A Family Mediation: Spousal Support and Pension Issues
Challenge
A couple who have been divorced for 21 years disagree about the continuation of spousal support payments after the ex-husband retires. As their divorce agreement never specified an end date for payments, problems arose when decisions were made without consulting experts.
Though both parties retained their own legal counsel, neither wished to proceed to court. Instead, the parties agreed to contract JRB Mediations to help them resolve their dispute/issues.
Background
Sally and Harry (names have been changed), both in their late sixties, had ended their 26-year marriage in 1998 and have been divorced for 21 years. They have two children, neither of whom are dependent adults. Due to her disabilities, Sally was unable to secure employment after their separation, and had been receiving spousal support from Harry since their divorce.
Unfortunately, their divorce agreement did not specify an end date or review criteria for the spousal support payments. After 21 years, Harry became concerned about the indefinite spousal support and its impact on his retirement.
Upon retiring, Harry decided to stop paying spousal support and paid only the pension partner amount to Sally. His decisions were made without any court order or agreement between Sally and himself. Non-payment of spousal support went on for 4 years and resulted in Sally being owed $80,000 in spousal support arrears.
The Goal
Both parties’ expectation of mediation was for a reasonable and fair outcome of spousal support and pension payments, agreeable to both.
The Process
Pre-Mediation Interviews
JRB Mediations conducted individual meetings with each party separately prior to the mediation. These pre-mediation meetings were crucial in preparing Sally and Harry for the upcoming mediation process.
During these pre-mediation interviews:
JRB Mediations’ process was explained,
the parties communicated the situation from their perspective,
issues to be discussed were identified as well as ways to resolve them, and
it was determined that mediation was suitable for the situation.
Also during these pre-mediation meetings, the parties were instructed as to the information they needed to collect and bring to the mediation and share with the other party. This included:
a detailed copy of their monthly budget showing their regular expenses and spending habits.
a detailed list of their sources of income, substantiated by supporting documentation.
any other relevant information needed to effectively present their respective viewpoints during the mediation process.
Duration of the Interviews:
Each pre-mediation interview lasted about 1.5 hours per party and helped the parties understand the importance of open communication and transparency in reaching a resolution.
Positions of the parties
Position of Harry:
It is woefully unfair and financially impossible to continue to pay both spousal support and pension to Sally.
He should pay less or no spousal support.
He is already paying Sally’s pension partner share of his employment pension.
To continue to pay both spousal support and pension payments equates to paying more than twice what he had been paying since their divorce.
He would be paying more from his pension than spousal and pension payments combined.
Position of Sally:
She is entitled to half of the employment pension.
She should continue to receive at least half of the spousal support payments.
Digging Deeper: What Are the Main Issues?
Issues raised by the Parties:
Spousal support values.
Spousal support can be varied or continue as is.
Spousal support arrears.
Pension commencement date.
Pension beneficiaries.
Payment methods and costs.
Common Interests of the Parties:
Affordability and fairness.
Lifestyle and self-care (haircuts, clothes, entertainment, etc.).
Financial security.
Details of the Mediation
Preparation for Mediation:
JRB Mediations researched and reviewed relevant sections of the Matrimonial Property Act, Employment Pension Act and Regulations, and Family Law Act, as well as the parties’ divorce minutes, notes from pre-mediation sessions, legal counsel briefings, and other documentation.
JRB Mediations prepared a mediation strategy, agenda, and questions.
Mediation Details:
The mediation style used was interest-based.
In attendance were Harry, Sally and their respective legal counsel.
Budgets and income summaries were used to understand the incomes and expenses of each party to help them reach a resolution through negotiation.
JRB Mediations made use of the attending counsels' legal expertise when necessary. This approach helped to ensure that the mediation process was thorough and addressed both parties' needs. Attendance of the parties’ legal counsel provided each of them with an extra layer of support and personal guidance throughout the process as needed.
Mediation concluded within five hours.
Challenges During Mediation:
Sally’s and Harry’s hearing deficits created a listening challenge for all in attendance including the parties themselves. Everyone needed to speak much louder and be reminded to do so.
Sally’s lack of education required the mediator to ensure she understood what was being said by Harry and that the process was fair and equitable.
The parties needed to be reminded as to why they were at mediation in order to keep the process moving forward towards resolution and agreement.
The mediator had to remind the parties of the communication guidelines they had agreed to and to be respectful in their discussions and negotiations.
The Successful Resolutions
Had the parties decided to go to court, the outcome of their dispute would have been determined by a judge.
In addition to the high costs of going to court, and its adversarial nature, the amount of spousal support the judge could have ordered Harry pay to Sally (arrears owing and amount going forward) could have been anywhere from 0% to 100% or $0.00 to $80,000. Additionally, court costs could have been awarded to the “losing” party.
Instead of going to court, the parties decided to hire JRB Mediations and determine their own outcomes. During mediation, the parties agreed to the following resolutions:
Harry would continue to pay the current rate of the pension partner share ($1700) to Sally.
Spousal support payments to Sally would decrease from $1500 to $450.
Pension partner share would be called spousal support instead with a single monthly payment of $2150 ($1700 + $450) paid by Harry to Sally in the form of Direct Deposit and deposited on the first day of each month beginning the month following the mediation.
The beneficiaries for the pension would be split equally into thirds (Sally, and Child 1, and Child 2). Should Harry become deceased before Sally, the spousal support would revert back to the pension partner amount of $1700.
Both parties agreed to have amicable communications with each other moving forward.
To help Sally decrease some of her higher expenses, Harry agreed to meet with Sally in the next month to obtain car insurance quotes. This was to help Sally obtain equivalent insurance to what she has currently, but at a much cheaper rate than what is currently paid.
As both parties’ legal counsel were in attendance, drafting of the mediated settlement agreement fell to their respective lawyers.