Massachusetts Supreme Judicial Court permits postnuptial agreements in Ansin v. Craven-Ansin

On July 16, 2010, the Massachusetts SJC ruled that postnuptial agreements were not per se unenforceable as against public policy.  In the much-awaited ruling in  Ansin v. Craven-Ansin, (SJC-10548 July 16, 2010), the unaminous court held that if the spouses later divorce,  the agreement must be carefully scrutized, and provided a list of factors that would indicate a particular postnuptial agreement would be enforced or not.     For link to case, http://www.sociallaw.com/slip.htm?cid=19996&sid=120

Among the standards are that there was opportunity to obtain separate legal counsel, there was no fraud or coercion in inducing the agreement, full disclosure is made, there is a knowing waiver of rights to a judicial equitable division of marital assets and other martial rights in the event of a divorce.

And most importantly, the Court held that a postnuptial agreement must be “fair and reasonable at the time of the execution and at the time of divorce”.  This means that the postnuptial agreement must be more like a separation agreement (one made at the time of divorce) than a prenuptial agreement (one made before the marriage).  An earlier case, DeMatteo v. DeMatteo, 436 Mass. 18 (2002),  had provided a lesser standard to prenuptial agreements than separation agreements, stating that in order to be enforceable, prenuptial agreements they must not be “unconscionable” and must not strip a spouse of viritually of  of his or her marital rights.   As another protection to the contracting spouse against whom the contract is being enforced, it is the spouse seeking enforcement that has the burden to satisfy the court as to all these critia.

Ansin v. Craven-Ansin is the first Massachusetts case addressing postnuptial agreements since Fogg v. Fogg, 409 Mass. 531 (1991).  In Fogg, parties entered into a postnuptial agreement which required the Husband to transfer valuable properties to the Wife.  Shortly thereafter, the Wife filed for divorce.  The Court held that the Wife had not entered the agreement in good faith, and in famous footnote 2 “left for another day” the question as to whether marital agreements were valid.

July 16, 2010 was that “other day”, and SJC provided cogent, protected and reasonable standards which will assist spouses in drafting the agreements that will protect and promote their marriages.

In our marital mediation practices, we find couples who want to preserve their marriages, but need our help. Too often struggling spouses think that divorce is their only choice.  A carefully conceived written postnuptial agreement addressing a certain problem that is causing the marriage to derail is often exactly what a couple needs to eliminate the conflict that is tearing them apart.  In our work, we have seen many marriages begin to flourish again after a postnuptial agreement is carefully conceived and signed by the spouses.

To see the oral argument on April 7, 2010 by counsel for the spouses in the Ansin v. Craven-Ansin case in front of the Supreme Judicial Court, click link here.  http://www.suffolk.edu/sjc/archive/2010/SJC_10548.html

Pacemakers Can Preempt Your Living Will Directives

An article appeared in The New York Times Magazine on June 20, 2010, entitled “What Broke My Father’s Heart” by Katy Butler.  http://www.nytimes.com/2010/06/20/magazine/20pacemaker-t.html?_r=1&pagewanted=1

It chronicles the life and death of her father, a retired college professor who had a pacemaker installed shortly after dementia set in.  The pacemaker’s battery was expected to last ten years.  Both her parents had signed living wills, and in fact and were adamantly opposed to their lives extending beyond usefulness and capacity to enjoy living.  They did not wish to be a burden to each other or their children.  Butler’s memoir attracted 442 reader comments http://community.nytimes.com/comments/www.nytimes.com/2010/06/20/magazine/20pacemaker-t.html and five letters reacting to the article were printed in the July 4, 2010 issue of The New York Times Magazine http://www.nytimes.com/2010/07/04/magazine/04Letters-t-002.html.

A stroke at age 79 disabled Butler’s father, Jeffrey. Several years later, after dementia had progressed a surgeon refused to operate on a painful hernia without installing a pacemaker.  Butler’s mother was anxious to relieve her husband’s pain, exhausted with care giving.  In deference to the doctors, she gave her consent to the implant. The author’s heart stopped when she later learned about her mother’s decision.  This medical decision took a minute, but resulted in devastating consequences for her father and the family that lasted many more years. 

What the doctor did not point out was that the pacemaker could permit Butler’s father to live in a mute and dependent state for another 10 years.  The option of using a temporary external pacemaker was not brought up or discussed.  The temporary external pacemaker could have been disconnected after the surgery.

Medicare would have paid the doctor $54 for a (long) office visit to discuss the temporary external pacemaker.  The surgeon earned $461 for the implant procedure, and the hospital a flat fee of about $12,000, of which almost half went to the maker of the device. The hernia was fixed.  In-home care for the rest of Jeffrey’s life cost tens of thousands of dollars.  This is how our country’s medical cost and medical insurance problem grows. 

Several years later, with her father still alive and in a demented state, Butler learned that pacemakers could be deactivated without surgery.  Her father’s heart would return to its previous slow rhythm, and he would eventually die, perhaps in his sleep.  Butler’s mother asked the family physician to deactivate the pacemaker.  He refused. 

Butler and her mother learned that her mother had the legal right to ask for the withdrawal of any treatment under her husband’s health care proxy.  The pacemaker was, in theory, a form of medical treatment.  But her husband’s health care proxy requested no life support if he was comatose or dying, but said nothing about dementia, and did not define a pacemaker as life support.  They learned that (as of that time) no cardiology association had given its members clear guidance on when, or whether, deactivating pacemakers was ethical.  No physician or hospital would help them. 

Two years later (nine years after the onset of his dementia), Butler’s father finally died in a hospital, of pneumonia. His pacemaker continued to work. Butler’s mother died a short time later..  She had declined open-heart surgery after the surgeon said he would refuse to honor her do-not-resuscitate order. “It would not be fair to his team,” the doctor said.

Since her father’s death, the Heart Rhythm Society and the American Heart Association have issued guidelines saying that patients or their legal surrogates have the moral and legal right to request the withdrawal of any medical treatment, including an implanted cardiac device.  In addition, it says that deactivating a pacemaker is neither euthanasia nor assisted suicide, and that a doctor could not be compelled to do so in violation of his moral values. In such cases, it continues, doctors “cannot abandon the patient but should involve a colleague who is willing to carry out the procedure.”  This guideline came too late for Butler and her family. 

You can benefit from the sad experience of Kathy Butler’s family during the last year of her father’s life and her generosity in sharing it with us. When you are executing a living will or medical directive, read the language that defines medical or mental triggers and removal of possible treatments very carefully.  Make sure that life support can be terminated if you suffer from dementia, not only if you are comatose or dying.  Make sure the directive permits the tuning off or removal of a pacemaker.  

© Laurie Israel. 2010.  All rights reserved.

Watch your Beneficiary Designations!

You may have drafted your last will and testament, and perhaps other documents such as health care proxies and powers of attorney.  You may think you are done with your estate plan.  You are not done – you have only done half the work needed.

There are many types of assets that do not go through your last will.  Only property in your own name will go through your will.  (See exception to this rule below.)  So if you only have a last will and testament, you will miss out on controlling what happens to your other assets that do not pass through your last will.

For instance, your house may be jointly owned with your spouse, in a tenancy by the entirety (a particular joint tenancy applicable to spouses), or with another person in a joint tenancy.  Both these forms of ownership include a survivorship provision by operation of law.  This means, when you die, the property automatically goes to the survivor.  You don’t need a will to pass this property, but after you die, the survivor will have the property in his/her own name.  The survivor’s last will determines where the property goes next, and the probate  process sets the new ownership in place.  In many cases, you may wish to coordinate with the other joint tenant who gets the ultimate distribution of the property. 

Tenant in common property is a type of joint ownership that does not have the survivorship feature.  (This is the exception referred to above.)  Therefore, each owner’s interest in the property passes through his/her will.  Whereas joint tenancy always presumes a 50/50 ownership, a tenancy in common can specify non-equal ownerships (in the deed to the owners).

Bank accounts, securities accounts, and certificates of deposits can also be joint.  You will want to keep track of these and update them as needed.  Owning property jointly does not affect the estate tax treatment of the property.  For spouses, the property is deemed to be half owned by each for estate tax purposes.  For non-spouse joint owners, the person whose money it was originally will need to include it in his/her estate tax base.

Many people set up joint accounts with loved ones to provide liquidity at the time of death.  This engenders many bitter disputes among heirs – was the property intended to be part of the decedent’s estate, or was it a gift to the joint owner?  These joint accounts intended to provide liquidity at death are called “convenience accounts.”  It would help if the creator of the account writes an affidavit in setting up the joint account that it was for convenience only, and maybe a statement from the joint owner that he/she understands and accepts this arrangement. 

If you have already created a joint “convenience account” and wish to get it back into your sole name, you will need to complete a change of ownership form with the bank or securities company.  This will require the joint owner’s signature, because the joint owner is giving up something.

Life insurance policies generally have beneficiaries, but this not an automatic process.  You must affirmatively name the beneficiaries in a written form issued by the insurer.  It is a very good thing to name a contingent or alternate beneficiary also, in case your primary beneficiary predeceases you.  If you name no beneficiary, the life insurance will be paid to your “estate,” to be divided as you have set forth in your last will.  This is not really a problem, because life insurance is not taxable to the recipient, whether an individual or your estate.  It does pose problems in liquidity, because your estate will have to be probated in order to release the funds.  This generally takes about 2 months.  (Beneficiaries generally can receive the life insurance proceeds in a few weeks.)

It is very important to name beneficiaries for retirement assets, such as 401(k)s and IRAs.  Having retirement assets paid to your estate has negative income tax ramifications.  This is because retirement benefits are generally income taxed when and as received, and paying them to your estate accelerates recognition of income.  Having retirement assets paid to individual beneficiaries has the benefit of permitting (but not requiring) an extended payout (and resulting income tax deferral).  A surviving spouse gets a more extended payout than non-spouse beneficiaries.  But either way, the retirement asset can build up tax-free until payments are released to beneficiaries.

It is very important to send your signed beneficiary forms into the life insurance company or the retirement plan administrator.  If you do not send them, and they are in your file or on your desk, your beneficiaries will not get the assets if you died.  You need to affirmatively make sure the signed original beneficiary designation is received and processed by the company prior to your death.  Send it by an overnight tracking delivery service such Federal Express with a cover letter.  Copy the cover letter and beneficiary form for your records.  And most importantly, make sure you get a written confirmation of your beneficiary designation from the company, and make sure it is correct.  Mistakes are made all the time.  If not correct, send another beneficiary designation correcting the error.  Follow up carefully.   Some mistakes can cause beneficiaries to have to file a lawsuit to get their money.

The other type of non-probate asset frequently seen is the “paid on death” or “POD” accounts and “in trust for” or “ITF” accounts.  Brokers of securities accounts, banks, and other types of investment vendors offer these like candy, often without discussing the implications with the clients .  These arrangements essentially convert a probate asset (i.e., one in your own name) to a non-probate asset, which passes to the person named on death.  It’s a “stealth” beneficiary form.  But the problem with POD and ITF accounts is that people forget they have made the account go by beneficiary, or they have wanted the account to be in essence a “convenience account” to provide liquidity upon their death.  Many people are unaware that an account they have is a POD or ITF account and assumes it will go through their last will, to be divided among their heirs as the will says. 

I generally advise people to review their accounts carefully and change POD or ITF accounts back into their own name.  They can do this without the assent of the beneficiary, but it may require some paperwork.  You will have more control over where your assets go if you have them go through your last will, and will be able to better coordinate amounts to go to difference beneficiaries.  

So your estate plan doesn’t only include the last will and testament you have so carefully thought out.  It also includes defining and putting into effect your beneficiary designations so that they coordinate with your estate plan.  Many times in checking the beneficiary designations of my estate planning clients, I have found accounts still going to former spouses, or people no longer connected with my client.

 Good estate planning involves a review of your documents and equally important, a review and updating of your beneficiary designations.  After the initial work, review your estate plan and beneficiary designations every few years to make sure they have the same vitality they did when you put them into effect.

 © 2010 Laurie Israel.  All rights reserved.

Happy Life, Happy Wife

Did you ever hear the expression “Happy Wife, Happy Life”?  This overused adage seems to help some people (generally husbands) focus on their wife’s happiness in order to secure a peaceful, happy marriage.  It seems quite manipulative.  What about the man’s happiness?  It’s interesting that the opposite “Happy Husband, Happy Life” is not used.  Studies show that divorces are more often initiated by wives, so perhaps there tends to be an inequality in marital contentment, weighed towards the husbands’ side.

 I originally thought the expression “Happy Wife, Happy Life” was of Oriental origin, because it seemed like the kind of thing you’d find in a fortune cookie.  However, my Google search on the term brought up no Oriental sources.  

 The search for “Happy Wife, Happy Life” did in fact bring up a website www.happywife.com, the work of Rabbi Aryeh Pamensky, who offers many marriage improvement resources (including his own books, tapes, seminars, etc.) on the site.   The term, however, does not seem to be derived from Rabbinic literature, and according to Pamensky, his courses and materials are used by people of difference faiths other than the Jewish, and also by secular couples.

The adage is confirmed by a 2009 German study of Australian divorces that notes where there is a disparity on satisfaction of the husband and the wife, divorce is much more likely, especially if the relative dissatisfaction is experienced by the wife.  http://economix.blogs.nytimes.com/2010/01/29/dont-become-happier-than-your-wife/

Then there’s www.yourhappywife.com.  This site seeks to assist husbands in making their wives happy by helping them choose presents for their wives, which can be conveniently ordered on the website.  Actually, the wares are quite attractive, including eco-soap and herbal teas. These might certainly pave the way for a clueless husband seeking to make his wife happy.  In addition, the husband needing further help can email the site and pose his marital question or problem. “Within 24 hours or sooner”, the person(s) operating the site will respond with the best advice they can give.  The site notes that all emails will be kept confidential and, in order to receive the best advice possible, that honesty is expected from the husband seeking advice.  (I’d like to be a fly on that wall!)

As Rabbi Pamensky says on his site, “A happy wife is a happy life.  It’s just that simple.” 

 But is it?

 George Pransky, a psychologist in Washington State has another theory of marital dysfunction.

His theory is that a person’s own mental/emotional state is the biggest indicator of whether the marriage will work well.  If two people have a low mental or emotional state, Pransky says, marriage enrichment or marital therapy is like spraying for mildew in a damp basement. It never works as a long-term cure.  In his marital counseling, Pransky tries to elevate the couple from the damp basement into an environment of good mental health.  It is only then,  Pransky says, that people can truly work on their marriage to make it  thrive and survive.  Prasky’s book, “The Relationship Handbook”, is a great resource for those couples who want to elevate  their mental state and start working on their relationship.  You can order a copy through www.amazon.com.

 So perhaps the more accurate stating of the adage is “Happy Life, Happy Wife.”  Or even “Happy Life, Happy Husband.”

Keeping your Last Will and Testament Safe

Clients frequently ask me where to keep their signed Last Will and Testament.  The original Last Will is required for probate.  If only a copy can be found, the testator is presumed to have revoked the Last Will and Testament.  Asking for a copy of the Will to be allowed will pose a problem, unless all of the heirs at law (those who would receive the estate had the decedent died without a will) assent to the copy. 

What if you were to place the original in a safe deposit box at a bank?  This is a good solution for many people.  However, unless there is a joint signer to the box who possesses (or who can obtain) a key, there will be a problem getting the will out of the box after the testator’s death. 

The best way to solve this problem is to have at least two people at all times who can access the box.  This works well for married people, but once one spouse has died, the surviving spouse should think about providing joint access to another person so that when the second spouse dies, getting the Last Will is easy. 

If you are single (or your spouse has died), have a friend or a relative be able to access the safe deposit box after your death, by having him/her signing as a joint registrant on the box.  You need to trust the person you select to have joint access.  You may want to think about whether or not to select a relative who would receive an “intestate share” as next of kin if you died without a will, but who will receive nothing if the Last Will in the safe deposit box is probated.

If a friend or relative has died and you suspect that the Last Will is in his/her safe deposit box, you may have a problem.  You cannot probate the Last Will until you have it. If you go to the bank, you may be told that you cannot open the box until you are appointed by the court.  That creates a “Catch 22”, because you can’t be appointed as executor (where there’s a will) until you have the original Will in your hand.

In a situation like this, some banks have good internal procedures and systems in place to provide access to a Will in a safe deposit box.  Some do not.  If the safe deposit box does not have a joint holder, you may have to go to Probate Court to get an order to access and search the box. 

Other possibilities for keeping your Last Will and Testament safe include keeping it in a fireproof lock box at home or simply having the original documents in a file at home.  Make sure your named executor and at least one of your heirs knows where the box and the key to it is located, or where the file at home has been placed.

To Caucus or Not To Caucus — That is the Question

by Laurie Israel.  
I have served clients in mediation in many roles — as mediator, as reviewing attorney, as client’s attorney in the background, and as client’s advocating attorney at mediation sessions.  I have seen a great range of use of caucusing by mediators (including myself), sometimes related to a mediator’s style or the mediator’s theoretical model of what mediation should be, sometimes relating to the particular facts of a case and needs of the clients.

In caucusing, the mediator meets separately with a party in the absence of the other party.  Although more rare, some mediators also practice “pre-caucusing”, in which the first meetings of the mediation take place with the mediator and each individual party, prior to the first  joint meeting, sometimes on a different day than the first 3-way mediation session.

Caucusing can vary greatly.  It can consist of one or two short separate meetings with the mediation clients during a mediation session (perhaps to resolve issues,  big or small, at times of impasse).  Or it can be the mediation equivalent of “shuttle diplomacy,” where the mediator goes from room to room, mediating in what is essentially a continuous series of caucuses.   

Caucusing can be seen as a “carefully considered strategic intervention” (Chip Rose, “Poles Apart”, Family Mediation News (Winter 2007), Association for Conflict Resolution.) Some mediators feel that caucusing gives the mediator too much power to interpret messages, define issues, and engineer a result, and that these acts should be left to the parties themselves.  These mediators see themselves as facilitators, with the real power held by the parties.  

Other mediators use caucusing routinely as a technique.  They view it as an opportunity for a mediator to work separately with mediation clients to help them process the messages sent by the other party in private, to give a party individual care and attention, and to promote resolution of issues privately with each of the parties.

Some mediators (myself included) see caucusing as interfering with the transparency of the mediation process.  These mediators believe that the caucus corrupts the free flow of information and thoughts that is important to mediation, particularly family/divorce mediation.

And  caucusing can pose other great dangers to the process. 

Neutrality and lack of bias (to my mind) are the most powerful tools that the mediator has to offer.  They let the parties both feel protected in the process, and permit one person (the mediator) to function something like a “universal joint” (to use an automotive analogy) or as Chip Rose terms it, a “communication conduit,” in reflecting and accommodating the different needs and points of views of the mediation clients.

When there are private conversations between the mediator and one party, the other party may think (sometimes rightly, sometimes wrongly) that the mediator is no longer neutral when he/she comes back into the room.  This real danger can overshadow the possible benefits of caucusing.  And lack of neutrality (or the perception thereof) is the death of a mediation.

A related problem with caucusing is that a party may impart secrets to the caucusing mediator in private.   Whether or not your mediation agreement says that secrets and confidences will (or will not be) disclosed to the other party, the disclosure itself and the effect on the mediator can throw off a mediation.  Even if you tell a mediation client at the outset of the mediation not to tell you anything that he/she cannot or will not tell the other party, things slip out, especially in a caucus.  This is bound to change the mind-set of a mediator who tries to retain the secret.  It becomes an elephant in the room, leaving no space for the mediation to proceed healthily.

Also, caucusing generally results in a series of exchanged offers rather than the processing and exchange of views (and change of perception and understanding) that are the essence of a successful mediation.  If you tend to view mediation as transformative, this is the path you do not wish take.  

I generally start a mediation (prior to the first meeting, when communications are generally by e-mail) by telling the clients that all communications (including e-mails) should be 3-way.  I explain the reason why – that any “ex parte” communication can lead to feelings by a party that the mediator is no longer neutral and rather favors or advocates for one or the other party.

But I am not a card-carrying “anti-caucuser,” though I tend to make efforts to avoid it in mediation.  But, not at all costs. 

I, myself, have been involved with extreme versions of caucusing (some leading to a successful conclusion.)  I have had mediations marked by an extreme need for caucusing that required completely abandoning face-to-face meetings and proceeding with a series of phone calls and emails with each of the parties separately. It was mediation, because I was functioning as a neutral third party, and it worked for these clients, who needed not to be in the same room or even the same office building.  (I do not believe in throwing out the baby with the bathwater, and tend to be very practical).  But I believe that, at least in family/divorce cases, caucusing has many drawbacks, and mediators should try to avoid it.

To me, the most important touchstone of a successful mediation is for each of the parties to feel strongly that the mediator is neutral and not biased towards or against them.  Mediation clients can easily sniff out mediator bias and lack of neutrality.  It seeps out of a mediator’s pores.  Usually clients correctly and rightly perceive bias and lack of neutrality (when it exists), although in some cases, the lack of neutrality and existence of bias is a misconception on the part of the clients.  Non-neutrality and bias (or the perception of it) immediately derails mediation, and the mediator almost never has another chance to remedy the blemish.  The clients (or one of them) almost always abandon the process.  If they continue with it they invariably feel “burned” at the end, whether or not the mediation results in agreement.  This is not a good result for anyone and these clients will never recommend the mediation process to others.

A successful mediation is more than just a rushed-into agreement.  It has lasting benefits for the parties.  A good mediation makes it more likely that the parties can handle future challenges by themselves, without a neutral third party.  That is why many of our mediation clients tell us that if they could have worked with us prior to their break-up, their marriage may have worked out.  (That is how and why “marital mediation” or “mediation to stay married” often works successfully.)

There are differences in the viability of caucusing in different types of mediation.  Caucusing may have varying uses in divorce mediations, marital mediations, and mediation in other types of civil disputes.  The majority of mediated divorces deal with parties who have children.  These are people who will be in relationship for the rest of their lives.  Having the last act of their marriage (the mediated divorce) be partially in secret (in the caucus) seems to be not the best way to end a marriage and begin a lifetime of co-parenting.  After all, mediation is about self-reliance and self-determination, and exchanges of a party’s “truths”.  Face to face negotiations, assisted by the mediator, seem to best reflect this process.

In marital mediation, where a couple is trying to stay together and maintain their marriage, I generally avoid caucuses like the plague.   (I am aware that other marital mediators have different views on this.)  Working with a married couple is a very tender intervention by a mediator.  For a couple to stay married, generally they need to have no secrets (at least not big ones).  Caucuses can promote secrets.  Also, in marital mediation, the marital mediator has a chance to model dispute resolution for the couple. Caucusing seems, to me, to make the process go awry because caucusing will not be available to the couple when they go home and deal with their own problems in “real” time.  Also, without full, truthful transparency in the marital mediation process, problems in the marriage can linger, fester, and not be resolved in the marital mediation. 

In civil mediation, caucusing is much more of an integral and helpful feature of the mediation process.  Generally, the parties will have nothing or little to do with each other after the mediation.  The burden that caucusing may pose to the future relationship of the parties is not an issue here.  Often, the parties will come to the mediation with their lawyers.  Anyone who has experienced a civil-matter (not divorce) mediation with the parties and their lawyers in the room, understands that in this situation a strong caucusing element with features of shuttle diplomacy by the mediator is generally very  effective.  It is not surprising that much of the academic literature dealing with caucusing deals with business, not divorce, mediations.  (See, for example, Richard Calkins, “Caucus Mediation – Putting Conciliation Back into the Process”, Drake Law Review Vol. 54, 2006)

I would love to hear from other mediators (and mediation clients) regarding their views on caucusing in mediation and welcome comments to this article.

© 2010 Laurie Israel.  All rights reserved.

Laurie Israel is founder of Israel, Van Kooy & Days, LLC, a law firm located in Brookline, Massachusetts.  She combines a family law practice with estate planning, tax, mediation and collaborative law.   Laurie is currently on the board of directors of the Massachusetts Council on Family Mediation and the Massachusetts Collaborative Law Council.    Her writings include articles on mediation to stay married (marital mediation), collaborative practice, marriage, divorce, and pre- and post-nuptial agreements.  She is a frequent presenter at professional conferences.     

 

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