REVIEW YOUR SEPARATION AGREEMENT AFTER THE DIVORCE

No sooner than your divorce is started, you want it over, to stop the conflict and move on. These are reasonable feelings, although completely impractical given human nature and a slow judicial system.  It is also no surprise that after the divorce is over, most people take their expensive divorce papers and put them somewhere they are not likely to be seen again.

This blog emphasizes the importance of reviewing your Separation Agreement after your divorce to remind you what you agreed upon and what you are entitled to receive.  People are in a bit of a stupor when they divorce.  As vigilant as you want to be, there are pieces of information that didn’t penetrate the emotional haze.  As soon as emotionally possible, but within a month after your divorce, please read your Separation Agreement and your spouse’s last Financial Statement.   Then put the signed Agreement, your last signed Financial Statement, and your spouse’s last Financial Statement in a flat envelope or pocket folder and put them somewhere accessible to you but not your children.

You cannot imagine the number of clients who consult with me post divorce who do not remember portions of the Separation Agreement, even the portions that are favorable to them.  The Agreement is the blueprint for your post-divorce life.  Consult it often.

Hindell S. Grossman, Esq.
Grossman & Associates, Ltd.
(617) 969-0069

REDUCING, TERMINATING OR SUSPENDING ALIMONY DUE TO COHABITATION

The Alimony Reform Act, effective March 1, 2012, finally brought Massachusetts in line with alimony policies in almost all other states by considering cohabitation, retirement and length of marriage as important factors in conjunction with setting the duration of a person’s right to receive alimony.

This week’s article addresses cohabitation, which was the central subject of a trial handled by Grossman & Associates, Ltd. on January 24, 2013 in the Middlesex Probate Court in Cambridge.  The new statute says: “General term alimony shall be suspended, reduced or terminated upon the cohabitation of the recipient spouse when the payor shows that the recipient spouse has maintained a common household, as defined in this subsection, with another person for a continuous period of at least 3 months.”

There is no Massachusetts case yet to help us interpret the meaning of the cohabitation provision, so we can only use our plain English interpretation to anticipate what might happen.

The first hurdle is to prove the cohabitation itself.  In anticipation of the statute, some alimony recipients changed their cohabitation.  People have been known to conceal their cohabitation in order to avoid detection and loss of alimony.  Private investigators report that surveillance for cohabitation has risen.  Those seeking to prove cohabitation look to various sources such as voter registration, tax documents and employment records to show that people are residing at the same address.

Once cohabitation is established, the analysis turns to the alimony recipient’s need, and the payor’s ability to pay.  Whether the need analysis at the time of cohabitation is the same as the need analysis at the time of divorce is to be determined by future case law.  What guides the Judge in determining whether to reduce, terminate or suspend alimony?

The importance of determining “need” has been shown in various cases, such as Heins v. Ledis, 422 Mass. 477 (1996) and Gottsegen v. Gottsegen, 397 Mass. 617 (1986), as alimony is not intended to pay 100% of a recipient’s expenses.  Doing so would only encourage a recipient to increase their spending, incur additional credit card debt, and live a life more lavish than they can afford.  Burdening the payor with the obligation to meet their former spouse’s arbitrary, and perhaps inflated expenses, is unfair.  Determining need is a fact sensitive analysis made by the Judge, who is guided by past cases and a sense of fairness.

So far, many cohabitation cases have settled without a trial, meaning that the parties reached and signed an agreement between themselves which documents the change in alimony.  Their Agreement is then presented and approved by a Judge, who makes the Agreement a Court Judgment.  Such settlements are not decided by a Judge after hearing the facts at trial, but instead are merely reviewed by the Judge for fairness, and are not usually instructive of how your case would be decided at trial.  While these settlements are part of the court’s public record, they are not generally available to the public unless you are one of the party’s to the case or one of the connected attorneys.

The most expeditious way to resolve the cohabitation issue is directly with the opposite party, or through mediation, to explore settlement without substantial litigation cost.  If reason prevails, alimony can be reduced or terminated, an Agreement drafted, signed and approved.  Absent agreement, we wait to see what decisions are made by Judges on this issue, keeping in mind that rarely are two cases built on the same facts.

PARENTS WHO AREN’T RECOGNIZED UNDER THE LAW

The New York Times article about a man who has no legal rights to a child born of his live-in partner by in-vitro fertilization highlights a growing problem of parent’s rights.  Recent cases have shown that the changing definition of family challenges the traditional understanding of a person’s rights and obligations to a child.

Essentially, a person cannot be a child’s actual parent unless it is through legal adoption or biology.  Parenting rights are not acquired by living together, the number of diapers changed, trips to the park, birthdays celebrated or nights of homework.  The right to be a child’s parent does not happen by default unless you have a biological connection to the child’s life.   If not biologically connected, it is critical that a person who wants to be a child’s parent pursue the legal adoption process and secure the approval of a Court.

If named as a Guardian in a Will, a person can garner certain rights to a child along with certain obligations for their care, but they cannot be a “parent” through someone’s Will.   In Massachusetts, the Probate Code permits a Court to appoint a Guardian  for a minor child if: i) the minor’s parents are deceased or incapacitated; (ii) the parent’s consent; (iii) parental rights have been terminated; (iv) the parents have signed a voluntary surrender; or (v) the court finds the parents, jointly, or the surviving parent, to be unavailable or unfit to have custody.    If appointed a Guardian, that person has the powers and responsibilities of a parent regarding the child’s support, care, education, health and welfare.   A minor child age 14 or older has the right to object to a Guardian.

State courts are more and more challenged by the changing constitution of a family.  Recent cases in Connecticut, and elsewhere, show the difficulties in juggling the rights of children to be cared for, the obligations of parents and their partners (regardless of sex or marital status), and the public policies created by each set of facts.

As for people thinking they are parents, the best way to ensure “ownership” of a child is to formally adopt.

Hindell S. Grossman, Esq.
Grossman & Associates, Ltd.
(617) 969-0069

DO YOU NEED A SECOND OPINION?

Perhaps you could use a second opinion about a legal issue you are experiencing.

While a formal process for securing Second Opinions from lawyers is not a recognized practice in legal circles, like there is in the medical field, there is no reason for it to be ignored as it can be an excellent option.    The value of a second opinion, or even a third, is the advantage of different perspectives, approaches and experiences.   If a second opinion yields almost the same opinion as the first advice, then you are more confident of its success.  If not, then you have broadened the options for resolution.

Some clients fear that a second opinion will offend their first attorney.   While I appreciate client’s concerns about my feelings, I am of the position that the client must do whatever necessary to feel that the approach to their legal problem makes sense.  If a client does not have that level of confidence, they should get a second opinion from another lawyer.  A second opinion does not necessarily mean that you need to abandon your first attorney; it only offers an opportunity for additional ideas.  You may choose to bring the idea back to your original attorney without disclosure of the second opinion.   You may find that the second opinion merely confirmed the direction originally suggested.  You may also discover, however, that there is an alternative approach which had not been mentioned.

As a consumer of legal services you should be sure you know the full range of legal options so you can make the most informed decision, weighing the time, cost, commitment and burden required of each option.   Don’t be shy.  Get a second opinion.

Hindell S. Grossman, Esq.
Grossman & Associates, Ltd.
(617) 969-0069

DIVORCE AS A PARTNERSHIP DISSOLUTION

In many concrete ways the dissolution of a marriage is like the dissolution of a business partnership. We examine the entity, identify its assets and liabilities; value its assets and liabilities; then divide them between the partners. While this simplistic approach assists in understanding the process, it is often bogged down in disagreement over definitions, values and timing.

Marriage dissolutions follow the identify, value and divide process explained above when it comes to the business side of the divorce, but the divorce process is further complicated by the unique psychological, emotional and financial needs of the couple and their children. The multi-faceted divorce process requires a delicate balance of interests.

Surprisingly, there is often one part of the dissolution process which is easy, and one which is hard. For example, I have handled cases where the parents stay focused on raising their children, sharing the driving, sports spectating, and educational needs quite well, under the circumstances. However, the same parents can be at war with each other in dividing the assets and liabilities. Similarly, I have handled cases where the spouses are quite resigned to the formula of dividing their assets and liabilities, but at war over the parenting plan. I see this optimistically, in that at least part of the dissolution is without conflict.

Approach the financial part of a divorce as the dissolution of a business. When possible, remove the emotion and focus on agreeing how to identify, value and divide. Disagreement is inevitable, but compromise is often reached by first understanding the imperfection of the process; second, analyzing the process from both sides; third, appreciating the time factor; and fourth, staying focused on the goals.

Hindell S. Grossman, Esq.
Grossman & Associates, Ltd.
(617) 969-0069

CHOOSING A DIVORCE ATTORNEY

Choosing a divorce attorney is an important decision regardless of whether you are initiating a divorce or responding to one filed by your spouse.  The primary difference is in the timeframe available for choosing.  The spouse initiating a divorce has the luxury of time in selection.  The spouse responding after being served a Divorce Complaint has 20 days to respond, which puts unnecessary pressure on the selection process.

Most clients choose a divorce attorney recommended to them.  This is a very viable method for an initial selection, but I recommend that more is needed.  A successful attorney/client relationship is based on a meeting, discussion of strategy and business terms, as well as a genuine comfort and confidence in the attorney.  When selecting, clients assume an attorney’s competency and sometimes let the recommendation alone sway their decision.  I suggest that the choice is based as much on the recommendation as on your intuition about whether you can work with the attorney you are interviewing.

In my experience of handling cases in various areas of the law, clients change divorce attorneys more than other practice areas.  On many occasions, I am the second or third attorney handling a divorce case.  As you can imagine, the change of counsel is both costly and disruptive, but motivated by a client’s deep dissatisfaction with the attorney’s lack of attention, poor results, billing issues, lack of trust or a possible host of other factors.  It is always my goal to be the attorney to finish the case, regardless of where I am in the sequence.

When selecting the attorney that guides you to the next phase of your life, try hard to eliminate the risk of dissatisfaction and choose carefully.

Hindell S. Grossman, Esq.
Grossman & Associates, Ltd.
(617) 969-0069

ARE YOU SURE YOU WANT TO KEEP THE HOME IN A DIVORCE?

Following a recent blog describing Notes and Mortgages, we continue with the real estate theme to better understand the concept of Equity. Most simply, equity is the difference between the value of real estate and the remaining debt. If the real estate value is $500,000 and $200,000 is still owed on the Note, the calculation results in $300,000 of equity. However, this concept gets more complicated.

First, the value of real estate is subjective. Two appraisers are unlikely to agree on the value of real estate and can differ widely depending on the comparable sales they each choose, the adjustments each makes on the property appraised, and the timing. Appraising real estate is an art, not a science. It leaves room for wide discretion. Since the value of the real estate is the first part of the equity calculation, it is important to understand that if the value is uncertain, the amount of equity will also be uncertain.

The second part of the equity calculation is to identify the balance due on the Note. This amount is often available on the (misnamed) monthly Mortgage Statement as the “principal balance”. This amount changes monthly as it credits the amount of principal paid each month. To be precise, the best way to determine the exact amount required to extinguish the debt on the Note is to contact the lender and request a “payoff letter”, which often contains charges exceeding the amount on the monthly Mortgage Statement.

In a divorce, the marital home is often the largest asset. Determining the equity in that real estate requires the calculation above, but minds (and attorneys) will differ in this regard, so here are some important tips:

1) Understand that the equity number is just a guess and do not treat it like cash in your pocket.
2) The equity calculation is based on a value that is likely to change up or down with the market, season and interest rates. It is not static.
3) If, after determining the equity, you choose to keep the house when dividing marital assets, remember that it comes with enormous liabilities such as the monthly payment of principal and interest, real estate taxes, insurance, maintenance, repairs, excess utilities, etc.
4) Keeping the real estate in a divorce also means that you alone will be responsible for the substantial costs of sale when you are ready to sell. Those include the broker’s commission (usually 5% of the sale price), deed stamps (also calculated on the sale price), recording fees, and possibly some repairs to satisfy the buyers after inspection.
5) Consider renting after a divorce instead of keeping the house as it makes the landlord responsible for maintenance, repair, snow removal and lawn care. Renting can simplify your life and cash flow while you transition.
6) Do not let your emotional attachment to the house drive this decision. It should be governed by a careful financial analysis, not emotion.

For more on valuable lessons for divorcing, please read our regular blog updates or call.

Hindell S. Grossman, Esq.
Grossman & Associates, Ltd.
(617) 969-0069

WHAT’S THE DIFFERENCE BETWEEN A NOTE AND A MORTGAGE?

The word “Mortgage” is commonly misused to mean the amount borrowed, and owed on real estate. Mortgages, however, are only part of the equation when accurately referring to debt on real estate and the resulting calculation of equity. The Note and Mortgage are two separate documents. The Note is the IOU to the lender, usually a bank, which states who borrowed the money, how much was borrowed and the terms of repayment (including the interest rate, late charges and what happens if the IOU isn’t paid on time.) The Note is signed by the borrowers and kept by the lender. Notes are sometimes transferred to other lenders in exchange for cash or credit, as they are assets that can be sold. Notes are private documents that they are not recorded at the Registry of Deeds. Once the IOU is repaid, the original signed Note should be returned to you marked “PAID” to confirm that the debt is no longer outstanding and to prevent anyone from seeking repayment from you. Notes can be used to evidence any loan, not just ones related to real estate.

The Mortgage is a separate notarized document that lenders require simultaneously with the Note to provide security for repayment of the Note. Security means leverage in the event that the borrower fails to pay the Note; it allows the lender to collect the unpaid amount by selling the real estate and keeping enough of the sale proceeds to repay the balance owed. Mortgages are public documents specific to real estate and are recorded at the Registry of Deeds so that anyone can see whether there is a lien on any identified parcel of real estate. The Mortgage describes the lender’s right to foreclose on your real estate if you fail to pay the amount due.

When you borrow money to purchase real estate the lender requires that you sign a Note, which evidences the loan, and a Mortgage showing the lien on the property. When you sell the real estate the funds from the sale are used to pay off the remaining amount due on the Note, and the Mortgage is discharged, which means that a document generated by the lender states that the obligation has been repaid and the Mortgage which secured its payment is released. Mortgage Discharges are recorded at the same Registry of Deeds as the Mortgage, and serve to cancel, or discharge, the Mortgage, eliminating the lien.

To be precise, we should say: “Did you pay the Note this month?”, “How much is left on the Note”, and “Let’s refinance the Note”, but language has a way of becoming imprecise, so most use the word Mortgage instead. Whatever!

Please look for future blogs on defining equity in real estate and other interesting topics.

Hindell S. Grossman, Esq.
Grossman & Associates, Ltd.
(617) 969-0069

WHAT IS DISCOVERY?

“Discovery” is a phase of litigation in which information is sought and exchanged. Since the divorce process is one type of litigation, discovery occurs in Probate and Family Court cases as well as cases in other courts. The discovery process is governed by various procedural rules that are similar, but not exactly the same in every court. Types of discovery include, Interrogatories, Document Requests, Depositions, Request for Admissions, and Subpoenas.

Interrogatories are written questions that require written answers from the opposing party. Document Requests are a list of documents one party hopes to seek from another, but only include documents that already exist; there is no obligation to create a document to satisfy the other party’s curiosity. Depositions require the presence of a party, non-party, or business representative to answer questions asked by the opposing attorney that are recorded in a transcript scribed by a court reporter. Requests for Admissions are a list of facts that the opposing party must either admit or deny. Subpoenas are a legal process by which a party to the divorce (i.e., husband or wife) can get documents from third parties (e.g., banks, employers, etc.).

Each type of discovery has its benefits and disadvantages. Cost, time commitment, likelihood of achieving results, and the information targeted are some factors that govern the strategy decision of which discovery methods to use. Interrogatories, for example, can be a useful tool, but I find that a deposition, while more expensive, yields better informational results. A wily party can be evasive in his written Interrogatory questions, but is more likely to answer when under oath and facing an opposing attorney in a deposition because an inquiring attorney can doggedly pursue the answer. A well-written Document Request can yield helpful results, but an uncooperative party will refuse to give incriminating documents, intentionally or inadvertently. Acquiring documents from banks and employers directly yields more complete documents because the third party does not have the same motive to withhold information. Requests for Admissions can be a very useful tool if the fact you seek admitted is perfectly stated, and admitted. However, a person looking to avoid a damaging admission will try very hard not to answer.

Future blogs will provide more about discovery strategy during litigation as well as ways to organize and access the information collected.

Best regards,

Hindell Grossman
Grossman & Associates, Ltd.
617.969.0069
November, 2012

DEALING WITH INCIVILITY

The Issue:

Rule 1.3 of the Massachusetts Rules of Professional Conduct states that all attorneys “should represent a client zealously within the bounds of the law.”  While some lawyers believe zealous advocacy is necessary to represent a client effectively, others believe it is an excuse for attorneys to be uncivil.  In fact, many states, including New York and New Jersey, have removed any reference to zealous advocacy from their ethical rules, suggesting that zealous advocacy is not encouraged.

Litigation style plays a part in this as well.  Some attorneys build their careers on a reputation as aggressive and relentless, even priding themselves as pit bulls.   These lawyers presumably believe this aggressive behavior will be successful in the courtroom and attract clientele.   However, studies suggest this this style is counter-productive and inefficient.  Andy Mergendahl of The Lawyerist opines, “To be an effective lawyer, you need to win people over. You do that by being prepared, courteous, and firm. You don’t do it by being aggressive.” (http://lawyerist.com/aggressive-lawyers-often-finish-last/).  It also seems that clients have clear preferences about their attorney’s style.  Some want pit bulls.  Some want calm professionalism.  Some want big firm images and some want some small firm intimacy and service.  Some want an amicable collaboration and some want to declare war.

The Recommendation:

So how do we deal with situations where the other side is employing “Rambo” or “Sherman tank” tactics?   We think it’s important to stick to the plan and not let a hostile party dictate the way the case is handled.  While aggressive, rude behavior may be infuriating and feel abusive, it does not require that we respond in kind.   Doing so will perpetuate the behavior, and at worst, drag us into an unnecessary battle.  Our ideal approach is to remain calm, polite and professional, while also firm and confident in our position.  Being pushed into war seldom turns out well and makes a high conflict situation substantially more stressful.