Commissioner Alan Clements (Ret.) was recently interviewed

Transcription

1 Newsletter Editor Debra S. Frank, j.d., cfls N E W S L E T T E R Association of Certified Family Law Specialists FALL 2009, NO. 3 WHICH COURSE TO TAKE IN FAMILY LAW DISPUTES The Public Court or a Private Neutral? A View from a Northern California Jurist Commissioner James H. Libbey (Ret.), JAMS jlibbey@jamsadr.com The worlds of the public court and the private neutral are very different. Each offers different services at different costs, both direct and indirect. The question of whether to retain a private neutral or not needs to be asked in every case. However, the answer is not always going to be yes. The use of a private neutral in a family law case 20 years ago was virtually unheard of. Even 10 years ago, the use of a private neutral was only occurring in a few, very high-value family law matters. Today, although the down economy may be having a temporary impact, the trend toward more cases going to private neutrals continues. There is little doubt that the future of family law practice will include the private neutral to a greater and greater extent. Family lawyers should consider the use of a private neutral in nearly every family law proceeding, particularly those in which there is counsel on both sides of the case. Of course, Continued on page 26 (Libbey) A View from a Southern California Jurist Commissioner Alan Clements (Ret.), JAMS aclements@jamsadr.com Commissioner Alan Clements (Ret.) was recently interviewed by Attorney Stephen Temko, CFLS, CALS. Commissioner Clements provides his perspective on the use of the public courts versus the use of private neutrals. Q. Commissioner, tell me about your background? I was born in New York City and grew up in San Diego. I graduated from the University of Pennsylvania in 1969 with a degree in history. I went on active duty with the U.S. Army for five years and returned to San Diego in I joined the San Diego Police Department and worked on my Master s degree at Chapman College. I then went on to law school. In 1979 I obtained my law degree from Western State University School of Law, which is now known as Thomas Jefferson Law School. I started to practice law in 1981 and became a Certified Family Law Specialist in In February 1988, I became the first Superior Court Commissioner in San Diego County. I was fortunately assigned to Family Law and stayed there Continued on page 26 (Clements) W H AT S I NSIDE Editor s Desk 2 Debra S. Frank, j.d., cfls President s Message 3 Joseph J. Bell, j.d., cfls Letters to the Editor 4 Collabo rative Divorce Practice In California 6 Len Weiler, j.d., cfls Karen Heller Berdy, j.d., m.b.a. Parenting Plan Coordi nation: A Hybrid Role for ADR in Family Law 8 Angus Strachan, ph.d. ACFLS Responds to State Auditor s Audit of Sacto and Marin County Family Law Courts: Report of Legislative Coordinator 10 Diane Wasznicky, j.d., cfls ACFLS 2009 Officers Ballot 11 Deferring the Sale of the Family Residence 12 Stanley L. Bartelmie, j.d., cfls Difficult Issues Encountered in Determining Income Available for Support from Business Interests 14 Brian M. Boone, cpa, m.b.a. The QDRO Reader, Chapter 6: It s Lord Gillmore Again! Hie to the Castle, but beware the Rook! 16 James M. Crawford, Jr., j.d. Supercharge Your Firm s Infra structure for Greater Effectiveness 18 James Jim Schaefer, cpa ACFLS Annual Holiday Party and Hall of Fame Award 21 ACFLS Reception at the 2009 State Bar Annual Meeting 24 ACFLS CLE on DVD Order Form 40 Custody Matters 42 Leslie Ellen Shear, j.d., cfls 2010 Spring Seminar Preview 45 Reflections on the Human Side of Family Law Practice: Finding the Joy 46 Heidi Tuffias, j.d., cfls

2 NEWSLETTER FALL 2009, NO. 3 Association of Certified Family Law Specialists From the Editor s Desk Debra S. Frank, j.d., cfls ACFLS Newsletter Editor Los Angeles County dfrank@debrafranklaw.com President Joseph J. Bell, j.d., cfls President-Elect Leslie Ellen Shear, j.d., cfls, cals Newsletter Editor Debra S. Frank, j.d., cfls Newsletter Editor-Elect Dawn Gray, j.d., cfls Printing Execuprint/Chatsworth, California Graphics and Typography Graeme Magruder/Kalligraphics The acfls Newsletter is a publication of the Association of Certified Family Law Specialists. Send your submissions in WordPerfect or Word by to: Debra S. Frank, cfls, Newsletter Editor 2029 Century Park East, Suite 1400 Los Angeles, CA Phone: Fax: dfrank@debrafranklaw.com All contributions become the intellectual property of ACFLS, and may be distributed by ACFLS in any fashion it chooses, including print, internet and electronic media. Authors retain the right to independently republish or distribute their own contributions. This newsletter is designed to provide accurate and authori tative information in regard to the subject matter covered and is distributed with the under standing that ACFLS is not engaged in rendering legal, accounting or other professional advice. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. ACFLS Mission Statement It is the mission of acfls to promote and preserve the Family Law Specialty. To that end, the Association will seek to: 1. Advance the knowledge of Family Law Specialists; 2. Monitor legislation and proposals affecting the field of family law; 3. Promote and encourage ethical practice among members of the bar and their clients; and 4. Promote the specialty to the public and the family law bar. ACFLS Executive Director For circulation, membership, administrative and event registration requests, contact: Lynn Pfeifer, ACFLS Executive Director 15 Corrillo Drive, San Rafael, CA (415) Fax: (415) acfls@comcast.net 2009 Association of Certified Family Law Specialists This issue features several articles looking at models of family law ADR, as well as articles from accountants, therapists and other attorneys on financial issues in family law practice. You will also find Joe Bell s President s Message, information about upcoming ACFLS events, hot tips on family law practice, letters to the editor, your ballot for the upcoming Board election, pictures from the State Bar Annual Meeting in San Diego and an order form for ACFLS CLE on DVD. First, the Hon. James H. Libbey (Ret.), who served as Commissioner/Judge Pro Tempore of the Contra Costa County Superior Court before joining JAMS, discusses some of the benefits of utilizing a private neutral. Board member Stephen Temko interviewed Commissioner Alan Clements (Ret.), the 2009 recipient of the State Bar Family Law Section California Judicial Officer of the Year Award. Steve s interview reports the perspective of a Southern California jurist on the state of family law courts and practice. Former Board member Len Weiler and Karen Heller Berdy, j.d., take a look at Collaborative Divorce Practice in Cali for nia as it has developed over the past decade. Forensic Psychologist Angus Strachan, Ph.D., describes an ADR model used in high-conflict custody cases Parenting Plan Coordinators (Child Custody Special Masters). President-Elect Leslie Ellen Shear s Custody Matters column ties in with a series of tips for lawyers and mental health professionals acting as PPCs. Leslie s column also discusses the new legislation using an increase in filing fees to fund court-appointed counsel including lawyers for parents and children in child custody cases, and the Elkins Family Law Task Force s draft recommendations. The Elkins Family Law Task Force previewed those draft recommendations at the State Bar Annual Meeting and released them for comment on Oct. 2. The draft recommendations and an online comment form are available at Board member Diane Wasznicky and the members of her ACFLS Court Reform Subcommittee have planned a retreat over the weekend of Nov. 13 to review the 100 Task Force recommendations and draft formal comments on behalf of ACFLS. As chair of the Sub committee, Diane (diane@divorce withrespect. com) welcomes your indi vidual comments as the committee prepares for the retreat. Watch for the next issue for a report on the ACFLS comments. An audit of the Marin County Family Law Courts is underway. Diane Wasznicky s Legislative Report consists of the letter sent to the State Auditor on behalf of ACFLS identifying factors to be considered and concerns about the feasibility of audit methods. An article in our Summer issue, New Supreme Court Decision: Plan Administrator Appropriately Paid Pen sion Benefits to Ex-wife, the Designated Beneficiary, Despite Language in Divorce Decree, Continued on page 23 (Frank) FALL 2009, NO 3 PAGE 2 ACFLS NEWSLETTER

3 President s Message Joseph J. Bell, j.d., cfls ACFLS President Nevada County attorney@bellslaw.com Joseph J. Bell has had a solo practice in the Sierra Foothills for more than 25 years, 15 years as a Certified Family Law Specialist. His practice includes juvenile dependency and civil litigation. He has worked to improve access to justice from his earliest work in San Francisco for legal aid and Public Advocates. Mr. Bell served as Vice President of the Board of Governors of the State Bar of California as well as a volunteer on many State Bar and Judicial Council committees. Your Association was actively present at the State Bar Meeting in San Diego, September We continue to lead the profession in our efforts to provide high-quality programs and advanced materials for Family Law continuing education, to monitor and contribute to the activities of the legislative, executive and judicial branches that affect Family Law, and to provide support and services to our members. In San Diego, ACFLS presented another super program by Dawn Gray and Stephen Wagner that was well attended and very well received: Equitable Apportionment of Community and Separate Property in a Chaotic Market. The program focus was on valuing and dividing the respective interests in a law practice. The materials were derived from the Lexis Nexis publication that Gray and Wagner author. In addition to the presenters insights about handling these issues in our present uncertain economy, the program provided a great review and synthesis of the case law on this subject. ACFLS Board members, including myself, attended various sessions and events including the Elkins Task Force presentation of recommendations by Bonnie Hough of the Administrative Office of the Courts [AOC] and our own Peter Walzer, the Family Law Section meetings and events, the Conference of Delegates debates and discussions, and the Swearing-in Ceremony of the California Judges Association and the State Bar officers. That Ceremony featured the annual address of Chief Justice Ronald M. George to the Bar. It may be of interest to note, for those who did not attend, that the State Bar events were subject to picketing, leafleting, and significant riot police presence, in response to a small group of demonstrators in opposition to the meeting being held at the Hyatt. A boycott effort had been mounted against the State Bar by opponents of Proposition 8 (the successful anti-same-sex marriage ballot measure) due to the substantial financial support that measure had received from a Hyatt executive. The boycott campaign became an effort to persuade State Bar meeting attendees that the Bar, the Judiciary and all those present were supporters of homophobia. (The ACFLS was asked to cancel or move the Gray-Wagner seminar, neither of which was possible. ACFLS Board members stayed elsewhere and our reception was at the Marriott.) Of course, ACFLS members know that our organization had filed an amicus brief supporting the Supreme Court case which sought to invalidate Proposition 8. However, it is the message of Chief Justice George to which I want to draw your attention. Let me first suggest that the interview with the Chief Justice in the Family Law News (Issue 2, 2009 published by the State Bar Family Law Section) is worth seeking out, if you have not read it. His words make it abundantly clear that our Chief Justice has a particular commitment to access to justice for all and especially for litigants in Family Law matters. His history of appointment (by Governors Reagan, Brown, Deukmejian and finally Wilson to the Supreme Court in 1991) suggests a jurist respectful of the separation of powers while being equally committed to the interests of justice. This is the author of Marriage of Bonds and Elkins as well as The Marriage Cases. This is the Justice who took time off to return to the Los Angeles trial court to preside over an Adoption Saturday calendar. He is the Chief Justice who was tasked by a 1998 ballot measure to create an efficient, unified Judicial Branch. He has been a steadfast supporter of the Equal Access Fund and recently he advocated creating pilot projects in California to implement the civil Gideon right to counsel. Last but not least, our Chief Justice makes a point of stating his abiding respect and admiration for Family Law jurists and lawyers and the work we do. In his annual address to the Bar and Judges Association, Justice George explained that the Judicial Branch as a whole is suffering from the budget constraints that the economic crisis has created for California. He stated that the one-day-a-month statewide court closures were suggested by lawyers seeking con- Continued on page 33 (Bell) ACFLS NEWSLETTER PAGE 3 FALL 2009, NO 3

4 LETTERS TO THE EDITOR Ed. Note: Below are two letters I received in response to the article New Supreme Court Decision: Plan Administrator Appropriately Paid Pension Benefits to Ex-wife, the Designated Beneficiary, Despite Language in Divorce Decree, by Katherine S. Somervell, Susan Olson, and Abby Wool Landon, published in the Summer 2009 ACFLS Newsletter. Ann Fallon is a partner at Whiting, Fallon, Ross & Abel, LLP in Walnut Creek, California, a CFLS and a Fellow of the AAML. Since 1988, she has focused her practice on family law retirement and other employee benefit issues and is a frequent writer and speaker on those subjects. R. Ann Fallon, j.d., cfls Contra Costa County af@disso.com Dear Editor: Re the article by Katherine S. Somervell, Susan Olson, and Abby Wool Landon at page 8 in the Summer Newsletter interpreting the meaning of the United States Supreme Court opinion in Kennedy v DuPont (2009) 129 S.Ct. 865, I respectfully disagree with two things the authors put forth for family law attorneys: Facts: H named W as his beneficiary under the DuPont Savings Incentive Plan (SIP). Judgment at disso waived any interest wife may have in the SIP. After disso, H never removed Ex as his SIP beneficiary [using forms required by the Plan]. H died; ex-w received the proceeds of the SIP as beneficiary. 1. The authors said that wife s waiver of interest in husband s SIP benefit in the family law Judgment failed to waive her interest as his beneficiary under that SIP Plan because her judgment waiver was not a QDRO. This was the 5th Circuit s position which was overruled by the USSC. The Supreme Court at great length set forth why a family law waiver does not need to be a QDRO. The Supremes made mincemeat out of the 5th circuit s reasoning. 2. Then the authors advise family law attorneys: A QDRO must be prepared that follows the plan s requirements for changing beneficiary designations. [There is no way to do that where the Plan requires its own forms to be signed to drop the beneficiary.] The Supreme Court then went on to state that the reason the family law waiver failed in this case was due to the supremacy of the Plan Doctrine Rule. The Plan must have its requirements met or the desired effect will fall short. The plan provided an easy way for William to change the designation, but for whatever reason, he did not. The plan provided a way to disclaim an interest in the SIP account, but Liv did not purport to follow it. Conclusion: You cannot create a QDRO that follows plan requirements for changing beneficiary designations when those requirements are that the employee must use plan forms to change his/her beneficiary. Of course, if, at the Participant s death, the former spouse finds out that he/she is still the beneficiary under the Plan notwithstanding a Judgment Waiver, and that former spouse declines to sign the Plan s required form for Disclaimer of Benefits then the Judgment Waiver is ineffective not because the Judgment waiver wasn t a QDRO but because the required disclaimer form was not signed. Plan documents Rule. One must remind a client to change his/her own beneficiary designations. If client does not follow that advice, that is not the attorney s fault. A QDRO cannot cure the client s failure to follow the Plan document rule. And you can t force a former spouse who gets a windfall to disclaim the benefit based on the employee s failure to execute a new beneficiary designation. But consider this the judgment waiver might be the basis of a constructive trust suit (the Kennedy Court took no position on constructive trust per se but took the time to mention that possibility with reference to a few cases where the courts had reached that conclusion). Advice: Create a carefully worded waiver naming the Plan details and treating the waiver as if it were a QDRO but don t mislead the client into thinking that the beneficiary designation doesn t have to be changed on plan forms. It does!!! Then why be so careful with the waiver language in the Judgment? So the deceased s estate may later sue the beneficiary for failing to disclaim the benefits as the judgment waiver intended. Here is a nice paragraph: Alternate Payee agrees to acknowledge, and deliver any instruments reasonably required to give full force and effect to the waiver of her rights and interest stated herein; therefore, she will execute any disclaimer necessary within the period required under the applicable rules of the Plan and the federal tax code to effect a waiver of any right she may have arising from the fact that at the time of Participant s death, she is still considered a designated beneficiary to Participant s remaining interest in this Plan based on a designation made by Participant prior to or during the marriage. The court in which this action is pending shall retain jurisdiction to implement and enforce any appropriate remedy, including constructive trust and garnishment, against a party for breach of the provisions of this Agreement by which it is intended that all benefits payable to or on behalf of a party as set forth above shall be that party s separate property. FALL 2009, NO 3 PAGE 4 ACFLS NEWSLETTER

5 James M. Crawford, ERISA Counsel and frequent contributor to the ACFLS Newsletter including the QDRO Reader series. For more biographical and contact information, see his article in this edition entitled, The QDRO Reader, Chapter 6. SAVE THE DATE James M. Crawford, Jr., j.d. The Woodlands, TX erisasite.com Dear Editor: An article on Kennedy v. Dupont (2009) 129 S Ct. 865 at page 8 in your Summer 2009 issue included statements regarding the use of a QDRO to waive benefits that are of concern. In particular, the authors concluded that the reason wife s waiver was insufficient was because it did not rise to the level of a QDRO, and then counseled that a QDRO must be prepared that follows plan requirements for changing b eneficiary designations. This advice is troubling, as there is in reality no relationship whatsoever between benefit waivers and QDROs. As the Supreme court wrote, In fact, a beneficiary seeking only to relinquish her right to benefits cannot do this by a QDRO, for a QDRO by definition requires that it be the creat[ion] or recogni[tion of] the existence of an alternate payee s right to, or assign[ment] to an alternate payee [of] the right to, receive all or a portion of the benefits payable with respect to a participant under a plan. 29 U.S.C. 1056(d)(3)(B)(i)(I). There is no QDRO for a simple waiver; [***23] there must be some succeeding designation of an alternate payee. The lessons of Kennedy are simple: ERISA does not prohibit a beneficiary from waiving benefits, and if a plan contains a waiver provision, a waiver may be accomplished by following it. And while the court left open the issue of what is required to compel the plan to recognize a waiver if the plan is silent on the question, as well as the issue of whether a waiver may provide the basis for imposing a constructive trust after the funds are disbursed from the plan, this clarification, as far as it goes, is welcome. However, the key point to remember is that a waiver or disclaimer will only allow the benefits to be paid to the plan s contingent or default beneficiary. Accordingly, if payment to an alternate payee is to be assured, a QDRO must be used. A further clarification to the article: An ERISA plan includes most qualified retirement plans (so-called owner-only plans and governmental plans being notable exceptions), and most other private employee benefit plans even if not qualified (e.g., unfunded deferred compensation plans, and employerprovided life insurance). However ERISA s anti-alienation provision, a key feature in the Kennedy case, applies only to pension plans. Association of Certified December Family Law Specialists 4, 2010 * Be there when ACFLS turns 30! Our 30th Anniversary Party will be held in San Francisco and will be co-chaired by Ronald Granberg, cfls, and Hon. Donald King (ret.). * See page 21 for information about this year s party. ACFLS NEWSLETTER PAGE 5 FALL 2009, NO. 3

6 Collaborative Divorce Practice in California Len Weiler, j.d., cfls Contra Costa County Karen Heller Berdy, j.d., m.b.a. Contra Costa County weilerlaw.com dissolawyer.com Len Weiler is a partner at Weiler and Borst LLP in San Ramon, CA, with a law practice emphasizing consensual dispute resolution, including collaborative law and mediation. Mr. Weiler served as president of ACFLS in 1998 and is a past president of the Family Law Section of the Contra Costa County Bar Associ ation. He currently serves as a member of the Board of Directors of Collaborative Practice California (CP Cal), and in a leadership role in East Bay and regional collaborative organizations. Karen Heller Berdy practices family law as a sole practitioner in Walnut Creek and Pleasanton, California. Ms. Berdy s practice focuses on representing clients in mediation, collaborative law and other settlementoriented dispute resolution proc esses. Ms. Berdy is a founding member of the Board of Directors of Collaborative Practice California (CP Cal), is on the Steering Committee of Collaborative Practice East Bay and is chairperson of Collaborative Lawyers of Alameda/Contra Costa. Consensual dispute resolution in general and Collaborative Divorce in particular, has been expanding and flourishing in California over the past decade. The term consensual dispute resolution refers to that bundle of alternatives to the litigation model of divorce, which includes mediation, Collaborative Practice, and, to some extent, unbundled legal services. As the name implies, consensual dispute resolution in the divorce context provides a means for parties to resolve divorce-related issues via negotiated agreement as opposed to seeking determinations by a third party decisionmaker. Of course, some parties and some situations are unsuitable for consensual dispute resolution processes, such as cases where there is active domestic violence, serious untreated mental illness or personality disorders, or an intention to hurt the other party. But absent these factors, where there is a strong commitment to out-of-court resolution of divorce issues, they offer viable alternatives to traditional dispute resolution. While the collaborative model of conflict resolution has taken many different forms, the core principle distinguishing Collaborative Practice is the precept that each party is actively represented by counsel throughout the process, and that, by binding written agreement, the collaborative lawyers are precluded from participating in contested proceedings in court. Growing Popularity of the Collaborative Model Starting in Minneapolis, Minnesota 20 years ago, collaborative law soon jumped to the San Francisco Bay area, and from there began to spread and grow throughout the state, throughout the country, and internationally. The Inter national Academy of Collaborative Professionals (IACP), founded in 1999, estimates that more than 10,000 lawyers have been trained in collaborative law in the United States alone, and more than 1250 lawyers have completed such training in the United Kingdom, where collaborative practice was launched just four years ago. There are collaborative groups and practitioners in Canada, Germany, Ireland, the Czech Republic, Austria, Hong Kong, Australia, New Zealand, Kenya and elsewhere. IACP claims more than 3200 members in the US alone, of which more than 2200 are attorneys. In California, most collaborative practitioners belong to practice groups, where they meet, learn from each other, develop protocols and work together to provide public education about the Collaborative Process. There are now local and regional practice groups in all major cities and most large communities in California. Five years ago, a number of California practice groups got together to form a statewide organization, known as Collaborative Practice California (CP Cal). CP Cal now numbers twenty-one practice groups statewide, from San Diego to Sacramento. There are well over 600 collaborative practitioners in this state associated with those practice groups, including more than 350 collaboratively trained attorneys. In 2006, the California Legislature enacted Family Code section 2013 recognizing and defining the Collaborative Law Process as a process in which the parties and any professionals FALL 2009, NO. 3 PAGE 6 ACFLS NEWSLETTER

7 engaged by the parties to assist them agree in writing to use their best efforts and to make a good faith attempt to resolve disputes related to the family law matters... on an agreed basis without resorting to adversary judicial intervention. At least three other states (North Carolina, Texas and Utah) have statutes or statewide rules on collaborative divorce. Many local jurisdictions have local court rules governing the practice, including, in California, San Diego County, Sonoma County, Contra Costa County, San Mateo and others. The National Conference of Commissioners on Uniform State Laws has drafted and approved a model Uniform Collaborative Law Act (UCLA) for submission to the states. What Is Collaborative Practice? Collaborative Law, Collaborative Divorce, and Collaborative Practice are terms often used interchangeably to describe the collaborative process. Collaborative Law generally refers to the legal component of the process or a collaborative model which is not oriented towards the use of an interdisciplinary team. Collaborative Divorce generally refers to a collaborative process which includes not only collaborative attorneys, but also other team members from other disciplines known as the interdisciplinary team. Collaborative Practice is the overarching term to describe the process generally, and also includes application of the Collaborative Process to other disciplines such as probate, business, employment law, landlord/ tenant and intellectual property law. Originally conceived in 1990 by a Minnesota family lawyer, Stu Webb, the genesis of the Collaborative Process was a realization that traditional adversarial litigation often exacerbated family disputes rather than healing or resolving them and that not infrequently the divorce process itself, and the zealous advocacy required of counsel, actually resulted in damage to the family. The simple, novel idea at the heart of the collaborative model developed by Mr. Webb was that parties and counsel could sign a binding agreement providing that the lawyers for each party would devote their efforts exclusively toward good faith settlement, and that they would be disqualified from representing their clients in contested proceedings in court. If family law attorneys know from the outset that negotiation is the only path to a successful outcome, professional and economic motivations will incite more creative negotiation efforts and a more collaborative working relationship between counsel. In order to arrive at a settlement acceptable to both parties, the lawyers need to work with, rather than against, one another. The disqualification provision aligns the interests of the parties and their counsel in a synergistic way. Each of the parties has not only an aspiration to avoid conflict, but also a practical interest in finding workable solutions to disagreements, so as to avoid the need to find a new attorney and regroup for a run at the courthouse. While litigation in court always remains an option for the clients, the hurdle placed in their path by the disqualification provision is a powerful disincentive, encouraging a greater willingness to consider alternatives and to more diligently pursue out-of-court settlement. Over time, Collaborative Practice has come to encompass more than just the pledge not to litigate. The collab orative contract requires full, voluntary disclosure of all material information, respectful behavior and communications, goodfaith negotiations, and solutions focused on the best interests of the children and the acknowledged goals and interests of each party. The non-adversarial approach, the emphasis on personal respect, open disclosure and cooperative problemsolving, along with the guidance and modeled behavior of the lawyers and other professionals, all combine to provide a safe place for parties to discuss their goals, their needs and their proposals for resolution. Together, these factors create an atmosphere that decreases the tensions and hostilities which often get in the way of rational discourse and practical problem solving in adversarial divorces. Collaborative Training Notwithstanding their sincere desire to avoid courthouse battles and to resolve their marriage dissolution reasonably and respectfully, most divorcing couples need a lot of help in order to participate in negotiations effectively and constructively, and to avoid devolution into rancorous or angry arguments about the serious issues they face. Family lawyers may also react instinctively and argumentatively to opposing viewpoints, rather than effectively and constructively. When court is not an option, even experienced family lawyers realize they need to learn new skills in order to better counsel and guide their clients, and to effectively work with their collaborative counterpart (formerly known as opposing counsel ). Litigation experience and education in the law, in and of themselves, do not provide the perspective or the tools to practice collaborative law. Clients need counseling not only about legal and practical options applicable to their situation, but also regarding non-confrontational negotiation, respectful com munication, and so forth. Some collaborative attorneys already had some background and training in mediation and interest-based nego ti ation, and these skills proved very adaptable to the collaborative model. Most Collaborative Practice groups now have a significant training requirement for their members. The IACP recommends a minimum of a 12-hour basic collaborative training, at least one 30-hour training in client-centered, facilitative conflict resolution such as mediation training, and in addition, a further 15 hours of training in interest-based negotiation, communication skills, additional collaborative training, advanced mediation training, and/or basic coach training. Interdisciplinary Team The trend in California has been toward an interdisciplinary team approach to the Collaborative Process in divorce cases. The team approach recognizes that divorce encompasses more than merely legal and economic concerns, and that individual psychological, emotional and philosophical issues invariably play a significant role in decision-making and in a party s ability to effectively participate in negotiations. Most family lawyers recognize that quite a lot of divorce litigation, and a high percentage of the resulting legal fees in those cases, result from unresolved or even unrecognized emotional issues of one or both parties or between the parties, rather than from complex legal or factual disputes. The purpose of engaging an Continued on page 22 (Weiler & Berdy) ACFLS NEWSLETTER PAGE 7 FALL 2009, NO. 3

8 PARENTING PLAN COORDINATION: A Hybrid Role for Alternative Dispute Resolution in Family Law Angus Strachan, ph.d. Los Angeles County astrachan@ lundstrachan.com Angus Strachan, Ph.D., is a clinical psychologist with Lund & Strachan, Inc., in Santa Monica, California, which provides parenting plan coordination, mediation, custody evaluation and family therapy, as well as conflict resolution for business teams and partnerships. In 2008, the Family Law Executive Committee of the Los Angeles County Bar Association produced a new stipulation for the appointment of a Parenting Plan Coordinator (PPC). This carefully-crafted document was the result of a year of discussion among members of a committee appointed by the bar and the court. It was composed of family law attorneys, judicial officers and mental health professionals, with the intention of revising a document that had been previously developed in In developing the new document, we pored over other States and Counties documents as well as the AFCC 2005 guidelines. Mary Lund and I, as the mental health professionals who had the experience of working as PPCs, defined issues for debate and provided information about the challenges and potential pitfalls of the process, while the judicial officers and the attorneys defined how they needed to interact with the PPCs and hashed through the legal issues. In the end, I was proud of our finished product, a document that noted Parenting Coordinator trainer Matt Sullivan described as the best conceived stipulation of all those he has reviewed across the country. What Clients Are Suitable for the PPC Process? There are a variety of reasons clients choose to use this process. A frequent reason is that clients, emotionally and physically exhausted by litigation, are searching for an alternative method of resolving the myriad issues involved in co-parenting. One or both parties may be seen by their partner or third parties as difficult, obsessive, hostile, suspicious, always changing their mind, always immovable, borderline, or high-conflict. They find themselves unable to negotiate and want some kind of third-party decision-maker for ongoing disputes. Another reason that clients choose this process is that they appear to be simply seeking an alternative method of resolving disputes. At times, clients have approached me to be a PPC, recognizing that they have problems but that they are unwilling to resolve them in a court of law due to a dislike of the litigation process. Instead, their preference is the help of a mental health professional with experience in family law disputes. Some clients value their privacy (e.g. celebrity clients), or distrust the legal system (e.g. gay or lesbian couples). Some have tried to negotiate, either by themselves or with a mediator, but keep hitting a brick wall, eventually recognizing their need for a decider on issues ranging from the small How should we manage back-to-school night? or What do we do with the forgotten schoolbook? to the large How shall we decide how to treat our child s allergies? or What school should she go to? What s in the Stipulation? The stipulation is divided into various sections describing: The role of the PPC The parents understanding of the terms of their agreement The order of appointment by the court The limits of the PPC s authority The definition of the three levels of decisions The definition of the specific scope of decisions The process of decision-making Issues of ex parte communication with the court Issues of privilege, privacy and confidentiality Compensation of the PPC Deposition and court appearance procedures Grievances, disqualification and termination of appointment What Is the Legal Basis of the Stipulation? The committee debated long and hard about whether or not to include code references. In the end we decided against it, concluding that the process is by stipulation and hence does not need to reference codes. The hybrid process has ele ments of various other processes, but not all the elements required by code for that process: thus, Parent Plan Coordination is not mediation under Fam. Code 3160 FALL 2009, NO. 3 PAGE 8 ACFLS NEWSLETTER

9 because it is not confidential and does have decision-making power; it is not refereeing under Code of Civil Procedure 638 and 639 because it includes decisionmaking about unknown future disputes; it is not a custody evaluation under Evidence Code section 730 because there is decision-making and not just recommendations; and it is not arbitration under Code of Civil Procedure section 1280 et seq., although close, because the rules of evidence procedures are less formal. Why Call the Role Parenting Plan Coordinator? This term, we believe, best describes the role. Previously, the more ambiguous term Special Master was used, one we thought was not particularly descriptive and even somewhat misleading, as Special Masters are usually attorneys, who are officers of the court, and PPCs are more often mental health professionals. Nationally, the most widely used term today is Parenting Coordinator, but we instead settled on the term Parenting Plan Coordinator to emphasize that the role is not so much about parenting in general as it is about making decisions about the Parenting Plan, stressing decision-making at the macro rather than micro level. What Are the Three Levels of Decision-making? Each level has increasing scope and decreasing immediacy of authority. Level 1 decisions are usually short-term, practical, and time-sensitive. Examples include changes in drop-off location, scheduling for Holidays and vacations and selecting extra-curricular activities. These decisions take place immediately and are only challengeable by bringing an OSC within 30 days and proving by clear and convincing evidence that the decision was not in the best interest of the child. Level 2 decisions are less immediate but have longer-term ramifications and a broader scope. Examples here include choice of and interaction with doctors, special needs providers, choice of school and travel issues. These decisions take place immediately and are only challengeable by bringing an OSC within 30 days and proving by a preponderance of the evidence that the decision was not in the best interest of the child. Level 3 decisions are the broadest in scope and involve more fundamental changes in the role of each parent. Examples of Level 3 decisions are: the assignment of legal custody, large changes in the base parenting schedule, the implementation of monitored supervision, or counseling of the parties or the children. These decisions are not orders but, rather, recommendations to the court. They are only enforceable by either stipulation of the parties or a court decision triggered by one party bringing an OSC to the court. It should be noted that these sorts of recommendations do not hold the same force as custody evaluation recommendations : custody evaluation recommendations are made as part of a report that is usually entered into evidence and which is considered expert opinion; PPC recommendations are neither and, unless the parties stipulate to adopt the PPC recommendations, are subject to a de novo hearing. Some counties in California differentiate between a Parent ing Coordinator, who handles issues at level 1 and 2, and a Special Master, who handles only level 3 issues. Our approach combines the roles by having some decisions that are orders and some that are recommendations. Why Have a Notice of Decision Form? A simple but practical feature of our stipulation was the crea tion of the form PPC-2, The Notice of Decision (see end of article). This form is the cover sheet preceding the PPC s description of the issue, decision, rationale and date that a decision was made. The purposes of the form are two-fold: to improve communication between the PPC and the court; and to make it easy for the clerk and the court to provide conformed copies of decisions. We use lavender-colored paper to make the form stand out. How Can Attorneys Participate Most Helpfully? Attorneys are vital in helping to set up the case. They can help guide their clients to understand the implications of what they are agreeing to and assist them in negotiating the scope of the appointment. Remember, the PPC stipulation is a voluntary agreement the standard stipulation is only a guideline. Having said that, we ask that any changes be clearly marked in handwriting or put in an appendix so that those involved especially judicial officers can easily see what modifications have been made from the standard template. In another role, counsel can assist their clients in presenting issues to the PPC for consideration. A problem with this more informal process of dispute resolution is that clients are often very unclear about what issue they want decided and what they propose as solutions. Attorneys can help their clients present reasonable solutions and draft orders. This is especially useful if the PPC is a mental health professional, because they have little training in drafting orders. Finally, attorneys can perform a valuable service by keeping PPCs in line when they stray from their scope or do not fairly follow the process. They can also nudge the PPC to make timely decisions and help their clients be realistic about decision-making. In conclusion, the LA County Bar Association Family Law Section committee has endeavored to provide a newly refined process to help parents more quickly come to decisions with less angst and fewer uses of professional resources, all to the ultimate benefit of the children. In these harsh financial times, my hope is that the process will also take some pressure off our alreadystretched courts. In closing, I would like to thank the other members of the Los Angeles County Bar Association Family Law Committee which included Judge Robert A. Schnider (Ret.), Judge Thomas Trent Lewis, Commissioner Richard Curtis (Ret.), and Commissioner Alan Friedenthal, psychologists Mary Lund, Ph.D., and myself, and attorneys Jeffrey Jacobson, Heidi Tuffias, Leslie Shear and Lynette Berg Robe. The drafting committee was composed of myself, Commissioner Curtis and attorney Leslie Shear. The stipulation is available at Stipulation_08.pdf. The Notice of Decision is available at lundstrachan.com/forms/ PPC2_notice_of_decision_08.pdf. ACFLS NEWSLETTER PAGE 9 FALL 2009, NO. 3

10 ACFLS Responds to State Auditor s Audit of Sacramento and Marin County Family Law Courts Report of Legislative Coordinator Diane Wasznicky, j.d., cfls Sacramento County bartholomew & wasznicky llp diane@ divorcewithrespect.com Diane Wasznicky has been a family law practitioner for 28 years. She served as Legislative Chair for the State Bar Family Law Section s Executive Committee for two years and is currently an advisor for FlexCom. She is also President-Elect of AFCC-California. Diane has also served on the Judicial Council s Family Law Advisory Committee. During this past Legislative session, Assemblywoman Fiona Ma, later joined by Senator Mark Leno, introduced legislation to have the State Auditor s Office conduct an audit of the Sacramento and Marin County Family Law Courts. This step was taken in response to significant information (in anecdotal form) and complaints about these courts voiced primarily by supporters of two custody bills (AB 375 and AB 612) which ACFLS opposed. As noted in our letter below, the general criticism by these litigants is that the whole Family Law system is corrupt; the professionals are not trained, qualified or competent; they are only appointed because the appointing judge likes them; or they are only in it for the money (i.e. working it like a mill ). Obviously, we are all very aware of the limitations and inherent problems with the family law system in general (hence the need for the Elkins Task Force). There are real problems. However, identifying those specific problems, especially in a particular court, and assessing the scope of the problem, etc., is not so easily done. The ACFLS Board voted to have a letter sent to the State Auditor that would at least indicate the difficulties we perceive arising with the audit as originally requested, offer our support for an impartial analysis and offer our assistance if needed. That letter is set forth below. September 22, 2009 California State Auditor Attn: Debbie Meador, Chief, Legislative Affairs 555 Capitol Mall, Suite 300 Sacramento, California Dear Ms. Meador: I am writing to you on behalf of the Association of Certified Family Law Specialists (ACFLS) as a member of the ACFLS Board. ACFLS is a statewide organization of approximately 590 attorneys who are certified by the California State Bar Association to practice as specialists in the family law area of law. It has come to our attention that the State Auditor s Office is undertaking an audit of the Sacramento and Marin County Family Law Courts. It is our understanding that this audit is seeking to look into allegations by some groups that these Courts a) frequently award custody to abusive parents without basis; b) appoint professionals (e.g., mediators, evaluators, minor s counsel) without verification/considera tion of their expertise and qualifications, but rather based on crony ism ; and c) ignore claims of domestic violence by mothers and children so abusive fathers can get custody and continue abusing their children. We are NOT opposing such an audit. Both courts have been the subject of such extreme general allegations for years and factual information can only help. Our overriding concern is HOW such an audit is done. Our organization has no expertise in the specifics of conducting such an audit; however we do have expertise in the area of family law and custody. Our members regularly represent mothers and fathers and frequently children (when appointed by the court as minor s counsel). The priority for our members is NOT a gender-based perspective but what is best for the children caught between battling parents. We are hopeful we can raise some issues that might help ensure the completeness of the proposed audit, e.g., some of the problems or obstacles to actually resolving the troubling allegations: The majority of the allegations or claims are apparently generated by parties who did not win their case. To determine if claims of foul play are valid, it would seem one must examine FALL 2009, NO. 3 PAGE 10 ACFLS NEWSLETTER

11 both sides of the case and most importantly everything a court considered in reading its conclusion. The difficulties with this in the area of custody are: 1. Often pleadings filed by one or both parties do not include all the facts/ information later testified to or given to a mediator, evaluator or minor s counsel; 2. Appointments of such professionals are often done by stipulation and without an actual hearing or automatically when a pleading is filed; 3. There is seldom a record (e.g., reliable transcript) of what is raised or argued at a hearing in family law court (in some counties there is not even a Minute Order reflecting what is decided/ordered); 4. Many cases do not get to trial where evidence can be presented and challenged, because one party chooses not to litigate; 5. Even if trial does occur there is often no court reporter or transcript to shed light on what actually occurred or was said by anyone; 6. The reports of mediators and evaluators are confidential and put in a sealed portion of the file that only bench officers may access; 7. Such mediators and evaluators cannot discuss the details of the mediation/evaluation because of that confidentiality (would require releases by both parties at the very least); 8. Minor s Counsel Statements of Issues are usually in the public section of the file but minor s counsel have an attorney-client relationship with the minors they represent that precludes, based on privileged confidentiality, discussion of details outside the courtroom; 9. Finding and contacting both or all parties would be necessary to get all the facts and evidence needed to assess the reasonableness of a court s decision. It is safe to say we have no idea how your office intends to approach what appears, to us, to be a Herculean task. We are concerned that if the approach or method is not balanced and does not consider (or replicate) all the facts actually considered by the courts in each case, no true assessment as to the reasonableness and integrity of the procedures, process and the overall system in Sacramento and Marin counties is possible. As certified family law specialists we represent the parties, including minors, who need these court systems to work fairly and effectively. For that reason, we are committed to doing all we can to encourage and facilitate improvement, excellence and most importantly, impartiality. If you feel we can provide any assistance in the process of the audit or even just more information as to the obstacles, reali ties and frailties of these systems, please feel free to contact us. It is in everyone s best interest that your endeavor be considered as balanced and, hopefully, successful so the needs of these families are met. Thank you for taking the time to consider our thoughts and concerns. Sincerely, DIANE WASZNICKY Legislative Coordinator for ACFLS CC: Senator Leno Assembly Member Ma ACFLS Board of Directors ACFLS 2009 OFFICERS BALLOT Pursuant to Section 7.06 of the Bylaws of the Association of Certified Family Law Specialists, the Nominating Committee has met and selected a slate of officers as set forth in the ballot below. Pursuant to Section 7.05 of the Bylaws, there is no provision for write-in candidates. Directors may only be nominated by the Nominating Committee or by application to be on the ballot made in writing and signed by ten (10) members directed to the Corporate Secretary and received at least 10 days prior to November 1, Please return your ballot to ACFLS Administrator, Lynn Pfeifer, at 15 Corrillo Drive, San Rafael, CA Ballots must be received by Tuesday, December 1, 2009, to be counted. Only current dues-paying members may vote. Place your ballot in an inner envelope, if you desire, but be sure your name is on the outside of the mailing envelope so that your voting status may be confirmed. (NOTE: Checked spaces indicate previously-elected officers and are shown for your information only.) PRESIDENT PRESIDENT-ELECT [ X ] Leslie Ellen Shear, Los Angeles Cty. [ ] Diane Wasznicky, Sacramento Cty. SECRETARY SECRETARY-ELECT [ X ] Shane R. Ford, San Mateo Cty. [ ] Patricia Rigdon, Los Angeles Cty. TREASURER TREASURER-ELECT [ X ] Jennifer Crum, San Mateo Cty. [ ] Lulu Wong, Napa Cty. NEWSLETTER EDITOR NEWSLETTER EDITOR-ELECT [ X ] Dawn Gray, Nevada Cty. [ ] Debra S. Frank, Los Angeles Cty. DIRECTOR NORTH DIRECTOR NORTH-ELECT [ X ] Michael B. Samuels, Marin Cty. [ ] Michelene Insalaco, San Francisco Cty. DIRECTOR SOUTH DIRECTOR SOUTH-ELECT [ X ] Karen Freitas, Los Angeles Cty. [ ] Robert J. Friedman, Los Angeles Cty. IMMEDIATE PAST-PRESIDENT LEGISLATIVE COORDINATOR [ X ] Joseph J. Bell, Nevada Cty. [ ] Lynette Berg Robe, Sacramento Cty. The following ex officio non-voting appointments for the year 2009 are expected to be approved by the board on Dec. 5, 2009: Director at Large, North... Vivian L. Holley, San Francisco Cty. Director at Large, Far North... Linda Seinturier, Shasta Cty. Director at Large, Sacramento/NE... Camille Hemmer, Sacramento Cty. Director at Large, Central California... David J. Borges, San Luis Obispo Cty. Director at Large, South... Frieda Gordon, Los Angeles Cty. Director at Large, Orange Cty., San Diego... Stephen Temko, San Diego Cty. Director at Large... Sterling Myers, Los Angeles Cty. Technology Coordinator... Barbara Hammers, Los Angeles Cty. ACFLS NEWSLETTER PAGE 11 FALL 2009, NO 3

12 Deferring the Sale of the Family Residence Stanley L. Bartelmie, attorney-mediator, cfls Santa Clara County Stanley L. Bartelmie has practiced family law, trusts, trust administration and probate for more than 30 years in Santa Clara County. Stan is a member of the Mediation and Arbitration Panels with the Santa Clara County Superior Court. He received mediation training with the Northern California Mediation Center. For the past ten years his family law practice has been emphasizing mediation, private settlement conferences, and private judging. For more than twenty years, Stan has assisted the Family Court as a settlement officer. Stan has volunteered as a Small Claims Court temporary judge since Stan is a trained arbitrator, and participates on the panels for the resolution of attorney-client fee disputes for the Santa Clara County Bar Association and the State Bar of California. Attorneys, Mediators and Collaborators are considering delay in the division of the family residence as an important option for divorcing couples. Children are able to remain in the same home, neighborhood, schools and church, and are impacted by the divorce less severely than if they are uprooted from these familiar attachments. Drastic economic circumstances in the real estate and job markets have created an inherent interest in deferring the sale of the family residence independent of the obligation of support. Couples are looking at retaining ownership of their family residence, so that it can hopefully be sold for a profit in the future, and to stabilize the lives of their children. The parties are considering negotiating a reduction in the amount of the mortgage with the bank to reflect the fair market value of the residence, and to avoid a foreclosure proceeding. Or, one of the parties may need time to acquire the ability to purchase the other party s community interest in the home, and the parties agree to make an arrangement to accomplish this goal and to avoid the costs of a listed sale, to eliminate a capital gains tax, and to allow one party to continue to be a real estate owner when it may otherwise be problematic for that party to qualify to purchase a new residence. The immediate sale of the family residence may be deferred by the court, when requested by a party, so that the custodial parent and minor children could continue to live in the family residence as part of a child support order. The parents own the home as tenants in common until there is no need for child support and the home can be sold and the proceeds divided between them. Marriage of Boseman (1973) 31 Cal. App.3d 372; Marriage of Duke (1980) 101 Cal. App.3d 152, and Marriage of Braud (1996) 45 Cal. App.4th 797, 811, footnote 14 traces development of Fam. Code Section 3800 et seq. Family Code Section 3800 governs the deferred sale of a family home. For purposes of Section 3800 et seq., a deferred sale of home order means an order that temporarily delays the sale and awards the temporary exclusive use and possession of the family home to a custodial parent of a minor child or child for whom support is authorized..., whether or not the custodial parent has sole or joint custody, in order to minimize the adverse impact of dissolution of marriage or legal separation of the parties on the welfare of the child. Family Code Section 3800(b). Hogoboom and King, Cal. Prac. Guide: Family Law (The Rutter Group 2009) 6:543. A party must request a deferred sale of the family residence. (Fam. Code Section 3801(a)). The character of the family home which qualifies for application of a deferred sale of home order can be a community property asset, mixed asset, or even the separate property of the non-resident or out-spouse (party living out of the family home), who is the child support obligor. The statutory scheme does not expressly state deferred sale of home orders are made for a child support purpose. However, Section 3800 et seq. is placed in Division 9 of the FALL 2009, NO. 3 PAGE 12 ACFLS NEWSLETTER

13 Family Code dealing with support. The statewide uniform child support guideline (Fam. Code Section 4050 et seq.) itself brings deferred sale of home orders into the child support equation, i.e., the formula amount of support, may in the court s discretion, be adjusted downward to the extent the rental value attributable to the non-occupant spouse s (support obligor s) ownership interest exceeds the mortgage payments, homeowner s insurance and property taxes. Hogoboom and King, Cal. Prac. Guide: Family Law (The Rutter Group) 6:546. When a party requests a deferred sale of home order, the court must determine whether it is economically feasible to maintain the (1) house payments (mortgage, property taxes, and insurance) during the deferred sale period, and (2) the ability of the resident spouse (in-spouse) to maintain and preserve the condition of the home comparable to that at the time of trial. The Code requires an economic feasibility determination, the intent is (a) to avoid the likelihood of possible defaults in secured note payments (mortgages, equity lines and other liens), and a resulting foreclosure ; (b) to avoid inadequate insurance coverage ; (c) to prevent deterioration in the condition of the home; and (d) to prevent any other circumstances which would jeopardize both parents equity in the home. Family Code Section 3801(a), see Marriage of Braud, supra. After the threshold economic factors are satisfied, then the court retains broad discretion to grant or deny the order. A deferred sale is never mandatory. There are ten statutory factors, which the court is required to consider and weigh. Marriage of Stallworth (1987) 192 Cal. App.3d 742, , Marriage of Braud, supra, and Family Code Section 3800 et seq., Hogoboom and King, Cal. Prac. Guide: Family Law (2009) 6: Fam. Code Sections 3802(b)(1) 3802(b (10). First, the length of time the child has resided in the home. Second, the child s placement or grade in school, and how much longer the child would be likely to attend a neighborhood school. Third, the accessibility and convenience of the home to the child s school, other facilities used by the child and available to the child, including child-care. Fourth, whether the home has been adapted or modified to accommodate any physical disabilities of a child or a resident parent in a manner such that a change in residence may adversely affect the ability of the resident parent to meet the needs of the child. Fifth, the emotional detriment to the child associated with a change in residence. Sixth, the extent to which the location of the family residence permits the resident parent to continue his or her employment. Seventh, the financial ability of each parent to obtain suitable housing should the family residence be immediately sold and the proceeds divided. Eighth, determining the tax consequences to the parents, and the requirement for a reservation of jurisdiction for the maintenance of the home and tax consequences. Ninth, determining the economic detriment to the nonresident parent in the event of a deferred sale of home order. A deferred sale might interfere both with the out-spouse s ability to acquire suitable housing for frequent and continuing contact with the children (Fam. Code Section 3020) and with the ability to get on with living his or her life in a post divorce world. Marriage of Stallworth, supra, 192 Cal. App.3d at 748,749. Whether to award an off-set against the child support liability for out-spouse s loss of use of his or her separate property family residence. Marriage of Braud, 45 Cal. App.4th at 815. The court could compensate the out-spouse by making a condition for the deferred sale on the parties obtaining a loan with which the out-spouse could cash out all or part of his or her community interest with a view to overall economic feasibility for each party. Marriage of Braud, supra, footnote 18, dictum. Tenth, any other factors the court deems just and equitable. Marriage of Braud, supra. Footnote 15. For example, the out-spouse s separate property interest in the home may be a just and equitable factor to consider in deferring the owner s occupancy/sale of the home or in limiting the term for the deferred occupancy/sale. The order deferring the sale of the family home must specify its duration. Fam. Code Section This determination is akin to the weighing process on the issue of whether to grant a deferred sale of home order and, generally, not when the child reaches the age of 18 years! When the children are going to naturally be changing schools should be considered. Marriage of Stallworth, supra, 192 Cal. App.3d at 748, Marriage of Braud, supra, 45 Cal. App.4th at 816, affirmed an order deferring the sale of the home for 12 years, until the youngest child reached age 18. A deferred sale of home order may also be made for adult children owed a support obligation (... or child for whom support is authorized, Fam. Code Section 3800(b)). The court has discretion to modify or terminate a deferred sale of home order when circumstances change, unless the parties have otherwise agreed in writing. Fam. Code Section Should the resident party remarry, or there is a change in circumstances affecting the Fam. Code Sections 3801 or 3802 determinations upon which the order is based or affecting the economic status of the parties or the children on which the order is based, there is a rebuttable presumption affecting the burden of proof that further deferral of the sale of the family residence is no longer an equitable method of minimizing the impact of dissolution or legal separation on the children, then the court can require an immediate sale and division of the proceeds. Family Code Section Consequently, when the parties actually desire a fixed deferral period, they must document that intent in a written agreement, to avoid the court s discretion to vary the term. Not governed by Fam. Code Section 3800 et seq. would be a deferred sale of the family residence for property division purposes. A deferred sale of the parties community property home strictly for a property division purpose is not a deferred sale of home Continued on page 30 (Bartelmie) ACFLS NEWSLETTER PAGE 13 FALL 2009, NO. 3

14 Difficult Issues Encountered in Determining Income Available for Support from Business Interests the Need for Judicial Council Review of Guidelines and the Limitations of Certified Support Software Brian M. Boone, cfa, cva, cpa-abv, m.b.a. Sacramento County sba-valuations.com Brian M. Boone is a principal shareholder of Schultze, Boone & Associates in Sacramento. His practice focus is providing expertise in valuation, forensic accounting and financial analysis for marital dissolution cases. His experience also includes public accounting where he audited large commercial entities and worked in private industry as the Controller and Chief Financial Officer for a large mortgage banking company. Family Code 4058 defines the gross income of each parent as the income from whatever source derived including but not limited to the following: income such as commissions, salaries, royalties, wages, bonuses, rents, dividends, pensions, interest, trust income, annuities, workers compensation benefits, unemployment insurance benefits, disability insurance benefits, social security benefits, and spousal support actually received from a person not a party to the proceeding to establish a child support order; income from the proprietorship of a business, such as gross receipts from the business reduced by expenditures required for the operation of the business; employee or self employment benefits (at the discretion of the court), earnings capacity (imputation of income that is arguably available that is not being currently realized, at the discretion of the court). The California Rules of Court rule sets forth standards for computer software to assist in determining support and is adopted by authority under Fam. Code The standards state that, using examples 1 provided by the Judicial Council, the software must calculate the child support amount, using its default settings, that is accurate within 1% of the correct amount. The standards also state that the software must contain, either on the screen or in written form, instructions for the entry of each figure that is required for the computation of child support using the default settings of the software. The instructions must include, but not be limited to, the gross income of each party as provided for by Fam. Code Are the Judicial Council forms and income examples provided by the Judicial Council for certification of support software adequate to provide for support calculations with respect to income from pass-through entities? Does the Judicial Council, together with the codified guidelines, provide effective guidance related to the treatment of passthrough income? The follow ing hypothetical examples provide realistic circumstances that family law practitioners and family law judges are faced with in determining an appropriate amount of support when the parties hold interests in pass-through entities and indicate the need for review and improved guidance: Hypothetical Scenario #1 Father is employed as a grocery store manager making $75,000 annually. Mother is employed by the local school district as a tenured teacher making $58,000 annually. Both parties have similar retirement and health benefits from their respective employers. The parties have two minor children who spend 35% of their time with dad, with the mother being FALL 2009, NO. 3 PAGE 14 ACFLS NEWSLETTER

15 the primary custodial parent. The parties have insignificant interest and dividend income. Other than an interest in two limited partnerships inherited by Husband from his uncle and some money invested in college savings plans for the children, the parties do not own investments outside of their retirement. The limited partnership interests are fractional, noncontrolling interests and are the undisputed separate property of Husband. The interests have required Husband 2 to report average annual taxable ordinary income of $80,000 while his cash distributions from the partnerships have been 40% of the reportable taxable income annually as a provision for the partners to pay their respective taxes. The balance of the income has been retained in the partnerships to finance growth and distributions greater than 40% of reportable taxable income are not expected before the next three to five years, according to the general partners. According to Fam. Code 4058, what is the annual gross income of each party for support purposes? How should the income be reported on the Judicial Council forms and how should it be input into the support software? Family Code 4058 refers to income but does not offer a definition that provides adequate guidance as it relates to the income from the limited partnership interests. We know that Husband will be required to report an expected $75,000 in wages and an additional $80,000 in ordinary income for tax purposes. What is the result if we include those amounts ($75,000 in taxable wages and $80,000 in other taxable income) as income available for support and input those amounts in the certified support software together with the $75,000 wages for Mother 2? Assuming Husband files as single and Mother files taxes as head of household, the support software indicates that Dad should pay $1,665 in monthly child support ($19,984 annually). We have included $1,200 per month in taxable spousal support to Mother for illustrative purpose. The support software also indicates that Father will be left with $6,262 in monthly net spendable income ($75,144 annually) and that Mother will have $6,625 in monthly net spendable income ($79,500 annually), after receiving child support and taxable spousal support. In our example, does the software report an accurate and fair representation of the net disposable income that will be available to each party? The software accurately reports the required income tax payments of the parties but does it accurately report the net disposable income to Father if we input the taxable income amounts as described above? Father will actually receive the following: related to his wages, a net paycheck of $4,164 monthly (after income and payroll taxes) and $2,667 in average monthly cash distributions from his fractional limited partnership interests ($80,000 40% 12.) Father will pay an additional amount in monthly taxes (in addition to wage deductions and withholdings) of $2,121 monthly to provide for the net impact of reportable partnership income of $6,667 monthly ($80,000 divided by 12) and of deductible spousal support of $1,200 monthly. So what we have is the following itemization of the components of the true net disposable monthly income of Father with child support at $1,665 monthly: Paycheck (net) $4,164 Partnership cash distributions $2,667 Additional taxes due ($1,704) Child support payments ($1,665) Spousal support payments ($1,200) Net Spendable Income $ $2,262 The support software reports spendable income to father of $6,262 per month while the actual spendable income of father is only $2,262 per month after payment of taxes and child and spousal support (a difference of $4,000 per month). What is the source of this difference? Remember that in this scenario, Father must report $80,000 per year in taxable income from federal (and state) form K-1 s related to his fractional limited partnership interests but only receives $32,000 per year in distributions of cash from those interests. This difference is $48,000 ($4,000) per month. The support software offers no written help to provide guidance related to the use of the software to calculate support when this condition exists. Clearly, the net spendable income of Father is overstated by the software in this instance. I have the option, however, of changing the software input scenario by entering a negative $4,000 monthly under non-taxable income to account for the difference between the reportable income from the partnership interests and the actual cash distributions received. If I make this entry, the resulting child support is $750 and if I keep the deductible spousal support at $1,200, the support software indicates a resulting net spendable income to father of $3,177. So what we have is the following itemization of the components of the true net disposable monthly income of Father with child support at $750 monthly: Paycheck (net) $4,164 Partnership cash distributions $2,667 Additional taxes due ($1,704) Child support payments ($ 750) Spousal support payments ($1,200) Net Spendable Income $ $3,177 When I make the entry to non-taxable income to reflect the difference between the reportable income and the actual income received as cash related to the limited partnership interests, the support software accurately reflects the net spendable income of Father. Family Code 4058 does not include the descriptive words reportable and/or taxable before the word income in its definition of the annual gross income of each parent. Would it be proper to conclude that the amount of income that is required to be reported for tax purposes should be considered Continued on page 32 (Boone) ACFLS NEWSLETTER PAGE 15 FALL 2009, NO. 3

16 The QDRO Reader Chapter 6 It s Lord Gillmore Again! Hie to the Castle, but beware the Rook! James M. Crawford, Jr., j.d. The Woodlands, TX jcrawford@ erisasite.com Jim Crawford is an employee benefits/erisa attorney who, for more than two decades, has been serving as a consultant and expert witness for California family law practitioners regarding the characterization, apportionment and division of retirement plans and other forms of deferred compensation. He is a nationally recognized QDRO expert and has been a frequent speaker for ACFLS on the subject. This article, in which he explores the essence of retirement benefits as property against the backdrop of Marriage of Gillmore, is the sixth in a series. Mr. Crawford s earlier chapters (also published in the Newsletter) were cited recently in Marriage of Gray (2007) 155 Cal. App.4th 504. It had been a dark and stormy night, and in the grey morning light I could see well enough to miss all the deep potholes as I swerved and skidded my way toward Swenson s Junction. Both hands tightly on the wheel, I glanced at my watch. Almost fifteen after 12. Damn, I was already late for my lunch with Vargus. Gunning the throttle, I watched my speedometer inch up: fifteen, twenty, twenty-five. My restored Model T clanked in protest. I braked hard for my turn and fishtailed in a sea of mud onto the gravel road that led to Charle magne s Castle. Just half a mile to go and I could see the keep in the mist! Minutes later, I finally bumped up onto the one-lane bridge that crossed Mill Creek. Slowing to a crawl, I rumbled across the loose wooden planks into the past. Or at least that s what Charlie had intended when he bought old Swede Swenson s place some years back. He had planned on developing the hundred-acres of pasture and woods into a medieval theme park and lure tourists off the new interstate in droves. Unfortunately, when the highway finally went through, it bypassed the town completely, and Charlie lost everything. Everything that is, except for the Castle, which he had managed to finish before his investors all backed out. Chuck s Place, as the locals affectionately call it, looks a little odd sitting next to a deserted bunkhouse and the halfcollapsed dairy barn, but what can you do? It had impressive stone ramparts imported from Europe, a covered courtyard, and gargoyles that were still dribbling rainwater from last night s storm. No doubt that s why Vargus had picked it for our Gillmore wrap-up. 1 I parked behind my friend s old Caddy and killed the engine. The lot was a sea of mud, so I carefully stayed on the winding stone path that led to a rusted iron drawbridge spanning a moat that would never be dug. I crossed and had just pushed open the heavy oak door of the restaurant, when the sky started to spit again. The door closed behind me with a loud creak, and I stood still in the damp torch-lit interior of the great hall to allow my eyes to adjust to the dim light, only to find my right hand being grabbed and pumped vigorously by a heavyset man dressed in a gaudy Renaissance costume that both looked and smelled original. Bonjour, Missure Françoise! said Charlie with a broad smile and an ersatz French accent that betrayed his Brooklyn upbringing. Hi Chuck, I replied, trying not to stare at the grease stains on his robe. Vargus beat me here I guess? Mais oui! He eez sitteeng out in ze cour de château under ze paraplooey. He snapped his fingers at his aide de camp, dressed as a court jester. Missure Andee will escort you, non? Not necessary, I said, pointing. Isn t that him out on the patio there? FALL 2009, NO. 3 PAGE 16 ACFLS NEWSLETTER

17 Andy came over anyway a nice kid who used to mow my lawn before I moved to the Marina. But maybe Andy here could bring me my usual; it looks like Vargus has started without me. How bout it, Andy? Jeepers, Mr. Frank, o course! Andy laughed, ignoring Charlie s disapproving frown at his break in character. And I ll bring another couple of glasses out for your friend. He winked to show he had not forgotten Vargus s legendary capacity. Grabbing a wooden menu, he turned to lead the way. Just then Vargus came barging inside, looking almost comical in his battered tam, bow tie and checkered knickerbockers. You re late! said my friend, ignoring Andy as he turned and ushered me back out to his table by the arm. I pulled out a rough-hewn bench, wiped off the water, and sat down. Vargus shucked his tweed jacket and plopped his overstuffed frame onto the seat across from me. Yeah, so we probably only have time for drinks, I replied, looking at my watch. I m due in court at 1:30. Good! I m too excited to eat anyway. Andy reappeared and put two glasses of Jack and Coke in front of me. And here s more of your favorite red sherry, Mr. Vargus, said Andy, with a wave of his hand in a mock flourish. Unable to suppress a snicker, he left us alone on the patio. What the devil s so funny? asked Vargus. Probably your hat, I smiled. Did you know Andy s going to law school at night? He touched his cap self-consciously. Isn t that the kid that used to do your yard? Sure is. So tell me, I said, eager to get down to business, what prompted you to call this morning? I thought we weren t going to have our meeting until next week? Fact is, he said, crossing his fingers against his chest, I just settled another Gillmore matter and couldn t wait to tell you about it! Case involved a huge nonqualified deferred comp plan benefit. He picked up his glass. Do you mind? He drained it without waiting for my answer. Not a bit. I was able to settle Sara s case too, you know, I said. 2 Vargus snorted. Frank, everybody knows you managed to put that one to bed only because Vinny got desperate for money after Old Lady Riley finally threw him out without a dime. He paused to drain his second glass and motion to Andy with two raised fingers for another round. My case, however, was settled because I was able to show wife s attorney how her attempt to use Gillmore to hammer me was going to cost her client a bundle. He leaned back, folding his hands across his substantial midsection. Yep, she folded like a cheap suit and literally begged me to let her withdraw the motion which I did out of the goodness of my heart, of course. Must have been a rookie lawyer? I snorted. Heck, I would have called your bluff in a heartbeat. Everybody knows using Gillmore to force a buyout can hurt the employee spouse, but it s a no-lose deal for the non-employee spouse. I wasn t bluffing, Frank. But how could wife possibly lose by making a Gillmore election? I asked, unable to hide my disbelief, and worried I had screwed something up taking Vinny s settlement offer. Vargus paused to down his glass, savoring the moment. By unnecessarily delaying the filing of her motion, of course. Husband became eligible for early retirement and wife became entitled to request immediate payment of her interest under Gillmore 3 more than four years ago. But instead of filing her motion then, she chose wait. And that delay, my friend, caused her to have to give up the value of all the benefits that would have been payable during that four-year period if had she not sat on her, he took another drink, Gillmore rights while husband continued to work. At least, that s what would have happened under Cornejo 4 if I had not let her drop her election. But so what! I countered, certain now that I had his smug keister, She s still not really out anything. In fact, she s probably ahead of the game. Even though she couldn t get payments retroactive to the date his benefits were matured for Gillmore purposes, because of husband s choice to keep working, the value of her interest would have continued to increase while she waited. And so they would have if she had not decided to invoke Gillmore. And that s the key, Frank. Wife does not get to sit back and watch to see what additional benefits Husband earns as a result of his decision to continue working after reaching his earliest retirement age, and then collect a share of that increase under Gillmore. According to both Gillmore and Cornejo, once husband becomes retirement-eligible and elects not to retire, wife has a choice to make. She can decide to have the value her interest determined and paid when he actually retires so that she can share in any future increases; i.e., she can wait until his benefit is mature under the Brown definition. 5 Or, if she does not want to continue to run the risks and reap the rewards inherent in that option, she can instead elect under Gillmore to have his benefits deemed to have matured on the date he became eligible to retire but didn t, 6 and then have the value of her interest in that matured benefit paid to her by husband immediately. But I still don t see why wife shouldn t be able to continue to share in any increases earned by husband while she decides whether and when to lower the Gillmore boom on him. I can give you at least three good reasons, Frank. First, simple logic. It would be nonsensical, would it not, for a court to say that wife has a right to be compensated because husband s decision to continue working has harmed her interest, and at the same time say that for purposes of determining the amount of that compensation, wife s interest has benefited from that same decision. That would allow wife to have her cake and eat it too. Obviously, her interest cannot be simultaneously impaired and improved. Wow, I hadn t thought that, I said. Ah, but the Gillmore court did, which is why it said in that case and I can pretty well quote it from memory wife s decision to ask for distribution of her retirement benefits before husband actually retires (i.e., before his benefits actually mature), Continued on page 34 (Crawford) ACFLS NEWSLETTER PAGE 17 FALL 2009, NO. 3

18 Supercharge Your Firm s Infrastructure for Greater Effectiveness James Jim Schaefer, cpa Claremont, CA jim@schaefercpa.com James Jim T. Schaefer is a certified public accountant who has earned the Certified in Financial Forensics designation of the AICPA. He has served on panels for the AAML and the Los Angeles County Bar Association on the topics of working with your forensic and overcoming Feldman with technology. This is Jim s fifth article for the ACFLS newsletter. Although his office is located in Claremont, he assists family law counsel in various California locales including San Diego, Los Angeles, Pomona and Santa Barbara. Along with the standard forensic accounting tools, Jim s practice features largeformat color graphics to facilitate story-selling plus four high-speed scanners for efficient document production. In today s FamLaw environment, effectiveness and efficiency are more highly regarded than ever. This article discusses four bang for your buck techniques for advancing this goal. These techniques will facilitate selling your case, teaming up with your forensic accountant, and increasing your efficiency and execution. And all are relatively inexpensive. Number 1 Sell More Effectively. Today s complex cases produce number-filled schedules with small type fonts. That is to say, as we work to fit more on a page, the font size grows smaller and smaller. As complexity increases, I find that black and white schedules on 8.5" by 11" paper in small type fonts just do not provide the case selling power desired. My solution is to station a Hewlett-Packard Officejet Pro K8600 or the newly released Officejet 7000 Inkjet Printer in counsel s office. The cost is about the same as a few FedEx packages $229. Such a printer enables our team to raise the bar to 11" by 17" color schedules. The printer comes as a standalone printer or network version. In most cases the latter is preferred. With this capability, our team presses the stun button by offering the bench and opposing counsel 11" x 17" schedules that are inviting and easy to read. Copies on 8.5" by 11" paper are provided to the clerk. Be one of the first to join in selling your case with stunning materials on a moment s notice. Number 2 Coordinate Better, More Often, Cheaper. A better result is oftentimes achieved if counsel and forensics can mind meld. You remember this concept introduced by Mr. Spock of StarTrek. In your world, you would FALL 2009, NO 3 PAGE 18 ACFLS NEWSLETTER

19 mind meld with your forensic accountants to devise and implement a better overall case strategy. I will explain by alternatives. Alternative A: Old School The forensic completes her report after 6 months and mails to the attorney. The attorney reviews the report cold without much background, studies the result without being familiar with the key ingredients and runs with it, relying heavily on pure trust in the forensic firm. Alternative B: Mind Meld Attorney and forensic discuss key parameters as the report is developed through a series of three to four teleconferences and status conferences over the six-month period. When the report arrives, counsel is already aware of the assumptions, hot buttons and parameters driving the result. The report begins to shape the theme of the case even before it is completed. To set the stage for Alternative B, I put in place two technologies: i. In my office I subscribe to ShowScreen.com, which allows me to show my screen in a secure environment to a remote party who has internet access. Thus if I have a project with a short fuse, I can telephone counsel and show them the schedule on screen. That is to say, I bring up the schedule on my screen and counsel is linked to viewing my screen through an internet link. We can mind meld, make revisions in real time, and develop a consensus in a matter of minutes. Everyone is on the same page and the team is ready to stun. Cost for ShowScreen.com is less than 3 cents per minute. There are various alternative services available. ii. We put in place on counsel s desktop a 32" widescreen Vizio lcd monitor. This enables counsel to read detail schedules (the entire schedule is on screen and readable) when we share screens. I usually shop at Costco for these units $300 (780p) to $600 (1080p). The 1080p Vizio monitors are very much preferred. With this setup we can mind meld over complex concepts and schedules. And yes, the widescreen 32" Vizio lcd monitor allows counsel to read schedules on screen which will ultimately be printed on 11" by 17" paper per Number 1 above. Number 3 Handle PDF Documents More Effectively. Free for valuable information is hard to beat. If you already utilize Adobe Acrobat Pro 9 in your practice, do not pass up the free information offered by Adobe through its Acrobat for Legal Professionals newsletter and video instruction resource. For example, today I received an edition with links to Adobe Pro 9 training on redaction, scanning, OCR, exporting to Excel and other great techniques. If you are not a current owner of Acrobat Pro 9, I would suggest that the free support provided through Acrobat for Legal Professionals is worth more than the cost of the Adobe Acrobat Pro 9 software. To subscribe to this free resource, go to blogs.adobe.com/acrolaw/. To purchase Acrobat Pro 9, go to price surveys at or call Adobe for a site license (preferred). Number 4 Signing PDF Documents. Not everyone will need this last item, but it is a gem if you do. Let s say you are out of the office and need to sign a document. If the document is in the PDF format of Adobe Acrobat, you would probably print the signature page, rescan, and send back by fax or . We all have done this. This is now old school. I learned from Acrobat for Legal Professionals (see Item #3 above) that I can plug a Topaz Systems, Inc. 1" by 5" signature capture device into my laptop or desktop. I then sign like I do at the checkout stand at Vons and paste my signature into the PDF document. And very importantly, Adobe Acrobat Pro 9 secures the document once I have signed. More efficient... more effective... more secure. These Topaz Systems devices are available on ebay for $150 and up. Alternatively, you can search for conventional venders at My Topaz model number is T-LBK462-HSB-R. Go to _ a295153/ p / for an instructional video on the use of this device in Adobe Acrobat Pro 9. If you attended one of my recent panel presentations for AAML or LACBA, please recall the analogy of the wooden toy bow with suction cup arrows versus the performance of the super Nerf triple action compound bow and foam arrow. That is to say, the right, cost-effective technology can elevate your practice. Experiment with at least one of the above ideas in your practice. As always, please feel free to contact me at Jim@SchaeferCPA.com to share your experiences. ACFLS NEWSLETTER PAGE 19 FALL 2009, NO. 3

20 ACFLS WELCOMES NEW MEMBERS AS OF MARCH, 2009 Carole Baldwin Baldwin and Baldwin 9171 Towne Centre Drive, Suite 440 San Diego, CA (858) Brooke Blecher Blecher & Hubbell 1500 E. Hamilton Avenue, Suite 201 Campbell, CA (408) Jason Blonska Smith, Smith, Blonska & Strunk, LLP 1605 E. Fourth Street, Suite 200 Santa Ana, CA (714) Michele Brown Law Offices of Beatrice L. Snider, APC 9663 Tierra Grande, Suite 301 San Diego, CA (858) Robert Burch Burch, Coulston & Buncher, LLP 8001 Irvine Center Drive, Suite 1060 Irvine, CA (949) Rhoda Chandler Hodson & Mullin 723 Texas Street Fairfield, CA (707) Mitchell Ehrlich Lonich & Patton, LLP 1871 The Alameda, Suite 475 San Jose, CA (408) Shannon Fernandez Fernandez and Fernandez 1017 South Broadway Santa Maria, CA (805) Leigh Johnson 3150 Hilltop Mall Road., Suite 62 Richmond, CA (510) Jennifer Keith 177 Bovet Road., Suite 600 San Mateo, CA (650) Vanessa Kirker Wright Law Office of Vanessa Kirker 800 Garden Street, Suite D Santa Barbara, CA (805) vk@kirkerlaw.com Susan Kowalski-Perez Law Offices of Shields &Kowalski Irvine Blvd., Suite 10 Tustin, CA (714) x29 slkowalski1@yahoo.com Anne Lewis Law Offices of Anne Lewis Park Avenue, 1st Floor Victorville, CA (760) anne@annelewislaw.com Christopher Melcher Walzer & Melcher, LLP Oxnard Street, Suite 2080 Woodland Hills, CA (818) ccm@walzermelcher.com Yvonne Miller Yvonne M. Miller, PLC 4020 Palos Verdes Drive N., Suite 204 Rolling Hills Estates, CA (310) millaw100@aol.com Kevin Mooney Kevin James Mooney Inc., APLC 5855 Topanga Cyn. Blvd., Suite 400 Woodland Hills, CA (818) mooney@mooneyfamilylaw.com Allan Morton Fell, Marking, Abkin, Montgomery, Granet & Raney LLP 222 E. Carrillo Street, Suite 400 Santa Barbara, CA (805) amorton@fmam.com David Patton Lonich & Patton, LLP 1871 The Alameda, Suite 475 San Jose, CA (408) dpatton@lonichandpatton.com Salomon Quintero Quintero Family Law Services 601 Brewster Avenue, Suite 100 Redwood City, CA (650) squint@dsol.com Jeffrey Riebel Simborg, Killingsworth & Riebel 770 Tamalpais Drive, Suite 319 Corte Madera, CA (415) jr@skrfamilylaw.com Elizabeth Scully Law Offices of Elizabeth Potter Scully West Olympic Blvd., Suite 830 Los Angeles, CA (310) eps@potterscullylaw.com CORRECTIONS TO ACFLS 2009 REFERRAL AND MEMBERSHIP DIRECTORY: David Borges s correct ACFLS position and contact information: Central California Chair David J. Borges Borges Law Corporation 350 Castaic Avenue Shell Beach, CA (805) alawbiz@aol.com Contra Costa County contact information: The contact information for Contra Costa members was inadvertently omitted from the directory. The omitted pages containing Contra Costa membership have been mailed to each ACFLS member and should be manually added to the 2009 Referral and Membership Directory. We apologize for the inconvenience. FALL 2009, NO. 3 PAGE 20 ACFLS NEWSLETTER