Even in amicable divorces, property division negotiations can stall over certain assets with high monetary or sentimental value. Couples who are not able to reach a compromise through settlement negotiations or mediation sometimes search for a method of resolution that avoids the cost and uncertainty of litigation. If the parties are willing, there are a few nontraditional ways to finalize terms while maintaining fairness.
One property division concept borrowed from business is sealed bidding. This might be useful when both parties want to maintain ownership of the family home. Under this process, each spouse privately submits a written bid for the item or items at stake without telling the other what figure they’ve given. The envelopes are opened simultaneously, and the spouse who has provided the higher bid receives the assets and pays their soon-to-be ex half of the value they assigned to the property.
For example, if a husband values the marital residence at $1 million and the wife submits a $900,000 bid, he would receive the home. However, he would have to give her $500,000 through a direct payment for her ownership stake, a larger share of the remaining marital estate, or a combination of the two. Sealed bids reveal true valuations, avoid reactive negotiation and limit posturing. Should you choose this method, you might want to set clear terms about deadlines and proof that each party has the ability to make any required payments.
A different of method of resolving asset division disputes can be traced to situations where two people are deciding how to split the last piece of cake. One party is given the responsibility for dividing the martial assets into bundles of equal value. Then, the other divorcing spouse has the choice of which bundle to take.
Using an arbitrator can also be a cost-efficient means of allocating marital property. You can employ a standard approach, where the arbitrator hears from both sides and then renders a decision based on they think is fair. Another option is “baseball arbitration,” during which each side presents a proposed result and the arbitrator chooses one plan or the other.
Bryan L. Salamone & Associates, P.C. is the Long Island divorce leader, protecting clients’ interests in marriage dissolution proceedings involving substantial and complex assets. Please call 631-388-6009 or contact us online to schedule a consultation.