wife’s retirement assets greatly exceeds the value of her husband’s retirement assets, the wife may become upset with the mediator for providing this legal information, but despite the fact the legal information favors one party over the other, this information must be made available to the parties if they are going to negotiate fairly and wisely regarding the division of the retirement assets earned during the marriage. If the couple proceeds with the proposed marital property division without being apprised of the law regarding retirement assets, the party who suffers the loss of his or her full community interest in the retirement assets will not be satisfied with the mediation process and worse, may suffer unnecessary financial hardship.
The parties can always proceed with their original agreement once they know the legal rules, but it is important that they be informed of the rights that they may be giving up before they proceed with the unequal division. The mediator should also consider referring the parties to a consulting attorney and a retirement valuation expert if there are additional legal and/or financial issues that affect the application of the general 50% rule. When there may be loans taken against a 401k, when the retirement asset has been accumulated both before the marriage as well as after the marriage, or if there are undervalued traditional pensions of significant value, the “vanilla version” of the law will not be sufficient for the parties to make an informed decision regarding the proposed division of their retirement benefits.
After learning about the characterization and value of their retirement assets the parties are free to agree to a more equitable division and not proceed with their earlier proposal, or they may agree to confirm their initial proposal. What matters is not whether they apply the legal rule in their case, but that they are aware of the laws that pertain to their decision and know the value of the assets before they make a final decision regarding this important part of their settlement.
Unfortunately, sometimes when a mediator provides the “vanilla version” of the law, it is hard to maintain the mediator’s appearance of neutrality when the law happens to favor one party’s position over the other party’s position. There is a tendency by many mediators to be too conservative and cautious regarding the communication of legal information to the parties. They fear that they may be crossing the line between giving “legal advice” and providing the parties with permissible “legal information.” There are several ways to provide legal information to assure that the mediator does not cross the line and venture into legal advice. One way is to provide handouts to both parties that summarize some basic legal rules at the commencement of the mediation, or during the mediation to simply provide both parties with the text of a particular statute or quote the definitive legal rule that applies to their issue. The more conservative mediator may simply refer the couple to a consulting attorney at the beginning of the case so that they avoid even the possibility of being deemed to have provided impermissible legal advice to the parties.
Despite the potential downside, legal information is an essential and valuable tool for mediators to provide the parties so that there will be integrity and transparency in the parties’ decision-making.