Can You Mediate or Collaborate with a Spouse Who Engages in Illegal or Bad Behavior?

Mediators generally tell you that you can only mediate with someone who can make and keep promises. Collaborative professionals require you to sign a participation agreement where the parties and the professionals agree that they will resolve matters without judicial decision-making or the collaborative process will end. In short engaging in both processes requires trust between the parties and a trusting relationship with the professionals. Can you trust the spouse who cheats on his/her tax returns or has hidden assets or has an addiction problem to mediate or collaborate?

It bears careful consideration. While everyone has good reason to doubt the character of people who engage in such behavior, their behaviors once uncovered are the reason they cannot go to court to participate in judicial decision-making.

Consider the long-time tax cheat. These generally appear in my practice as the business owner who under-reports income and inflates deductions or created a bogus business that allows them to claim large ( often non-existent) deductions against earned income. They may have been getting away with this for years. Their spouse has filed a joint return with them during the marriage. Of necessity, the lawyers will probably have to address this behavior in dividing the property and in determining child support and spousal support.The chances that someone at the courthouse will hear about the bad behavior or read about it in court documents is high, as is the possibility that someone will report it to the IRS which pays a 15% finders fee. In reality, you cannot try such a case because your client is liable for the taxes, interest and penalty. Your client may be able to claim innocent spouse. However, that will be expensive. The outcome is uncertain. Having one spouse exonerated will not address the problems generated by having the other spouse charged with tax fraud, having the marital assets seized and the spouse jailed. If the family depends primarily on the cheating spouse for support, the entire family can be financially ruined.

For people who are drug addicted or chemically dependent or have hidden funds, the risk of having their behavior become known to the authorities or to their employer or other people who matter can also be a powerful inducement to have the case settled privately outside the court.

In general, I would not trust a person who engages in preparing and filing false tax returns or have addiction problems or has hidden assets. However, when his or her self-interest in reaching a settlement through mediation or collaborative practice provides powerful inducement, it may be possible. It may also be necessary for the attorney or other professionals who represent the party who has engaged in the illegal or bad behavior to have the assistance of a neutral mediator to support the message that on-going illegal or bad behavior is self destructive and cannot be tolerated by the spouse any longer. Also, that the court system will not support such behavior going forward. With the assistance of a financial professional, the offending spouse who files fraudulent tax returns may learn new and better ways to deal with his or her finances. Mental health intervention may be acceptable to the addicted spouse. Professional financial assistance may be available for the spouse who has hidden the assets or the spouse who needs to rebuild the family assets. Help for the family who has lived in fear of the ramifications of these behaviors for years can also be built into the mediation or the collaborative process.

With careful and thoughtful professional assistance for the clients, such cases can mediate or be resolved in collaborative practice, with much better outcomes than are available in the courts.