Sunday, November 27, 2016

Can Child Support be Modified Retroactively? The Appeals Court Answers in Rosen v. Rosen

The Massachusetts statute on the enforcement of child support judgments is very clear that child support judgments are not "subject to retroactive modification except with respect to any period during which there is pending a complaint for modification." M.G.L. c. 119A §13(a).  A recent Massachusetts Appeals Court decision recognized some exceptions to this rule "in certain very limited circumstances." Rosen v. Rosen (2016)

The Rosen case involved a couple who were married fourteen years and divorced by agreement in 2003.  The mother had primary physical custody of three children and the father paid monthly child support of $4,500.  Upon the oldest child moving in with the father, he unilaterally reduced his support by 1/3 without court approval.  The parties later reached an agreement (2009) memorializing a change in support to $3,400.  The agreement was filed but not approved by the court due to procedural issues.

In 2011, a second child moved in with father and he filed a Complaint for Modification seeking to reduce his support and force the mother to contribute to college education expenses.  The mother filed a Complaint for Contempt seeking retroactive repayment of the child support that was underpaid on the original separation agreement.

The trial judge acknowledged that she could not retroactively enforce the 2009 agreement, but she did give an equitable credit to the father for the fact that the older son had been living with him for a period of time.  The mother challenged the equitable credit among other decisions of the trial judge.  The Appeals Court reviewed in depth the standards used in other jurisdictions for creating exceptions to the limitation on retroactive changes, but decided to create their own very specific exception.  In order to avoid confusion or abuse of any exception created, the Appeals Court in Rosen "favor[ed] a clearly delineated standard that relies on objectively verifiable facts in order to allow an equitable credit."

The Appeals Court set out the following requirements for an equitable credit to be received against a child support arrearage:

The payor must demonstrate the following to receive an equitable credit:

  1. the support recipient agreed (a) to transfer custody of the child to the payor for an extended period of time not contemplated in the original custody order,  and (b) to accept the payor's direct support of the child as an alternative method of satisfying the payor's child support obligation; 
  2. the custody transfer was not the result of duress, coercion, or undue influence exerted by the payor against either the recipient or the child; 
  3. the payor provided the child with adequate support and maintenance while the child was principally domiciled in the payor's home; 
  4. the recipient was relieved of supporting the child during the period in question; 
  5. the alternative support arrangement was not contrary to the child's best interests; and 
  6. granting a credit to the payor for his or her direct support of the child would not result in injustice or undue hardship to the recipient. - Rosen v. Rosen (2016)
Applying these narrow principles in the Rosen case, the Appeals Court concluded that the trial judge was justified in finding that this case presented "compelling circumstances of an equitable nature" and affirmed the trial judge's award of an equitable credit to the father.  The court also dealt with the standard for a finding of Contempt, corrected calculation errors as to the arrearage amount, and affirmed a college education contribution award against the mother.  

There are two takeaways from the Rosen case on the primary discussion regarding retroactive credits:
  1. There is now a very clear test for determining whether a retroactive change in child support prior to the service of a Modification Complaint is appropriate, and it is a very narrow test.  In other words, child support is almost never retroactively modifiable prior to the date of service of the Complaint of Modification.
  2. If two parents reach an agreement for modifying support, even in writing, it has to be approved by the court or it will not be enforceable.  

Wednesday, November 23, 2016

Post-Divorce Lessons from the Massachusetts Appeals Court: Fehrm-Cappucino v. Cappucino

Even after a divorce the conflict between couples sometimes continues due to an ongoing support order or co-parenting relationship.  If spouses don't settle on an agreed upon process for addressing future changes, these disagreements can often lead to additional court cases.

In the case of Fehrm-Cappucino v. Cappucino, a 2016 Massachusetts Appeals Court case, the parties took a modification and contempt action to trial and appeal, resulting in a remand of both cases back to the trial court for new findings.  In Fehrm-Cappucino, the father sought a reduction in his child support in a modification, and the mother sought a finding of contempt against the father for non-payment of a lump sum owed under their agreement.

Here is what we can learn from the Fehrm-Cappucino decision:

1.  Rental Income Is Includible for Child Support Calculations

The trial Judge excluded rental income each parent had from properties they had an interest in.  The trial Judge excluded the father's rental income because the underlying property was divided in the divorce.  However, the Appeals Court didn't agree that the division of the asset in divorce resulted in a waiver of the income's inclusion in the child support calculation.  This is not a double-dip because income from the asset and the underlying principal value are different, and there is no exclusion in the child support income list for assets divided during the marriage (as there is in the alimony statute).  This issue was therefore remanded to the trial court.

2.  Contribution from the Mother's Boyfriend to Rent Is Not Includible for Child Support Calculations

The mother appealed the trial Judge's decision to attribute income to her based on contributions from her cohabiting boyfriend.  The appeals court indicated that the findings were insufficient because the trial judge should have made additional findings as defined in Murray v. Super, 87 Mass. App. Ct. at 155:
"[a]dditional findings that would aid our analysis, includ[ing], but . . . not limited to, . . . the lack of an obligation of the mother's [boy friend] to support the children, the manner in which the mother's and the children's lifestyles are altered by these funds, the discretion that the mother's [boy friend] maintains in payment of these funds, and the manner in which the mother would support her household absent these funds." Murray v. Super, 87 Mass. App. Ct. at 155.
This issue was therefore remanded to the trial court.

3. Attribution of Income to the Mother was Not Sufficiently Supported

The mother also appealed the trial Judge's decision to attribute income to her based on her own earning capacity.  According to the child support guidelines:
"[t]he Court shall consider all relevant factors including without limitation the education, training, health, past employment history of the party, and the availability of employment at the attributed income level. The Court shall also consider the age, number, needs and care of the children covered by this order. If the Court makes a determination that either party is earning less than he or she could through reasonable effort, the Court should consider potential earning capacity rather than actual earnings in making its order."
The trial judge found that the mother was capable of working thirty hours per week at her previous hourly rate of $25.  However, the trial Judge did not make specific findings as to the availability of employment at the attributed level and the Appeals Court therefore remanded this issue as well.

4. It's Difficult to Prove a Negative

The trial Judge also concluded that the father was not in contempt for failing to pay a $10,000 lump sum.  The Judge found there was a lack of direct evidence.  While the Appeals Court did indicate that the trial Judge is not required to accept the wife's testimony that the payment wasn't made, they noted that the trial Judge failed to list a rationale for ignoring her testimony without any opposing evidence or a finding of credibility.  Therefore the contempt adjudication was also remanded for further rationale or a different disposition.

All of these Appeals Court rulings are helpful in approaching other post-divorce matters that might arise but it is an expensive lesson for these parties.  It is noteworthy that these parties spent a considerable amount of time fighting these post-divorce cases only to be returned to trial by the Appeals Court.  This is another example of a case where early intervention dispute resolution through mediation or other forms of conflict resolution could have resulted in a faster and more efficient result.

Friday, November 18, 2016

Who Needs to Know? - 5 Best Practices to Protect Privacy in Divorce

Divorcing spouses that choose outside-of-court dispute resolution, like mediation or collaborative law, often list privacy as one of their primary reasons for choosing to avoid court.  This may seem obvious when thinking about the publicity around celebrity divorces but anyone having their dirty laundry aired publicly can be damaged both emotionally and financially.  Below are some precautions that practitioners and clients can take to protect private information in divorces, even if they're not a celebrity.

1.  Protect Personal Identifying Data: 

The court process in many states is public (in Massachusetts this includes hearings, most court documents, and trials), however there are some limitations on what information is public.  Certain documents, such as the Financial Statements, are typically impounded, meaning the public does not have access to those documents and they are only available to court personnel, parties and their counsel.  In addition, most courts encourage parties to limit what information they share.  

In Massachusetts, the SJC has provided "Interim Guidelines designed to protect against identity theft by having court filers omit or delete certain personal identifying information, such as social security numbers. These Guidelines for the Protection of Personal Identifying Data (PID) in Publicly Accessible Court Documents are non-binding and took effect on September 1, 2009."

These Interim Guidelines encourage the redaction or omission of the parties' social security numbers, driver's license numbers, tax id numbers, passport numbers, and mother's maiden names.  There are exceptions listed, but clearly the best practice is to err on the side of not including this information, even on impounded documents, unless required.

In a Massachusetts practice, this means that we strongly advise clients to only use last four digits of their social security and account numbers where that information is required (such as on financial statements), and not to use their full information.  For professionals any such disclosure of client's information that isn't required could be considered a violation of M.G.L. 93H.  This includes redacting that information from any document that might be included as an exhibit (such as a tax return or account statement).

2. Don't Air the Dirty Laundry:

One of the problems with trying to settle a divorce case through the court process is that an adversarial process encourages people to take extreme positions.  When presenting to a court this is usually a client's last chance to get their best possible result, which requires that they make their "best case" and the other side's "worst case."  In divorce, this best case/worst case information can be very personal.  

While presenting to a court is sometimes necessary that doesn't mean that all the dirty laundry needs to be put into public documents.  Parties and counsel should be thoughtful about what they put in writing and how they write it.  This is primarily an exercise in common sense, which unfortunately may be a difficult request when client's are emotional and scared.  One question that can be used to help client's draw that line appropriately is to ask "Would you be comfortable with your child reading this statement?"

Would you be comfortable with your child reading this statement?

If your answer to that question is no, but a truly damaging piece of information is necessary for an argument in court, there is a process for requesting impoundment of sensitive information:

3. Ask for Particularly Private Information to be Impounded:

While some documents are impounded, most court documents are not:  
“[I]mpoundment is always the exception to the rule, and the power to deny public access to judicial records is to be 'strictly construed in favor of the general principle of publicity.'” Republican Co. v. Appeals Court, 442 Mass. 218, 223 (2004), quoting Commonwealth v. Blondin, 324 Mass. 564, 571 (1949)." - Handbook on Trial Court Rule VIII, The Uniform Rules on Impoundment Procedure
Protecting public individuals from private or hidden government action is an important principle of a democratic republic.  So in states like Massachusetts, impoundment is the exception, not the rule, and is only available in limited circumstances. It is therefore difficult to impound certain information.  However, there are many circumstances where courts in Massachusetts will agree it is appropriate.  There are very careful precautions that one should take when requesting impoundment.  For example:  
  • when filing a Motion to Impound you should probably also ask that the Motion to Impound be impounded as it may also include sensitive information; 
  • always file the Motion to Impound before filing the sensitive information; and 
  • make sure to include only the necessary information to argue impoundment in the Motion to Impound. 
In Massachusetts the court has specific rules and procedures for this type of request contained in the Handbook on Trial Court Rule VIII, The Uniform Rules on Impoundment Procedure.  This is a complicated process and we recommend consulting with counsel when making this type of request.

4.  Protect Sensitive Financial Agreements by Including in Impounded Documents:

In Massachusetts, the Financial Statements in a divorce are impounded automatically (without having to present a Motion to Impound as described above), but the Divorce Agreement is public.  It is typical, therefore, to reference accounts as listed in the Financial Statement and not disclose unnecessary information about accounts in the Divorce Agreement.  Incorporating the information via reference to the Financial Statement makes that document part of the settlement so it is very important that both parties carefully prepare their Financial Statements to be true, accurate and complete.

In addition, it is possible to use this technique more creatively to protect certain information.  For example, if the parties are agreeing pursuant to their Divorce Agreement to sell their house, they likely want to include some parameters around that sale in the Agreement.  They may want to list details about the agreed upon sale price and a mechanism for reaching agreements to evaluate a lower offer.  Putting that information in the public document, however, could be to their detriment.  If a potential buyer reviewed that public Agreement they might use that information to their advantage in negotiating a sale price for the house.  That risk can be avoided by including that same information as an addendum to both parties' Financial Statements and only referencing that addendum in the public document.

5.  Choose a Private Process from the Beginning:

As we indicated at the beginning of this article, privacy is a major concern for many families and one of the primary reasons that a family may choose to avoid court.  There are options for resolving conflict which do not require airing the dirty laundry in court, and which allow for thoughtful planning about what information should be kept private.  Mediation and Collaborative Law are both out-of-court resolution options which assist parties in reaching agreements in an office setting instead of a public courthouse.

Mediation and Collaborative Law have many other advantages as well which we encourage you to read more about on our website.  For the purposes of this article and focusing on privacy there are two ways that mediation and collaborative law protect a client's privacy:

First, mediation and collaborative law are both confidential processes in which the parties typically sign a written agreement that protects the discussions and proposals that occur within the process.  A recent Massachusetts case upheld the confidentiality of the mediation process even in some extreme circumstances, so long as the requirements of the privilege statute were met.

Second, mediation and collaborative law allow parties to draft agreements and court documents in a thoughtful way, so that even a public Divorce Agreement filed at the end of a case can be crafted in a way that limits public exposure.  The example given in section 4, above, of including asset division information in the impounded financial statement instead of the Agreement, is the type of solution that is encouraged by the joint problem solving in mediation and collaborative law.

Empowerment through Privacy

Divorce, for many, can be very difficult, but considering all of the options can reduce the amount of stress, embarrassment, tension, and financial impact that people experience from divorce.  The control of information is often the difference between feeling empowered and feeling powerless.  Following these tips should help clients and professionals control how much information is kept private, thereby empowering spouses to experience a less traumatic divorce.

Thursday, November 17, 2016

How Private is a Meeting with an Attorney or Mediator?

There are two different levels of protection you might have when meeting with a professional and they are both important: Confidentiality and Privilege.

Confidentiality is a duty for the professional to keep information you share with them private, and different professions have different sources of authority for such a requirement.  In other words, confidentiality is rooted in the obligations of the professional, not necessarily in a right of the client.

Privilege, however, is a right that is granted only in particular situations.  In this context when we are discussing privilege we are referring to a right, conferred by the government, to exclude certain information from being admitted in a court proceeding.  This could mean, for example, that if a privilege applied you could prevent the professional from testifying in court.  Privilege is a right rooted in the relationship between the professional and the client, and is typically owned by the client.

Is the information you share with an Attorney or Mediator confidential?

Any information you share with a mediator or attorney should be kept confidential by that professional, but a mediator may not have the same ethical requirements depending on their profession.  A mediator who holds a license in a field other than law (such as a social work license) will likely have similar ethical requirements as a lawyer for keeping information you provide to them private.  An attorney, when acting as a mediator or in an advocate role, has ethical requirements outlined by their licensing authority.

Either way a mediator or attorney should not be sharing your confidential information, but if you have questions about how they view that duty you should ask in the initial consultation before you hire them.

Is your information protected by a privilege when meeting with an Attorney?

The private communications that you have with an attorney are protected by the attorney-client privilege, unless another person is present (or you are planning a crime together):
What is the attorney-client privilege?Attorney-client privilege is the right of clients to refuse to disclose confidential communications with their lawyers, or to allow their lawyers to disclose them.  The attorney-client privilege is viewed as fundamental to preserve the constitutionally based right to effective assistance of legal counsel, in that lawyers cannot function effectively on behalf of their clients without the ability to communicate with them in confidence.
Why is the attorney-client privilege important?The attorney-client privilege is the bedrock of the client’s constitutionally based right to effective assistance of counsel. From a practical standpoint, it plays a key role in helping clients, including companies, to act legally by permitting them to seek guidance on what the law allows and requires and how to conform their conduct to the law. In addition, the privilege allows organizations such as corporations to investigate past conduct by corporate officers and employees, to identify shortcomings and remedy problems as soon as possible, by ensuring that the client can communicate fully with the investigating lawyer without risk of public exposure. That benefits the corporations, the investing community and society-at-large.
Source: http://www.abanet.org/media/issues/acprivilegeqa.html

Is your information protected by a privilege when meeting with a Mediator?

The attorney-client privilege does not apply to mediator meetings, even if the mediator is an attorney as well.  There are, however, separate privilege protections offered in mediation in some states.  For instance, in Massachusetts there is a statute that provides for a mediator privilege so long as certain requirements are met:
All memoranda, and other work product prepared by a mediator and a mediator’s case files shall be confidential and not subject to disclosure in any judicial or administrative proceeding involving any of the parties to any mediation to which such materials apply. Any communication made in the course of and relating to the subject matter of any mediation and which is made in the presence of such mediator by any participant, mediator or other person shall be a confidential communication and not subject to disclosure in any judicial or administrative proceeding; provided, however, that the provisions of this section shall not apply to the mediation of labor disputes.
For the purposes of this section a “mediator” shall mean a person not a party to a dispute who enters into a written agreement with the parties to assist them in resolving their disputes and has completed at least thirty hours of training in mediation and who either has four years of professional experience as a mediator or is accountable to a dispute resolution organization which has been in existence for at least three years or one who has been appointed to mediate by a judicial or governmental body.
Source: Mass Gen. Laws Chapter 233 Section 23C
This privilege is very powerful and was recently reviewed and upheld in a case where one party tried to challenge confidentiality and bring certain information from the mediation into court after a settlement went bad.  

The second paragraph of the statute outlines the requirements for the mediator privilege to apply in Massachusetts and if you are considering hiring a mediator you should ask them about these requirements, and whether they have any language about confidentiality in their mediation agreement.

Monday, November 14, 2016

New Massachusetts Probate & Family Court Forms - Answers & Counterclaims

Post by Valerie Qian.

We’ve all been feeling a lot of anxiety and uncertainty during this election season. Amidst this uncertainty, the Probate and Family Court has issued two new forms to make the beginning of a Massachusetts divorce case, at least, a little bit less uncertain. Effective immediately, parties who are served with or accept summons on a Complaint for Divorce can respond on the court’s new Answer and Counterclaim forms.

The Divorce Process Options in Massachusetts:

In Massachusetts parties can file a Joint Petition for Divorce or a Complaint for Divorce.  We encourage couples to first consider Mediation and Collaborative options, which typically lead to a Joint Petition filing.  However, sometimes there are emergency issues or protective issues that require the filing of a Complaint for Divorce to get a court process started.  Or, as we see too often, someone who wasn't informed about their other options files a Complaint because they believe that is the only option, and now their spouse is faced with the question of how to respond.

The Complaint for Divorce and Joint Petition forms are available on the court's website. Under the court rules, after someone files a complaint (the "Plaintiff"), they receive a document called a summons.  The Plaintiff is then required to serve the summons on the other party (service can be by constable or accepted by signing in front of a notary). The summons indicates the name and address that the "Defendant" needs to send their Answer and/or Counterclaim to.

After the Defendant is served with (or accepts service of) the complaint and summons, they are required to file a document called an Answer with the court within 20 days. The Answer responds to each of the numbered paragraphs in the original Complaint for Divorce. It is basically a place where they can confirm for the court basic facts of the case like a) their name and address, b) where they were married, c) when they were married, d) their children’s names and ages, and e) the kinds of relief they're asking the court for in their final divorce (which are generally the same in almost every case – a division of property, a judgment of divorce, a parenting schedule, child support, health insurance, etc.).

It is unlikely that a Defendant would be penalized if they forget to send an Answer, but it is good form to always submit an Answer. It tells the court that they intend to participate in the divorce proceedings and will protect against their spouse trying to seek relief from the court without their knowledge.

After someone is served with (or accepts service of) the complaint and summons, the Defendant also has the option to file a document called a Counterclaim for Divorce with the court. The Counterclaim is basically another form of a Complaint for Divorce. When the Defendant files a Counterclaim, they are telling the court and their spouse that they are also seeking this divorce, and they also believe the marriage is over. This is not a required document either, but can be helpful in notifying the court of the Defendant's intentions.

The New Court Forms:

Until recently, both the Answer and the Counterclaim were documents that a party or attorney had to prepare on their own. The court has now simplified matters by creating standardized versions of both these documents. If attorneys still want to prepare their own Answer and Counterclaim documents, they are still free to do so. In terms of format, the Counterclaim closely mirrors the Complaint form, and the Answer for, clearly sets out in numbered paragraphs each section of the Complaint that the Answer is intended to respond to.  If the Plaintiff receives a Counterclaim they should also file an Answer to the Counterclaim.

Most attorneys will advise that the Answer and a Counterclaim in a Massachusetts Divorce are really procedural documents that don’t in most cases make a substantive difference to your case. They are just a place for the Defendant to acknowledge dates and addresses (or correct them), to make sure that they get entered into the system correctly.

The benefit of having a standard form Answer and Counterclaim is that this puts the acknowledgment of these dates and addresses in a clear, neutral and less “loaded” format. We have had clients who have unnecessarily felt stress or concern when receiving their spouse’s Answer or Counterclaim, because they didn’t understand that this was just a standard form response. The neutral format makes the Answer and Counterclaim look like what it is – just a form with factual allegations, rather than a finely-crafted document full of legal arguments. In addition, it’s a format that is easier for pro-se litigants, without attorneys, to understand.  We applaud the efforts of the Massachusetts Probate and Family Court to simplify the procedure of divorce, so that families can concentrate on the more important issues in the their case.

For more information, you can read the court’s Q&A about the Answer form here.

Wednesday, November 9, 2016

A Country Divided but with Hope - A Collaborative Professional's Perspective

Donald Trump and I have something in common.  We both currently hold the title President-Elect.  Last night, Donald Trump was elected as the next President of the United States and will take office in January, 2017.  I am the president-elect of the Massachusetts Collaborative Law Council (and will take office in March, 2017).  Admittedly his election is a bigger deal, and also much more contentious than mine.  That tension needs to be discussed, and I believe Collaborative Law can be instructive in how we make that conversation constructive instead of destructive.

While all the votes are not counted yet (as of the time I am writing this - 9:10 AM EST on November 9, 2016), Donald Trump has won enough electoral votes to win the Presidential election.  He will likely lose the popular vote, though practically speaking the difference is nominal (0.1286%).  That means that our country is divided almost exactly in half when it comes to electing our President.

Source: Politico.com
That division creates strong feelings.  There are many significant differences between Donald Trump and Hillary Clinton and between their political parties.  They differ on domestic policy, foreign policy, economic policy, law enforcement policy... the list goes on.  They also differ in personality, and speaking style, and personal history.  You might wonder, how they can even be from the same country, nevermind the same state (currently).

A House Divided is Familiar to a Divorce Mediator, and Not at all Hopeless

While this division in our country may feel shocking or heartbreaking to you, this actually sounds really familiar to me because I am a divorce attorney and mediator.  Everyday I help couples transition their relationships to separate households and lives.  Many of those couples walk in wondering how they ever married the person sitting next to them.  They couldn't feel more different than they do right now.

And yet, there is a history between them that is different than what sits in front of me on that day.  Many couples choose to be in my office instead of going to court because there is some part of them that recognizes that a thread of connection remains.  Often that connection is their children, but even couples without children may choose a collaborative or mediated divorce because they respect the relationship they once had, even if they have difficulty respecting each other currently.

When divorcing couples have children together they will have an ongoing relationship, and that relationship, while different than a marriage, is an important one.  The quality of that relationship will determine what kind of households their children live in, whether their children live in fear or hope, whether their children feel like they have a place or places they can call home, and whether their children feel like they have the support and confidence necessary to succeed in their own relationships.  But that doesn't mean it's easy to define that relationship.

Many divorcing couples with children face a very hard task, because in that moment of divorcing they feel farther away from their spouse than they ever have before.  They feel divided and that feeling is not just understandable, it's expected.  Collaboration and Mediation techniques help divorcing couples build a new relationship from the loss of their old one by focusing on the interests and goals that each of the people have, many of which will overlap.  The reason this process works better than the adversarial court model at building strong co-parenting relationships between divorced spouses is specifically because of this focus on interests and goals.

Interests and goals connect people, while adversarial positions divide them.  Knowing that you want a safe and affordable place to live is not something I can argue with, even if I disagree on whether you should get to keep the house we own together.  The hard work is in helping scared, and sometimes angry, people express their goals and interests before taking positions, in finding understanding before evaluating options, and in encouraging open communication throughout that process.

A Collaborative Model for Healing a Divided Country

Donald Trump and his supporters may rejoice in his election and the confidence that half the country has shown in him.  At the same time, much of the country feels heartbroken because they feel that his message and his policies are an attack on and endanger their way of life.  If we simply take positions and call each other names then the fighting will continue, the governing of the country will continue to be obstructed by half of the people, and in 4 years we will have another election where half the country feels vindicated and half the country grieves.

Just like we expect divorcing spouses to experience the stages of grief as they mourn the loss of their relationship, I expect Hillary Clinton supporters to be despondent today.  They will likely feel denial, anger, bargaining, depression and acceptance, separately, overwhelmingly, and sometimes all at once.
Donald's supporters may be feeling positive today, but that feeling won't last forever either.  Winning the election is not a win if half the country fights everything you try to accomplish and spends 4 years deciding how to undo your accomplishments as soon as they get back in power.  That is not long-term change or hope, it's simply trading the baby back and forth every 4 or 8 years.  Without real change in how we problem solve, that is exactly what we are poised to do.

When the dust settles, however, it is possible that we can break the cycle of division in this country by looking below the surface and recognizing that we have shared interests, just as we do in a Collaborative Divorce case when we try to prevent people from repeating past cycles of division and tension.

Both Donald Trump and Hillary Clinton supporters want economic security, safety for their family and friends, and the opportunity to succeed.  Both sides often blame the other for  keeping them from achieving those goals.  The history of this country (and the world) has many examples where that is plainly true; groups often oppress those they see as different in the belief that by stepping on the backs of others they will rise up themselves.  But it always fails eventually.  The oppressed will never let you stand on their backs forever.  So why do we repeat that model, and why do we spend so much time trying to prove that the other side is focused only on that model?  It is not a constructive endeavor but it is a convenient shortcut to temporary power.

But there is another way.  The United States was built on ideals that constantly fight back against that basest of human tendencies.  We declared that the interests of all men are self-evident and eventually we declared the same for women.

Now we have to Live Up to that Declaration.  

We have to ask how the interests of Trump supporters and Clinton supporters can simultaneously rise up together.  How can we all prosper more, without it being at the cost of the others?

We have to stop falling into the trap of believing that there is "us" and "them".  Trump's America and Clinton's America are not two separate Americas.  Both sides have an obligation to make America greater.  In deciding how we do that together, we can think about the similarities between the role of citizen and the role of parent.  We have a relationship as fellow citizens, whether we like each other or not, and if we don't work together, our country, our children, our legacy will fail in life and falter.

Once the hangover of the election wears off, you still have a choice to make.  Each and every person in the United States of America has a choice.  You can be angry or depressed: fight and be divided, rant on facebook against "the others", expressing your fears and anxiety over the direction of the country.

OR you can DEMAND better, of your Country and Yourself.  

You can stop yourself from name-calling and you can write and call your elected representatives when you see them do it.  You can reach across the aisle to those who hold different expressed politics than you, and have lunch with them.  Don't just start a dialogue online and think that you've tried.  Real dialogue requires engagement, body language, tone of voice, and commitment to problem solving.  Online dialogue is too easy to walk away from, and it's too common to misconstrue the tone of a post.

If you want to be the change you want to see in the world, you have to live the act of peaceful problem solving daily.  Educate yourself about effective dialogue and problem solving and make a conscious effort to catch yourself when you resort to labelling (and using "you" vs. "I" statements). If you're convinced that you hold the moral high-ground, then you're focused on what's wrong with the other side rather than how you can improve the conversation.  Ultimately you control your actions and not the actions of others, but as I tell my divorcing clients constantly: if you don't take the action that is in your control, then you cannot expect better from the other side.

I am not exempt from any of these trappings either.  I spent the night and early morning depressed about the results of the election.  I am afraid of where our country may be headed, but I also believe that there is still a chance to heal and for good to come out of any situation.  I don't believe that the office of the President of the United States nor the person who currently holds that office has control over my (or your) opportunity.  If you want to have lunch with me to discuss further how Collaborative problem solving works, regardless of where you stand politically, please feel free to reach out to me at jkelsey@skylarklaw.com.

Finally, I want to leave you with some of the lyrics from a song that I have always found inspiration in.  It is a song that highlights that this is not a country made for one group or another (and no election is going to change that):

This Land (excerpt)
by Woodie Guthrie

Nobody living can ever stop me,
As I go walking that freedom highway;
Nobody living can ever make me turn back
This land was made for you and me.

This land is your land, this land is my land
From California to the New York Island
From the Redwood Forest to the Gulf Stream waters
This land was made for you and me.

Monday, November 7, 2016

Are you Forgetting an Important Benefit when Dividing Retirements in Divorce?

Retirement Benefits are often one of the largest assets in a marriage.  That makes them particularly important to consider in a divorce.

We've previously covered the 5 Things you Should Include in a Divorce Agreement when Dividing Retirement Accounts, but we barely scratched the surface when it comes to the different options you might see in more complicated retirement plans.  It is always essential to review the Summary Plan of any retirement account to ensure that you (or your attorney) understand all the benefits and limitations that surround that plan, before trying to divide it.  When the plan is a defined benefit plan, one of the most important and often misunderstood details is how to divide the survivor benefit.

A defined benefit plan, also typically referred to as a pension, is a plan that has a defined amount that will pay out (usually monthly) for the participant's lifetime (instead of a total amount that could run out, like an IRA).  This creates additional questions when dividing these types of accounts because the exact value of the eventual benefit is not an exact number.  It can be estimated based on the participant's lifetime but there is no way to know for sure how long the participant will live.  In fact, to address this possibility most plans have survivor benefits to provide an alternate benefit to a survivor who dies young.  It wouldn't be fair for someone to have built up a retirement over many years of service and then have their family receive nothing just because they died young.  Unfortunately, though, when a participant divorces that exact scenario sometimes happens because parties fail to address the survivor benefit, and more particularly some people fail to assign the "pre-retirement survivor benefit."

Two Types of Survivor Benefits:

Unlike a 401k or IRA that usually allows a participant to assign a beneficiary to receive the funds remaining in the account upon death, a pension usually has the option to assign a benefit only to a surviving spouse.  Once benefits commence for a participant who is married they may have a choice to define a post-retirement survivor annuity.  There may be multiple levels of survivor benefits and they typically reduce the lifetime benefit of the participant.  This means that if the parties in a divorce agree to a survivor benefit for an ex-spouse then the parties will receive less during the participant's lifetime.  This cost should be addressed in the divorce agreement because it can be shared or it could just reduce the portion of the lifetime benefit to the alternate payee ex-spouse.

This post-retirement survivor benefit may be a contentious discussion in a divorce because the participant may not want to receive less during their lifetime to provide for an ex-spouse after their death.  The other survivor benefit, however, does not have this cost.  The pre-retirement survivor benefit does not cost the participant anything because if it pays out it means that the participant died prior to their lifetime pension payments starting.

Even if the parties decide, due to the exchange of other benefits or assets during the divorce, that they are not dividing the lifetime benefit portion of a pension, they should still consider assigning the pre-retirement survivor benefit.  A court order (known as a QDRO or DRO) can be created to assign only this portion of the retirement benefit if that's all the parties agree to assign.  If the pre-retirement survivor benefit is not assigned in the divorce, and the participant dies before receiving any pension payments, then the pension may be entirely lost.  It wouldn't make any sense for a participant to completely lose this benefit just because they divorced, especially since it doesn't cost them anything extra.

Of course, if the participant remarries they may want their new spouse to be the survivor beneficiary and receive any pre-retirement survivor benefit.  This is something that should be discussed as part of the division of assets in a divorce, and negotiated if there is disagreement.  It is sometimes possible to create an order that assigns the pre-retirement survivor benefit to an ex-spouse only until the participant remarries.  This requires careful and thoughtful crafting of an agreement.  Being detailed about these provisions, however, should never prevent people from addressing them.  It doesn't make sense to simply ignore the pre-retirement survivor benefit.  Neither the participant nor their ex-spouse has any motivation to take the risk that the pension is lost entirely adding insult to tragedy in the event of a participant's early death.

At Skylark Law & Mediation, PC we prepare QDROs, DROs and provide consulting services for evaluating, negotiating and writing agreement provisions for retirement plans.  Click here for more information about those services.

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