Wednesday, September 29, 2010

Divorce Lawyer or Mediator? -- You Can't Have It Both Ways

A friend recently told me about what a bad deal she got in her divorce.  She entered into a mediated settlement but the terms turned out to be very unfair.  When I asked whom she used to conduct the mediation, she told me that her husband’s attorney acted as the mediator.  No wonder the settlement was one-sided!  It certainly wasn’t my friend's fault.  How was she to have known that it is improper and unethical for an attorney who represents one party to also act as a mediator for both sides in a divorce?  She trusted the lawyer when he said that he could act as an impartial mediator.  But, in actuality, that lawyer had a serious conflict of interest.  He was retained to represent the husband and, as such, his job was to act as a zealous advocate for his client - to take his client’s side and fight for him, if necessary.  A mediator, on the other hand, must be completely impartial.  He or she must act as a neutral third party; someone who doesn’t take sides.  The job of the mediator is to help the parties negotiate an agreement that is as fair to everyone as possible.

It is unethical for a lawyer to represent both parties to a divorce, or to act as a mediator while he is representing one of the parties.  The attorney is allowed to meet with both sides and discuss the issues, or even try to settle the case, but he must make it clear that he is acting in the best interests of his client and that he is not a neutral third party.

I have represented clients in divorce cases for almost thirty years.  As an attorney, I am a zealous advocate for my client's best interests.  My family law practice also includes mediation; and as a mediator, I am a compassionate, impartial professional who works hard to help the parties fashion a fair settlement.  But we can’t wear two hats at once:  We can act as an advocate -- or a mediator -- but not both.  Don’t be fooled by any lawyer who tries to tell you differently. 

If you have a family law question, contact by email, call us at 602-383-3610, or just check out our website at http://www.garyfranklaw.com/     

Tuesday, September 14, 2010

Spousal Maintence vs. Property Equalization Payment - Which is Best?

When negotiating a settlement agreement in which a monthly payment is to be made following a divorce, parties are sometimes faced with a decision:  Should we designate the payment as spousal maintenance -- or should it be considered a property equalization payment?  There are pros and cons to both options. 


The purpose of Spousal Maintenance is to provide financial support for a former spouse who qualifies under A.R.S. §25-319.  Under Arizona law, spousal maintenance payments are taxable to the spouse who receives the payment and deductable to the payor.  Since the person on the receiving end will have to pay income tax on the payment, she or he will wind up with something less than the full amount.  On the other hand, there is a measure of security since it is very difficult to avoid one’s obligation to pay spousal maintenance – especially if it is designated as “non-modifiable.”  Under 11 U.S.C. 523(a)(5) the Bankruptcy Court has no power to discharge a debt for payment of spousal support.  Knowing that the spousal maintenance award cannot be discharged in bankruptcy provides a level of safety that may be important.


A “property equalization payment” is intended to equalize the final division of property between parties to a divorce.  It can be paid in a lump sum or by installment payments.  Unlike spousal maintenance, a property equalization payment does not result in a taxable obligation.  Thus, the receiving party “pockets” the entire amount.  However, if the person obligated to pay a property equalization payment files for bankruptcy, the entire unpaid balance could be discharged under 11 U.S.C. 523(a)(15), and the party on the receiving end could wind up with nothing.

In our struggling-economy, I've handled a growing number of cases in which a former spouse threatens to cut off his or her spousal support obligation by filing for bankruptcy.  Current bankruptcy law makes that an idle threat.  However, if the payment is determined not to be spousal support but, rather, a property equalization payment, then there is a danger that the debt could be discharged in bankruptcy.

The decision whether to structure a payment as spousal maintenance or an equalization payment should be made only after a careful and thorough examination of all relevant factors.  Once that decision is made, the provision must be worded precisely in order to assure that there will be no confusion about the parties’ intent.  Gary J. Frank has over 25 years of experience in handling complex divorce and property division matters.  If you have questions or concerns about your own situation, please do not hesitate to call for a consultation.  Our phone number is 602-383-3610.  For more information, contact us be email or check out our web site at www.garyfranklaw.com.

Wednesday, September 1, 2010

OUR INITIAL CONSULTATION - WHAT TO EXPECT

When you come in for an initial conference at the Law Office of Gary J. Frank P.C., what you get is a real legal consultation. Not a one-hour sales pitch, like you get from some other lawyers. In our first meeting, I will give you a solid understanding of your legal rights and how the court system works – and at the end of the meeting I will give you a "game-plan," so that you will know what you must do to reach your goals. Unlike most firms, I do not limit the initial consultation to one hour.  Instead, I will take as much time as is necessary to:



• Learn about your family history and the background facts of your matter;


• Obtain important information that can be used to help you with your case in court;


• Listen to your concerns and answer your questions;


• Talk to you about the law pertaining to your case;


• Explain your legal rights under the Arizona statutes and appellate court caselaw;


• Discuss the court process - how it works, how long it takes, what documents must be filed; what information must be disclosed; what hearings are held, and how the judge looks at the dispute;


• Discuss options for peaceful resolution of your dispute outside of the court-system, such as Mediation, Conciliation Services Conferences, Settlement Conferences using a judge pro tem, round-table negotiations between the parties and their attorneys; and other healthy alternatives;


• Talk about legal fees and a range of how much your matter might cost; and


• I'll give you a "game plan" tailored to your needs and the specific facts of your matter.  The "game plan" is my recommendations and advice regarding what must be done in your case and the steps that you can take to reach your goals.


An initial conference with an attorney is a critical step in the process of finding a solution to your problem. This is where you begin, for the first time, to put together a “road map” of where you want to go and how to get there.


By the time you leave my office after your first consultation, you should have a much better understanding of your legal rights; of how the court process works; of what your options are; and of what you will need to do to reach your goals and resolve your problem.  Many people walk into our office timid and afraid, and leave armed with knowledge and a sense of renewed confidence.


If you are in need of a legal consultation regarding a divorce, custody, or other family law matter, please check out our web site: http://www.garyfranklaw.com/ .  You can always call us at 602-383-3610 or contact us by email.   I look forward to meeting you.


Sincerely,

Gary Frank