Friday, September 30, 2016

3 Tips for a Peaceful Divorce

I was recently invited to collaborate on an expert panel and share some insights on how to prepare for divorce and keep it peaceful. Here is what I added:

The experience of a peaceful divorce does not happen by chance or by accident. It is a choice that you make and the good news, even in divorce, is that you have a choice.

Here are a few tips to help you choose peace over war when getting divorced:

1. Choose a process, don't let the process choose you.

While many people think litigation is the only option in divorce, there are many process options that can be tailored to your family's needs. Mediation, collaborative law, and outside-of-court attorney negotiation are all more flexible options than court.

Learn about all the options before you choose one.

2. Preferences before positions.

It is a common mistake to jump to conclusions about what you want before you have all the information. Instead of saying "I want the house" or "I think this much support is the right amount," consider all the options before you make a decision.

Many times your favorite option on day 1 is not the best option when all the information is gathered.

3. Use a "timeout."

Language can be hurtful, demeaning, and misunderstood or it can be uplifting, freeing and create peace. It's very easy to react when faced with the fears that are natural when splitting time with children or dividing finances.

Don't be afraid to pause, call a "timeout" and gather your thoughts before responding.

You can read the full article and the tips from other experts here: How to Prepare for Divorce

Thursday, September 29, 2016

Trusting the Trust: the Pfannenstiehl Redux

Guest Post from Beth Aarons*

Massachusetts estate planners enjoyed a collective sigh of relief as the Supreme Judicial Court (SJC) agreed to further appellate review of the Pfannenstiehl’s plight to determine whether the husband’s interest in his family’s trust should be divisible as a marital asset during divorce.  The SJC issued an opinion that such a trust should not be divided as part of the marital property.  [SJC-12031]

When the Pfannenstiehls appeared in case law three years ago, the MA Appeals Court had upheld the Probate and Family Court’s determination that the husband’s one-eleventh fractional beneficial interest in his family’s trust balance (there were 11 living beneficiaries at the time) was a marital asset, with 60% of his one-eleventh share to be paid to the wife as part of the property division in their divorce.  The class of trust beneficiaries was open to include any future descendants of the donor, but the lower court used the existing number of beneficiaries to calculate the value as the husband’s present interest.

The estate planning community was roiling in confusion, since the Pfannenstiehl family trust had elements that estate planners regularly rely upon for the protection of their clients’ assets: completely discretionary distributions, a spendthrift clause, and co-trustees, including one disinterested trustee.  Estate planners were scratching their heads and regrouping at the drawing board.  Wasn’t the point of establishing this type of trust to prevent exactly the scenario that occurred?  Shouldn’t the trust protect the family’s assets from creditors and transfers outside of the family blood line during a beneficiary’s divorce?  If not, what’s the point of creating a trust at all?  The bullet-proof language had suddenly been pierced and in that moment all similar trusts were potentially at risk.

So imagine the relief brought by the SJC’s opinion, restoring established expectations to the world of trust provisions.  It should be noted that the specific facts in Pfannenstiehl relating to the trust distributions and the particular terms of the trust factored into the SJC’s decision.  The conclusion is not that trusts are globally excluded from consideration as marital property during a divorce, but that with the right facts and circumstances, they still can be.

*Beth Aarons is a Mediator and Collaborative Law attorney who runs her own practice in Newton and is of counsel to Skylark Law & Mediation, P.C. Beth's practice includes family law mediation, collaborative divorce representation, and estate planning, trusts and probate practice. Click here to learn more about Beth or here to schedule an appointment with Beth.

Thursday, September 1, 2016

Does Settlement Counsel Help or Hurt Clients?

Guest post from Rackham Karlsson.*

A man goes to the doctor with chest pain. The doctor finds a small growth next to his heart. The growth can be removed, but it’s a very delicate operation due to the location. The doctor offers the man the choice of two surgeons:

  • Surgeon A is highly specialized. She has extensive experience with this type of surgery and has a tremendous success rate. “However,” the surgeon says, “Because I’ve chosen to focus my work on this type of surgery, there is a chance that we would want to bring in another surgeon if something goes wrong during the procedure. I don’t expect it, but it could happen.”
  • Surgeon B is a generalist, a Swiss Army knife of surgeons. He has some experience with this type of surgery, but it’s not the focus of his practice. “I can handle any situation that comes up during the surgery,” he boasts. “I wouldn’t want you to limit your options and have to change surgeons in the middle of the procedure.”

Which surgeon would you choose?

Surgeon A, right? It’s a no-brainer.

If that's true, then why do so many family lawyers dislike the concept of settlement counsel — an attorney who focuses exclusively on negotiations and bows out of the case if litigation is necessary? Doesn't the same logic apply?

Let’s give surgeon B the benefit of a doubt. He cares about his patients. He wants them to be healthy, and he truly believes that by personally offering the full range of surgical procedures, he is fulfilling his Hippocratic oath. The equivalent in law is the duty of zealous advocacy. Lawyers often believe that they can’t advocate zealously for their clients if they restrict the scope of their representation to settlement counsel and exclude themselves from litigating.

There are two problems with this view of “zealous advocacy:"

First, a lawyer who anticipates litigation is necessarily compelled to view the case in adversarial terms, always thinking about gathering facts and building a theory of the case that paints one party as the inevitable ‘winner’ and the other as the inevitable ‘loser.’

The theory of the case is a powerful, but extremely blunt, tool in the litigator’s arsenal: “Settle on my terms or I’ll have a judge do it.” This approach is simply incompatible with what it takes to reach meaningful settlement: building bridges, finding shared interests, and forming consensus. Do we really expect a lawyer to probe a party’s most private thoughts in a deposition one day, and then engage in principled negotiations with that same party the next day? Never mind whether the attorney thinks it can be done — how can we expect the party to ever trust that attorney in negotiations?

It’s no wonder that so many cases settle on the eve of trial: settlement becomes a last resort, rather than a mutual accomplishment.

Second, viewing a case through the lens of litigation encourages lawyers and their clients to focus on measurable outcomes — asset division, support amounts, hours spent with their children, etc. — because those are the outcomes a judge can determine.

But in many cases, particularly family law cases, there are complex interests involved that really aren’t measurable in that sense. Honoring what remains of a deep friendship. Forming a healthy co-parenting relationship. Being able to tell their children that it was a dignified process. Avoiding the embarrassment of an adversarial hearing. These are almost always shared goals of divorcing spouses, and yet those shared goals are consistently undermined by a litigation mindset. We all know what happens to parents who spend months (or years) working with their lawyers to paint each other in the worst possible light…

What does Settlement Counsel do?

Now, let’s consider what settlement counsel can accomplish, by explicitly and transparently announcing that he or she won’t litigate the case:

  • Settlement counsel can focus on principled negotiations without being pulled in the opposite direction of building an adversarial case against the other party.
  • Settlement counsel can get to know the other party in a setting that’s non-threatening and fosters trust, allowing both parties to explore their respective interests and work toward shared understandings — opening up options for creative, mutually agreeable solutions.
  • Settlement counsel can explore the clients’ intangible interests, being a “zealous advocate” for those interests and not just the ones that are within a judge’s limited authority.
  • Settlement counsel can assure the client that disagreements will be negotiated by the most respectful means possible, and the case will be transferred to a litigator only if absolutely necessary. (There could even be an understanding that a particular litigator has been identified if the need arises.)  
Can adding Settlement Counsel actually subtract cost?

Finally, let’s consider the financial benefits to the client of using settlement counsel. Litigation isn’t just expensive — it’s EXPENSIVE, all caps. And for what? The vast majority of cases settle short of trial. Do we really need to put the clients through the wringer, just so they can ultimately settle — often in a desperate attempt to stem the financial hemorrhaging caused by litigation?

There are times when litigation makes sense. A party might refuse to negotiate, or the dynamic between the parties might prevent meaningful negotiation. In some cases, it might even be necessary to use the high cost of litigation as a blunt stick to encourage settlement. But too often, the people who benefit most from litigation are the attorneys. Whatever their best intentions might be, we can’t ignore that financial incentive. Clients are certainly aware it; they know that we are keepers of the legal process, and yet we benefit the most when that process is least efficient.

Going back to the surgeons, suppose you had initially chosen surgeon B. Would it change your mind to know that surgeon B gets paid by the hour, so the more complicated the surgery, the more he gets paid? It’s not to say that the surgeon intends to hurt the patient, but what is the surgeon’s incentive to focus on the skills needed to avoid complications more consistently? The disincentive might be entirely subconscious, but it can’t be ignored.

For some lawyers, the choice is very conscious: they don’t want to give up litigation because they need the income. But there is no shortage of cases out there, and lawyers can make a very good living without litigating. In fact, we can often attract more business by modeling ourselves after surgeon B and offering highly focused services that are appealing to clients. Some of us are living proof of that, having sworn off litigation completely and focusing our efforts on being the most effective mediators, collaborative attorneys, and settlement attorneys we can be. It’s not only financially feasible, but it’s what most clients actually want!

Consider, in parting, these words of Abraham Lincoln:

"Discourage litigation. Persuade your neighbors to compromise whenever you can. 
As a peacemaker the lawyer has superior opportunity of being a good man. 
There will still be business enough."

That is exactly what settlement counsel does.

*Rackham Karlsson is a family law mediator and collaborative attorney based in Cambridge, Massachusetts. His blog and podcast series, The ADR Initiative, focuses on building profitable alternative dispute resolution businesses.

Related Posts Plugin for WordPress, Blogger...