As a Chartered Business Valuator Joe Hilton of BDO is often asked to determine the value of a business due to a separation/divorce. In addition, he may be asked to determine the business owner’s income for spousal and child support purposes. This call often comes as the parties work their way through the normal court process. Joe Hilton says “while settlement can sometimes be reached quickly, settling matters through the court system is often very costly, can take a long time due to court backlogs, and can be risky for either side. Alternatives include mediation, arbitration and collaborative practice”.
This article below is Joe Hilton’s straight-forward explanation of how to optimise some of those processes for your family’s unique circumstances.
In mediation the parties pay a mediator to help facilitate their own decision making. While the parties must pay for a mediator, they are more in control of the outcome and resolution can be reached sooner which in the end, can be more cost effective.
Arbitration is similar to mediation, but the parties are bound by the decision of the arbitrator. This gives the parties less control over the outcome, but can bring resolution sooner than mediation or where mediation has been unsuccessful.
The collaborative approach uses a combination of lawyers and specialists to help you with your negotiations. Each party is represented by a lawyer. In addition, a neutral financial specialist (such as myself) working for both parties may also be retained to assist with business valuation, income determination, quantifying tax issues, determining net family property, evaluating the feasibility of settlement options, etc. A neutral family coach may be also be retained to assist with family and emotional issues. Each person involved (both spouses, the lawyers and the neutrals) sign a participation agreement at the outset. The spirit of this approach is to reach a settlement through respectful negotiation with a commitment to stay out of court. The collaborative approach focuses on the parties’ core issues with a goal of reaching a mutual, lasting and satisfying resolution. As with mediation the parties have more control over the outcome. Costs can also be reduced as only one financial specialist is retained, rather than each party retaining their own financial specialist. Matters can also be settled on a timely basis as it does not rely on the court system or schedule which can also help to reduce costs.
When it comes to separation/divorce, there is no “one size fits all”. Partners considering a separation would be wise to learn about all of the options available to them and choose a method of resolution that provides the best fit for their own individual circumstances.
If you are going through or are contemplating a separation/divorce which may include difficult financial issues, be empowered to contact neutral experts directly first to see how we can help you and your family.
Joe Hilton, BDO, Barrie, Ontario