property

Cutting The Cake

Many times in mediation, fundamentally, what is going on is the fair division of co-owned assets. Whether it is a divorce, probate or partnership dissolution, what it comes down to is, “who gets what and how much of it do they get?”

I am reminded of the classic childhood scenario with which so many mothers and fathers are familiar. When two kids have to share a piece of cake, you let one child do the cutting, and the other child then gets to choose which slice she wants. By this simple device you Impose fairness on the one doing the division that almost always results in a square deal.

It is amazing how the classic solutions hold up. Very often this is almost the exact same process as found in mediation. With only a few variations.

Often in mediation a particular asset can’t really be divided, so instead one party has to buy out the interest of the other party. Or the asset has to go on the market for sale.

When neither party wishes to have actual possession of the asset, the solution is simple, put the property up on ebay, or Craig’s List, or find a broker and divide the proceeds after cost of sale. Of course there can be disagreement as to who will serve as broker, but in our experience here at Liaise, that hurdle is easily overcome.

The challenging circumstance is when there is “sentimental” or other non-monetary value associated with a piece of property and that property cannot realistically be divided or shared. Then instead of the kids doing division by knife, a different form of imposing fairness on the participants is called for.

There are some simple methods for imposing fairness into this division as well. One method is to have each party write down the best number that they are willing to take for their interest in the property. But, they are also told that whatever number they write down, they must also be ready willing and able to pay to the other side for their ownership interest in that property.

It is amazing what happens when someone is forced to come up with a number that is at once what they will sell for, and what they will pay to buy. A great leveling out occurs and parties that thought they were tens of thousands of dollars apart find that they are really only separated by a few hundreds of dollars. At that point it seems that a resolution is never far away.

To carry the “cutting the cake” analogy a bit further, in mediation parties can often “get beneath” their stated positions and a piece of cake can be cut to represent the value that one side may attach to various parts of the cake. For instance, let’s say that this particular piece of cake has an icing rose in one corner. It may turn out that one party really loves a little rose made of icing and the other party doesn’t fancy them that much. In such an event, it may turn out that this particular piece of cake is divided so that one side gets just the cake under the icing rose and a much larger piece of cake goes to the other side.

A practical example of this analogy recently occurred in a Liaise divorce mediation where a brother and sister were left undeveloped land by their father. The property was about 50 acres with an apple orchard on about 5 acres. One beneficiary really valued the apple orchard, the other, not so much. Through mediation this fact came out and the property was divided so that the sibling who wanted the orchard got that part of the property, but the other sibling received more land.

There are many pathways to resolution, the key to finding them is engaging in free and open communication so that all possibilities are revealed.

Categories