This is not a political outlet.  So, I will confine my “political” comment to a single set of facts.  17 people killed yesterday. 32 school days so far this year.  Time Magazine reports 18 school shootings.  So a school shooting every other day.

The interviews I heard last night on television provided a haunting reminder of a conversation I had earlier that day with a colleague who treats families going through divorce.  We spoke about a common case.  The child we were discussing was enduring an acrimonious divorce.  The child is caught in the middle and is traumatized by the experience.  The therapist related to me that part of his concern was that the child we were discussing seemed to have no friends; no social connection of any substance.  The kid is in a lot of pain and his parents are so absorbed by their own suffering, they have little empathy to give.  So, the child spends hours of time alone in his home immersed in social media.

Last night I listened to coverage of the 19 year old shooter.  I heard interviews with his classmates.  The child was a loner with no identifiable friends despite efforts on his part to connect with peers directly and via social media.  Children in the high school who knew the shooter before he was expelled described him as strange and his efforts to connect with his fellow students were rejected because he was odd.  So, this child posted some very troubling things online and exercised his right under Florida laws to acquire an AR-15 automatic weapon shortly after attaining 18.  That gun fires more than 700 rounds per minute.

Last year Parkland was named Florida’s safest city.  The mayor described the community as “close knit.”  Like Columbine, Colorado, Sandy Hook, Connecticut and Nickel Mines, Pennsylvania, these are towns where mass shootings are not supposed to happen.  But, let us be plain, we are not a close knit society.  Our kids are more vulnerable to this kind of aberrant conduct than we would like to think.  If you watched the interviews with the affected children, you can tell they don’t even know what they have just lived through.  If anything, they are far too poised for people who have witnessed the death of mentors, classmates and come closer than they can consider, to being among those for whom there will never be another Valentine’s Day.

Eighty nine years ago yesterday, America learned of the brutal murder of seven men in a garage on North Clark Street in Chicago.  The killings became a part of American history.  Three months ago we watched 58 people killed and 851 wounded in Las Vegas.  Cellular phones and computers can make us more connected than we could have ever dreamed possible a generation ago.  But, we are less close knit and more disconnected than ever.  When will we realize that “connectivity” is not just a reality?  It is also a mirage.

President Trump has concluded that the nineteen year old shooter was mentally disturbed.  That should be self evident. But, a child like this lurks in just about every high school in America.  The question is, do we accept school shootings as part of the American way of life or are we going to do something to find these kids and give them help before more children die.

2017 was a remarkable year in many ways.  In late Spring we watched one of America’s favorite entertainers tried for sexual assault.  In October, prominent producer Harvey Weinstein  was accused of sexual assault by more than a dozen women.  The list of prominent men who have fallen from grace since the Weinstein story broke on October 5 would occupy a blog site of its own.  As this is written, a story has broken that a California legislator and leader of the #MeToo movement has found herself charged with sexual harassment by two people; a former staffer and a lobbyist.

While is it always tempting to write about those who are prominent, most of us who live in relative obscurity view them as “different.”   We like to think that perhaps the victims were complicit or at least indifferent to what occurred.   A common refrain I hear, even from women, is that the victim knew what she was getting into.  Others rally to the side of the victims, plainly asserting that the mere assertion of assault is prima facie evidence that it occurred.  I try to stay away from these stories because where wealth and power enter the equation, reality can become distorted.

That is what made my view of Anderson Cooper’s interview of Jennifer Willoughby so compelling.  Willoughby was not a public figure when she summoned the police to intervene in her domestic life in June, 2010.  She was just the bride of a 32 year old Senate staffer.  On paper, Rob Porter was everything a person would want in a spouse.  Harvard.  Mormon missionary work in London.  Harvard Law.  Rhodes Scholar at Oxford just like his father, the professor at Harvard.  But, in 2010 Ms. Willoughby reports that despite his polished and highly effective work in the United States Senate, their domestic life was overtaken by fear for her physical safety.

I would commend every parent with teenage children to make them watch the CNN interview with Willoughby.  The interview can be found at Daily Beast with reference to Jennifer Willoughby.   https://www.thedailybeast.com/rob-porters-ex-wife-warns-hope-hicks-hell-abuse-you-next  As I began to watch it I did so with some lawyerly skepticism, mainly because the story was old as was the divorce of the couple.  Many divorced couples love to dish on each other while millions watch.  Jerry Springer has made that model work for almost three decades.

But Willoughby was different.  She came straight out and explicitly said she had no agenda and wished her former spouse no harm.  I was still skeptical.  Until, in a very unscripted way, she began to ponder how what occurred arose from her choice of Rob Porter as her spouse.  Unlike many victims, she was not transferring blame to herself.  Not at all.  She was exploring how a relationship that once felt so right had traveled to such a bad place.  In 35 years of practicing law on behalf of victims and perpetrators, if I had a wish for all of them, it would be the self-conferred gift of introspection.  Whether knowingly or not, we have the ability to push the emotional buttons of those whom we profess to love. On July 28 Redbook published 50 phrases that we use everyday that push those anger buttons.  On November 21, 2017 Best Life published 20 Things No Husband Wants to Hear.  Most of these phrases would not be welcomed by any partner.  Any jurist who hears domestic violence cases will tell you that it is common to hear “Your honor, he punched me for no reason.”  Only psychotic people punch other humans “for no reason.”

If there was one area in the Willoughby interview where I think she strayed too far, it was her speculation about the woman her former husband is today dating.  Every relationship is different.  Ms. Willoughby may have incited violence without her even knowing how she did it.  She may have incited violence through conduct that even outsiders would not notice.  This is no justification for any violent conduct on the part of her then husband, but, rather than identify patterns of behavior that cause that domestic violence we rush to label people as “bad” or “good”.  What I found most instructive about the Jennifer Willoughby interview was that she made clear Rob Porter was not a “bad” man; he was a man who had issues with controlling his anger.  Thirty years ago, addiction was equated with moral failure.  We know better today and this writer submits that our views of anger and the violence it causes merit the same evolution in thinking that we have witnessed with substance abuse.  People afflicted with anger management problems do not benefit from ostracism; they require help.

Again, I commend every reader to give Jennifer Willoughby 26 minutes of time by listening to her tell her story.  Of course, there are two sides to every story.  But, no matter what the truth, Ms. Willoughby’s story is one every person can learn from.

A Superior Court decision last month by Judges Lazarus, Bowes and Ott reminds divorce practitioners that there are distinctions to be drawn between the rights of intestate surviving spouses and the rights of a surviving spouse to elect “against” the will of a decedent.

We start with some old news.  When the divorce code first came into effect in 1980 the rule was that the death of a spouse had the effect of abating any divorce action which had not been concluded by a final decree.  The 2005 Amendments to the law provided that once grounds for divorce had been established, the action could proceed with the decedent’s estate substituted as a party in the action.

Thomas Scarpaci died in 2013 while a divorce action was pending.  Wife had previously filed a Protection from Abuse Claim, but had withdrawn it.  The divorce action had been pending for almost six years when Thomas died intestate.

Widow Patricia filed for letters of administration.  In 2015 she circulated documents at first indicating that the estate would be divided among the decedent’s children and filed an inheritance tax return stating this was how the estate would be divided.  But, several months later her counsel issued a revised distribution statement indicating that she would be taking her share.  This distribution schedule was also not filed. When an audit status was called, the children of the decedent asked to strike the election and deny her the right to claim an intestate share.  After briefing, the Trial Court in Allegheny County sustained both arguments.  Wife appealed.

The Superior Court first looked at the issue of forfeiture of the right to take a share of decedent’s estate under 20 Pa.C.S. 2106.  The court notes that notwithstanding the length of the divorce, grounds had not been established as consents were not filed nor had either party perfected the existence of a two-year (now one-year) separation.  Thus the statute was inapplicable.

The second ground relied upon by the trial court was that the widow’s conduct warranted denial of her right to claim because she was guilty of non-support of her husband under Section 2106(a)(1).  The Superior Court held that the burden to prove non-support was upon the heirs advancing that claim.  The Court further notes that while alive, husband never prosecuted a claim for support and that the argument that wife should have supported him notwithstanding the absence of a claim was insufficient.  The object was made orally in the context of an audit proceeding.

In this case, the court never conducted a hearing or received evidence in any other form.  Curiously, the order deciding forfeiture was reversed without any remand for hearing.  The Court did note that many required pleadings, including an explicit request to declare wife’s interest forfeited, were not filed.

2017 Pa. Super. 393 (12/13/17)   http://www.pacourts.us/assets/opinions/Superior/out/Opinion%20%20Reversed%20%2010335312930622742.pdf

*A NOTE REGARDING OUR BLOG OF 1/3/18: We wrote on Passarelli Trust, a reported decision holding that failure to specifically disclose all assets placed in trust was not sufficient to dismantle the trust on the basis of fraud.  Earlier this month the Court withdrew this holding and ordered the matter argued en banc.

As this is written, the House and Senate this week are scheduled to vote upon a conference report of both houses of Congress which will “reform” tax law in a major way for the first time since the Reagan administration.  In order to secure passage, Congress needed to find some revenue enhancements to offset the tax reductions allocated to corporate and estate tax payers.

As we predicted in November, alimony as a tax deduction to the payor and an element of income to the payee, appears to be one of the revenue enhancers Congress decided to keep in the final bill, with one twist.  The House version ended alimony as a deduction for any decree or agreement formed after December 31, 2017.  The Senate version of the reform bill did not change the rules relating to alimony.  Thus, we anxiously awaited what would come out of the conference report published on Friday, December 15, 2017.  The 1000 page report can be found at http://docs.house.gov/billsthisweek/20171218/CRPT-115HRPT-466.pdf . Make certain you have your tax code with you when you start to read as the conference report is only a description of the amendments without the Code.

We did this.  In a nutshell, the Conference Committee adopted the House version but delayed implementation for one year.  Therefore, if you are negotiating or litigating a divorce case and you conclude your matter by agreement or decree before December 31, 2018 (a year from now), the old alimony rules apply.  But, beginning with tax year 2019, any new decree or agreement providing for alimony will be tax free to the recipient and nondeductible by the payor.  As Steve Hurvitz, current head of the Pennsylvania Bar Association Family Law Section observed when he read the bill; “There will be a lot of deals made in 2018.”

The effect of this and other changes in the Tax Code “on the ground” in Courthouses across the state is going to be seismic.  The current support guidelines have deductibility “baked into” the formula.  So, Congress is ripping up those rules.  Other adjustments to gross income that are used to calculate net income for purposes of support are similarly affected.  Mortgage interest is capped at $750,000; state and local tax deductions (including real estate taxes) are also capped at $10,000 ($5,000 if filing separate).  Personal exemptions disappear.  Home equity loans are no longer deductible.  All miscellaneous deductions (e.g., accounting tax prep fees) are eliminated.

The standard deduction is now:

Individuals:  $24,000 if married joint

Heads of Household:  $18,000

Single and Married Separate filers:  $12,000

Indexing rates and other tax items (dependency exemption ) for inflation has been repealed.  The child tax credit is elevated to $2,000 per qualifying child and would not phase out until $200,000 for non-joint filers and $400,000 for joint filers.

One thing would seem to be clear.  If you have a visit to Domestic Relations or a court proceeding in support scheduled for early next year, none of the algorithms in the support calculating software are going to provide a reliable result.  Perhaps the largest adjustment relates to income paid through a qualified partnership, “S” corporation or sole proprietorship.  Twenty (20%) of that qualified income is deductible.  The practical effect of what is or is not deductible is going to be the subject of IRS created regulations.

We have still not seen a copy of the Senate bill although PBS Newshour reports that the final version adopted by the Senate was not circulated in the Senate until late Friday evening and about 5 hours before the vote.  However, it appears that the Senate bill does not change existing alimony rules.  As noted on Listserve last month, the House version does abandon alimony as a deduction effective January 1, 2018.  If you are negotiating an alimony provision you need to be carefully following this issue on behalf of clients.  The one thing which all reports appear to confirm is that tax reform is a freight train that will not be stopped.  The House is scheduled to go out of session on December 14.  The Senate one day later.  The House needs to pass a bill in that time and the Senate and House need to decide on a “common” bill for joint passage and transmission to the President.  The House is circulating a bill that would forestall next week’s government shutdown until December 22, 2017, which would signal that they plan to extend their session.  But, suffice to say, the next ten days should provide plenty of excitement.

This is actually about executive compensation.  Not just any executive but senior, senior executives. If you have not noticed, we live in a brave new world where many public companies are seeing large blocks of their stock being acquired by private equity companies like Blackstone, Carlyle Group, KKR or Bain Capital.  To discourage these often hostile takeovers, many businesses have developed plans to make the takeover financially unattractive.

The one we have observed in recent years that should be evaluated in a divorce setting is an employment agreement that contains special “change in control provisions.”  Many large companies have various forms of equity and pseudo equity arrangements like stock options, restricted stock, performance stock and phantom stock awards.  The goal of these plans is to retain senior managers and incent them to drive profits and stock price higher in the hope that if they remain with the employer they will share in advances in stock price.  Most of these plans have graduated vesting of the incentive equity over three years. To ward off hostile investors bent on takeover, the employer writes into the agreement that, should there be a change in control of the company, all unvested grants vest automatically and must be paid out to the employee.  Thus, if a takeover target is “acquired”  the acquiring company has to cash out not only what is vested in employee equity but the unvested piece as well.  That can crimp the cash position of any business but in recent years private equity investors have not been much deterred by these disincentives.

So, many of us review employment agreements and often they contain obtuse references to things like “change in control.”  Don’t skip over those clauses too quickly, because you could find, as I have in two recent cases, that a buyout of the employer vests all options or other contingent arrangements and makes the employee eligible for an immediate payout of what was a form of deferred compensation.  Note as well, that some emoluments like pensions, non-qualified retirement plans and other forms of benefits may be “supersized” by the acquisition experience.  The pension that was $3,000 a month, might magically become $6,000 without the employee spouse doing more than being on payroll when the magical event occurs.  Even if these blessed events occur after separation, they commonly arise under the terms of agreements or awards made before separation.  They are enhancements coming about not because of post separation labor or contributions but simply, “because” the employer was targeted for a buyout.

So back to Roy Rogers and his famous steed.  A single “Trigger” acceleration occurs when one event triggers the acceleration of vesting, allowing an equity owner to receive the full or partial value of his or her stock.  Typically, they are related to the sale, merger or restructuring of a company.

These arrangements have evolved over time. In olden days, no business wanted to be “acquired.”  But over time some companies have not been so opposed to corporate courtship.  They realize that many employees would take the enhancements and walk out the door for other pastures and that this was a pronounced “negative” to potential corporate suitors.  So they developed the “double trigger” enhancement.  Double trigger requires two events before enhancements and automatic investing occur.  The first is the acquisition, just as before.  The second is the termination of the employee without “cause.”

Single trigger acceleration is unpopular with investors who generally want to position the company for acquisition.  One of the first things that acquirers review as part of their due diligence is vesting acceleration rights.  This is because they largely want to ensure continuity of the talent and operations that made the company prosperous in the first place.  If a key employee has a vesting acceleration right upon the company’s sale, then the buyer is at risk of losing the talent that built a successful organization.

For this reason, single trigger acceleration of vesting that’s conditioned on an ownership change is unpopular.  It means that if the new owners want to retain these employees, they’ll need to sweeten the pot to incentivize the original employees to continue with the new organization, driving up the cost of the transaction.  On the other hand, vesting acceleration clauses can lead to a lower acquisition price to offset buyout costs.  The result is diluted stock value for shareholders and investors.

A double acceleration clause requires two events to trigger vesting acceleration.  One event is the sale or merger of the company, and the other is usually termination of the employee without cause.  These are more attractive to potential buyers since they tend to promote mutual benefits to both the key employee with the acceleration rights, as well as the acquiring entity.  Rather than triggering automatic acceleration upon the event of a company’s acquisition, another event is required in order to trigger vesting acceleration; the employee’s termination. Many acquiring companies want to keep the acquired management and or sales force in place.  Those are the geese that laid the eggs the acquiring company wants to keep producing.  So the employment agreements for these individuals don’t make the special vesting occur until the employee is terminated.  The acquiring business would rather keep its powder dry to pay retention bonuses or provide other incentives as part of the acquisition.  These, alas, are probably post separation enhancements. But if the employee is released without cause within a defined period (typically 24 months) after closing on the merger or acquisition, that severed head is going to vest in many different forms of deferred compensation based on the original employment agreement.

Every case with an important executive merits a request for all agreements between employer and employee-spouse. Those agreements merit attention for the reasons we have specified above. Because many employees may someday be invited to waddle over to the Fixins bar for a heapin’ helpin’ of vested options and benefits.   A non-employee spouse or former spouse may be entitled to a share of the fixins.

The holidays are not upon us but they are not far away either.  If you are separated and your holiday plans for sharing custody are not, “set” it is well-nigh time to begin the discussion because November is not a good time to start Thanksgiving discussions and December is going to follow immediately.

If this has been your “separation” year for good or for bad, you need to understand that when it comes to old holiday traditions, all bets may be off.  Yes, your family has always spent Christmas Eve preparing the seven fishes at grandma’s house.  But this year, one of the fish is not being invited and that fish may put up a stink about it. Typically,  Courts divide holidays and alternate major ones so that both parents have a crack at Christmas morning or the first Seder.  One parent will get the odd years and another the even ones.

But, this short essay has another consideration too, and it is one courts do not customarily address.  If you separated this year, it is not unlikely that the separation brought a new person into the family picture.  Perhaps you were the one who fell in love with someone at the gym or on Facebook.  Perhaps, your spouse returned from his or her high school reunion with an old romance rekindled.  As most of us recall, new romance offers a special thrill.  For most, it is exhilarating. If you have ever been the person who was “dumped,” the feeling is not quite the same.

Typically, exhilaration prompts a desire for celebration.  Get a promotion at work and you want the whole family to celebrate, just as you would when a child completes an achievement, whether finishing kindergarten or graduating school.  But, romance is a lot trickier when family is “involved.”

Rarely do two spouses fall into new relationships at the same time.  So usually, when a separation occurs, one-person steps into a new relationship while another is left without any.  Imagine being a child, of any age, and encountering your first holiday with one parent ecstatic about his or her new love and another mourning the failure of a marriage.  One parent is telling you where they went and what they did with their new love interest, while the other is visibly in pain from the same separation.

If you are the parent in the “new” relationship, for the sake of your kids “Curb Your Enthusiasm.”  They are in an incredibly awkward position.  They will be celebrating the holidays with two parents, one wanting to fete a new relationship to a degree that becomes nauseating, the other mourning the loss of one.  For children of all ages, whether their parents had a good marriage or a bad one, it is the only marriage they knew growing up.  Separation signals the death of their parents’ relationship and that is a death that they are trying to cope with.  They may actually like your new best friend or perceive merit in your marital decision.  Even when parents separate based on common understandings, if one parent has a date on New Years’ Eve and the other does not, the one “without” will feel inferior and “judged”.

Oh, and lest the point be missed, do not assume that your children will share the same attraction to your new friend that you do.  They will often judge that person harshly as the catalyst of their family’s break up whether the fact is true or not.  They certainly will be curious to meet the new Mr. or Ms. Right, but they will also be suspicious.  Since the Middle Ages, we have lived in a world where marriage has been viewed as a “forever event”.  A lot has changed in the past century but even the most cynical of us view marriage as more important than who provides your cable contract or cleans your furnace. If you are happily separated, enjoy your joy quietly, and, don’t delude yourself into thinking that your joy is shared by your kids, no matter what their age.

The September 7 issue of TIME Magazine features our obsession with childhood sports.  The statistics tell the story.  In 2005, school age children played sports at a combined cost of about $8 billion per annum.  Today that number is about $15 billion, almost double. And, during this same period there was no increase in the population of American children.  About 73 million, then and now.  So, how about household income over the same period?  Nominally, it went from an average of $45,000 to $50,000, but if you adjust for inflation, it actually declined a little bit.

This writer’s conclusion?  Americans are spending money they don’t have on something they want and enjoy but do not need.  The cost of team sports for children is itself frightening.  Time reports these as average costs including enrollment, uniforms and lots of travel:

Lacrosse                $8,000

Ice Hockey            $7,000

Baseball/Softball  $4,000

Football                 $2,700

Soccer                    $1,500

Basketball              $1,150

This is not a sport economics blog but we see this every day in our divorce practices.  Parents fight over the logistics of these sport activities. They fight over who will pay.  They fight over whether the child belongs in the sport and, as we recently noted, whether the risk of injury exceeds the benefit.

As the cost of college rises, we also see many parents eyeing their children’s athletic skills as something they can capitalize upon in the form of athletic scholarships.  Putting money in a 529 plan is a tedious way to prepare for college.  But travel with the child’s team to Baltimore or Richmond to watch 72 hours of continuous soccer is now viewed as an “investment.”  Curiously, as time has passed, emphasis is now focusing on athletic performance at younger ages.  Time reports of colleges following “star” athletes at ages as young as 10.  Middle school is now where the talent is first evaluated.  This means, the sport and the child must be nurtured for seven years before the scholarship is awarded.  And, children are seeing repetitive motion injuries crop up more frequently because many of these sports are now scheduled “year round.”  A gifted basketball player cannot afford to risk his future by playing another sport where he could be injured, or worse-yet, his shooting and passing skills are allowed to wither.

In May, I testified before the Pennsylvania House of Representatives about some possible changes in support guidelines.  The witness before me was a Father who, together with his wife, invested heavily in a child’s future as a competitive snowboarder.  Much of this investment was borrowed using husband’s credit cards.  Shortly after it became clear that son’s snowboarding career did not have much promise, wife departed leaving husband with massive credit obligations.  Then she had the temerity to sue him for support.  He wanted relief from the support guidelines because a lot of his income was paying credit card debt associated with promoting their child’s sport.

I must confess, I did not have much sympathy for either parent.  But, as the Time article observes, modern day parents have difficulty saying “no” to their need driven kids.  What child would not want to go to Baltimore, stay in a hotel and hang with his friends while assembled to play back to back softball games on gorgeous college campuses?  Unfortunately, the psychological community is warning that in addition to premature serious sports injuries, many children and their families are starting to experience competitive sports burnout. Especially where scholarships are involved, many competitions and tournaments are mandatory because that’s where the college coaches and scouts are going to be found.  I spoke recently with a fellow lawyer whose child is still reeling from seeing that her son finished both college and his baseball driven career with nowhere to go.  His persona and all of his goals were erected around his athletic talent and now that talent no longer had value.

This is a bad cycle and one that often robs the children of their physical and emotional well-being while robbing their parents’ purse with little chance of return.  Each year about 400-500,000 high school kids play baseball, soccer and basketball.  Another 1.1 million play football.  The likelihood they will take this skill to the professional world is frighteningly small.  Baseball: 1 in 760; Football: 1 in 600; Soccer: 1 in 800; and, basketball: 1 in 1,860.  Sports have much merit. But all good things must come in moderation.

There is a world of information on the internet.  That includes a huge number of websites professing to advise you about divorce.  And among the topics often discussed on these sites is mediation.  Not a week passes without at least one client asking whether they should mediate one or more issues arising from separation and divorce.

Mediation is non-binding negotiation without lawyers.  What could be better?  Get the job done without the expense of the lawyers.  So, it naturally follows that lawyers must be inalterably opposed to mediation.  Right?

When clients ask us about mediating their particular case it does put us in a predicament.  If we advise them to mediate, the inference arises that we add no value to their cause by our representation.  If we advise against it, it appears that our interest in earning a fee has trumped their interest in avoiding unnecessary legal expenses.  So where lays the truth?  A monograph such as this can help because our advise is generic and does not apply to any one case.

In mediation the parties sit down with a neutral person, usually trained to mediate, who listens to each party and attempts to forge common understandings about what is in controversy and how each party’s interest can be accommodated.  It is quite different in approach from litigation, which often takes on a “winner takes all” approach.  Mediators are supposed to remain absolutely neutral through the mediation process.  They are not even supposed to suggest a solution that may appear evident to them because they are then interfering rather than expediting the mediation process.  Where agreement is reached, they usually will confine their roles to creating a memorandum delineating the understanding and ask the parties to have their respective lawyers prepare an agreement to be signed.  There is no question that when a mediator is talented and the parties are motivated to resolve matters, mediation can chop through many controversial issues in quick order.

To be effective, mediation requires three elements.  The first is that both parties are motivated to settle a matter.  Everyone likes to see themselves as motivated to avoid controversy but most of us come to a controversy with the idea that because we are right, we should get what we want.  Mediation has nothing to do with what is right or fair.  It is about compromising matters with an eye towards giving each party the most he or she can get from a negotiation.  But in just about every bilateral (two-way) negotiation, what I get comes at your loss and what you get comes at mine.

The second element required in a mediated negotiation is that each party comes equally well informed.  This is where folks often overestimate their knowledge of their own assets.  If I offer to swap $100,000 in money market assets for an $100,000 IRA, is that an equal division?  The answer is that it is not, but arguments can be made that either one of the assets is more valuable than the other depending upon the facts.  Of course, if I never tell you about an asset or I fail to tell you that a stock option will incur ordinary income tax rates when exercised, I have a decided advantage in the negotiation because I have superior information which I have failed to share.  Bear in mind, the mediator is not supposed to ferret the facts.  The mediator’s role is to moderate discussions directed toward compromise.

The third and final element necessary to mediate is emotional strength.  In divorce related mediation this can often be the fatal flaw.  More often than not, men are trained and temperamentally suited to be negotiators.  Negotiation is a game at which some win and some lose.  Women tend to be motivated to avoid conflict and promote compromise.  This often spells doom in a world where the combatant finds him or herself pitted against a party predisposed to settle.  This rule is by no means fixed in a sexually stereotypical sense.  Again, it is important to note that the mediator does not have the responsibility to level the playing field.

So, having made these observations and noted that there are no hard and fast rules, is there a common sense guideline as to when to mediate and when to avoid it?  Yes, but even these rules come with qualifications.

First, custody issues are probably the most productive area to mediate.  The reasons are several.  The facts are relatively well-known or easily ascertained.  Second, custody arrangements are rarely permanent.  An arrangement negotiated and making sense today could be useless and silly four months from now.  By law, any custody arrangement reached by parents can be discarded by a Court if it later finds that the agreement is not in the child’s interest.  Moreover, one can hope, naively perhaps, that each parent has the child’s interest at heart.

When mediating economic issues such as support and property, it is imperative that you feel that you are equally well-versed as the person you aspire to mediate with.  When dividing simple assets like bank and brokerage accounts the process can be fairly straightforward.  The key is current information and an understanding of how the assets work from a management and tax liability standpoint.  If you are not clear on these points, you could be giving away the store without even recognizing it.  Some issues, such as stock options, retirement plans and closely held businesses can be so complicated that mediation almost never makes sense.

The other factor which should be kept in mind is that in classic mediation, the mediator gives no thought whatsoever to “what a court would do.”  Pennsylvania, New York, New Jersey and Delaware are all equitable distribution states.  This means that assets are usually not divided equally, but based upon an imprecise formula that assays how long you were married, how much you can earn, what you contributed to creating the marital estate and other such issues.  The outcomes vary from case to case and state to state.  You could form what you perceive as a “fair agreement” in mediation to discover that you would have gotten a far different result if you relied upon a court to make the division.

So, should mediation be avoided?  Absolutely not.  But it is worth knowing the benefits and detriments to the process as it relates to your case before going into the process.  Once in mediation, you are not bound by your agreements unless you choose to affirm them outside mediation.  But you don’t want to invest in this intensive process only to find yourself abandoning the agreement you said you intended to make.  The prudent course is to discuss the process, its potential and peril before actually enrolling this exercise.

 

 

We last wrote about Bitcoin in late March, 2014. The principal concern we expressed at that time was that these cryptocurrencies might form a refuge from financial disclosure in the typical divorce setting. The specifics of how these assets work is in the earlier article and available on line as part of our archive (search: bitcoin). The one thing that had to discourage this medium of investment was its volatility. People who buy a currency tend to like it to have a stable price. And in 2014 bitcoin was offering a wild ride. When first offered Bitcoins traded for pennies. But in late 2013 they rose quickly to over $1000 per unit, then plummeted to just over $400 in April 2014. From then until late Fall of last year the “coin” traded between $200 and $600. But then off to the races it went once again. Today, the once lowly bitcoin is trading for about $2600 each. Great news for those who bought at $200 but again, most people are seeking stability and not volatility in currency holdings.

Enter a new crypto with the name Ethereum, launched by a college drop-out in mid-2015. The aptly dubbed “ether” has gained adherents much more quickly than its competitor. The coin was a bit more stable trading until February of this year at under $15. But, since then, it has also become highly sought, driving prices from $20 to $380 in just a couple months. In the past few months, the New York Times reports that 100 companies have signed on with the Enterprise Ethereum Alliance including several Fortune 100 companies.

So, another form of asset for lawyers to monitor, which remains highly volatile but today, at least, is highly sought after.