I was recently asked what happens to a case when the plaintiff dies while the case is pending. The death of a plaintiff in a tort case ends the claim for pain and suffering but not the expense to the estate.

If a person dies while their case is pending for say injuries in a motor vehicle collision, the portion of the claim that exists for the pain and suffering is lost. There is no logical explanation for such a rule. The person may have suffered for years before dying of an unrelated issue.

The key here is to be sure the person dies from an unrelated injury. One must first determine there is no causal connection for which the claim could be amended to a wrongful death. If that is not the case, then all that pain and suffering is no longer an available claim.

However the cost to the person for medical care and for lost wages would still be available. Unfortunately, the amount is usually small in comparison to the pain and suffering and most people do not pursue that remedy.

Sometimes, with the right demand, in a clear liability case, the defense will tender the amount of the bills to end the case. Remember however, there are liens which may attach to those proceeds which is a topic for another BLOG.

One of the most difficult things about divorce, even divorces that are relatively amicable, is learning a new way to communicate with your former partner, especially when children are involved. While I am sure that some (saintly) people are able to continue to treat their ex-spouse in the same loving and compassionate manner that they did while they were married, most of the rest of us would occasionally like to take a two-by-four to the other person’s head.

Whether the breakdown in communication happens because of “divorce crazy” or real crazy, there will be days when a hostile, or even psycho, email will show up in your in-box. And the trick to dealing with these emails, as well as dealing with communicating in general is to change your response, rather than to try to change your ex-partner.

Email is a wonderful tool – but like all tools can be used for evil as well as good. We have probably all been the recipient of a ranting, obnoxious email at one time or another. We may even have sent one ourselves. Certainly when you receive an email like that your first response is likely to be “fight or flight.” You are emotionally hooked in and feel like you need to defend yourself. BUT DON’T. Take time, take a breath and analyze the situation.

Bill Eddy, a California therapist and attorney, has spent many years both dealing with folks with “high conflict personalities” and helping others to deal with them. He has developed a method for analyzing and responding to hostile email, that works both for emails and almost any other communication with a hostile person, whether a former spouse, family member or business associate. http://www.highconflictinstitute.com/Published-Articles/responding-to-hostile-email.html . He recommends that you consider three things before bashing out a response:

1. Do you need to respond? Sometimes angry emails are just intended to pull you into an argument – to give the angry person power over you. Stop the cycle, if you can, by simply ignoring the email or at least ignoring everything but the real issues. For example, you receive a three-page email ranting about what a louse you were as a husband and father. Ignore. However, buried in that rant is one sentence about how your child needs both parents to sign a permission slip for school. Address only this issue.

2. Don’t respond emotionally. Your ability to think rationally is impaired by your emotions. Take a break, put away the email and wait to respond until after your anger and hurt has subsided. If you need to, write an angry email back, but do not send it. Print it out, tear it up and delete it. Then go back and write a new email.

3. Figure out what your goals are before you write the new email. Focus on that goal and write an email that fits into Bill Eddy’s BIFF format – brief, informative, friendly and firm.
BRIEF – Focus on the real issue and your goal.
INFORMATIVE – Focus on just the facts, avoiding negative comments, sarcasm and threats.
FRIENDLY – Treat this like a business letter to customer or company that you have a disagreement with. You wouldn’t spew vitriol at a business contact. Well, now your former spouse is a business partner with you and you are in the business together of raising happy, healthy children. Treat that person like you would a co-worker that you don’t personally like but must get along with to get the job done.
FIRM – Tell the other person clearly what your position is. Don’t leave the door open to more discussion if you are not willing to continue to hash out an issue and receive more of the same anger.

Using the previous example, here’s a sample answer: “Dear Ex-Spouse, I understand that Johnny needs us both to sign the permission slip. I will stop by the school on November 16th to sign the form. I spoke to the teacher and they do not need us to sign the same form, so this will take care of the issue. Regards.”

Looks easy, sounds easy. But it is not, but it is important to learn to do both for your sanity and that of your kids.

EFFECT OF DIVORCE ON PRE-EXISTING WILLS &
ESTATE PLANS

Most today are aware that approximately 50% of all marriages end in a divorce, dissolution or annulment (referred to in this note collectively as “divorce”.  The marriages that don’t end in divorce ultimately end with the death of one spouse. A large percentage of divorced persons, widows, and widowers subsequently remarry one or more times. This note addresses the legal effect divorces may have any pre-existing estate plans including wills, trusts, non-probate transfers [such as joint tenancy with rights of survivorship, community property with rights of survivorship, payable on death ("POD") and transfer on death ("TOD") beneficiary designations]. A subsequent note will address the effect of marriage on a pre-existing estate plan.

What effect does divorce have on a will or trust executed during marriage?

A divorce, by statute, revokes (cancels) any provision in a will executed prior to the divorce directing distribution of any assets to the former spouse (or members of the former spouse=s family) of the divorced person. Likewise, a provision in a revocable trust executed prior to the divorce directing distribution of assets to the former spouse is revoked.

What effect does divorce have on assets where a former spouse was designated during the marriage as a “POD” or “TOD” beneficiary (such as on a bank, credit union account, stock, bond or brokerage account)?

A divorce revokes the beneficiary designation naming the former spouse or any members of the former spouse’s family. It is of critical importance, however, that written notice of the divorce be given to the institution because if the institution delivers the asset to the named beneficiary in good faith and without notice of the divorce, the institution is not liable for having made the distribution to the former spouse.

What effect does divorce have on assets titled during marriage in joint tenancy with rights of survivorship or community property with rights of survivorship with a former spouse?

The divorce terminates the survivorship provision and thereafter the parties own the asset as tenants in common (each owns an undivided equal interest but the death of one of them does not transfer the deceased person’s interest to the survivor). It is essential that there be specific written notice of the divorce recorded in records appropriate to the kind and location of the property.  Otherwise, the party making delivery to the former spouse (or family member of the former spouse) or a third party acquiring the property or asset for value without notice is protected from liability.

What effect does divorce have on a designation of a former spouse or member of the former spouse’s family as beneficiary of a life insurance policy?

The beneficiary designation is revoked upon the divorce unless there is some contrary provision in the divorce decree which provides for beneficiary designation or ownership of the policy. As stated above, however, it is critical that written notice of the divorce be given to the insurance company. Otherwise, the insurance company is not liable for payment to the former spouse or member of the former spouse’s family.

So, What Action is Required/Advised upon a Divorce?

It is dangerous to rely upon the statutory provisions discussed in this article instead of having the entire estate plan reviewed and revised during a divorce proceeding. Unintended consequences can occur in spite of the statutory provisions! Upon the filing of a divorce action, there should be consultation with an attorney familiar with the estate plan and appropriate revisions, changes made to any existing will, trust, beneficiary designation, joint ownership of assets. The statutory provisions do not cover all possibilities!

The federal estate and gift tax rules continue with an uncertain future; the same uncertainty that has been with us since 2001 when the Bush tax cuts were enacted. At that time (2001) “temporary legislation” was passed establishing federal estate and gift tax rates . . . and rules which were effective through 2010. All estate planners predicted permanent legislation would be enacted prior to 2010. Wrong!

January 1 of 2010 came, and with it, the year of NO ESTATE TAX!. Yes, during the calendar year of 2010 there was no federal estate tax. Even in the early months of 2010, new legislation was anticipated and the estate planning “gurus” were fantasizing about the various possibilities. Nothing happened until mid December of 2010.

Then came the “temporary extension” of the Bush tax cuts and with it new temporary estate and gift tax rates and rules. So, for the next two years only, (this is a once-in-a-lifetime opportunity) the estate and gift tax exemptions and rates are as follows:

1. The exemption from estate and gift taxes is $5,000,000 per person. There is one exemption only which can be used as an exemption from gift taxes or, an exemption from estate taxes or, a combination of both but totaling $5,000,000.

2. The estate tax rate is 35% on amounts in excess of $5,000,000.

There is also a brand-new concept commonly called “portability”. If spouse 1 (“Harry”) dies during this two year term and his estate is less than the $5,000,000 exemption, the unused portion of that exemption is then available to his surviving spouse (“Dorothy”). Thus, as an example, if Harry has no assets at death and hasn’t previously used any portion of his $5,000,000 exemption by making lifetime gifts, Dorothy has not only her own $5,000,000 exemption, she also has the $5,000,000 exemption of Harry. In this example, the estate of Dorothy will not be subject to estate taxes unless her estate exceeds $10,000,000 (assuming she made no lifetime gifts). Wow!

Isn’t that great? Well, not if you’re Harry or Dorothy because BOTH of them have to die after December 31 of 2010 and before January 1 of 2013 to take advantage of this once-in-a-lifetime offer. On January 1, 2013, the $5,000,000 exemption, the 35% tax rate and portability all evaporate and we’re back to where we were in 2001 with a $1,000,000 exemption and progressive tax rates of up to 55%.

On reflection, this uncertain future is no different than what we’ve always “lived” with in the past. There have been so many changes in our tax system through the years that one needs a calculator with advanced math functions to calculate them. Perhaps, the perceived uncertainty of the future is, in reality, certainty . . . for the next two years . . . . unless Congress and the President agree on a more “permanent” approach.

The Arizona Legislature sometimes overlooks the consequences of what it may feel is a “good” law. The legislators will often hear a story or complaint from a constituent and want to help remedy the problem with legislation.. The problem is that the story or complain is about one person or a couple of people, but the legislation affects all of us. And there are, very often, unintended consequences to legislation.

For example, there is presently before the legislature, Senate Bill 1373.

Section 2 of this Bill seeks to amend A.R.S. §25-211 to provide that community property would NOT include property that is “acquired as a result of service in the United States Armed Forces, whether through active duty, reserve duty or National Guard service, inside or outside of this state.”

In an effort to head off this not thought through legislation, I wrote this e-mail to the Committee in charge of presenting the bill for enactment:

 Members of the Military Affairs and Public Safety Committee:

This would be unfair to the families of service members in Arizona to enact.

Although we should all honor the commitment and the service to our country of the men and women of the armed forces, we must also keep in mind the sacrifices made by the family of those who serve. Those who must move from duty post to duty post. Those who must care for the family while the service member is stationed in Iraq, or Afghanistan, or Libya, often having not only to care for the family as a single person without the aid and comfort of the other parent, but often having to be employed at whatever job is available to make ends meet. This often results in giving up training and education that would be of benefit financially to the one at home. But this is the sacrifice they make.

For the family.

Traditionally, the wages of service personnel has been so very low that many families have to resort to federal and state assistance just to feed the family. The sacrifice of serving one’s country is not just the sacrifice of the service member.

The recognition of community property rights is the recognition that those who must preserve, and persevere, in the home front are deserving of recognition for keeping the family together and are deserving of financial recognition as well. This proposed legislation which makes all income of service personnel the separate property of that member would denigrate the service to the family and the sacrifice of the spouse left at home to make do.

I’ve got to believe we can find a way to honor service to the country without dishonoring the family which makes possible this service.

Certainly, if by legislation you take from the family the financial recognition of this great sacrifice, you will discourage the marrying of service members. This legislation will take a certain “class” of people (those who marry service members) and treat them differently from all other people who live and work and raise families in Arizona.

It would seem to one already married and making this sacrifice that this is a punishment for marrying a service member since it deprives the spouse of the reasonable expectation of the marriage: to support one another.

It will also weaken the family structure by requiring the spouse to work outside the home to put enough aside for the spouse to survive now and to have a retirement in the future. At what cost to the family?

Realizing that it is the young people who have to make these decisions about the service and marrying service members, means that it is the youngest of the children who will have to bear the brunt of two working parents. It should be the public policy of Arizona that when it comes to families, it’s one for all and all for one. Not just all for one.

While I’m sure the intent of this legislation is to honor the veteran, the practical effect is to dishonor the veteran’s family. The unintended consequences of this legislation will include reducing the pool of available young people to enlist in the armed forces and denying as worthy the very basic values of Arizona families to share in the bad times and to share in the good, to invest in the future by sacrificing in the present, and to honor the notion that the family is strongest when all pull together.

Please do not support this legislation, please vote no.

Dean Christoffel

Why of course you have automobile insurance that covers you if you are in an accident. The state requires a very minimum policy so at least you have what is called a 15/30 minimum policy ($15,000 per person/$30,000 maximum per accident). And, if you are like most people, you have a lot more insurance if you have any assets.

But what about the other guy? All too often, people insure against the damage they may cause but forget or ignore the problem that a minimally insured driver, with no assets, may hit you causing damage and injury beyond the limits of insurance. One trip to the emergency room by ambulance, a few x-rays and a follow up visit with your primary care physician and your bill will be staggering. Then throw in some follow tests such as an MRI and some physical therapy and the $15,000.00 policy will not cover the bills.

You have a way of protecting yourself with your own insurance. You can request under-insured and uninsured coverage from your own automobile insurance company. It is a small cost and can be written for the same amount of coverage you carry for the other person. So, if you have a $100,000/$250,000 policy, you can have $100,000 in uninsured or under-insured coverage.

If you are willing to cover “the other guy”, you should consider covering yourself and family from the other guy.

You need to know that all carriers must offer you this coverage, and it is very inexpensive. Do not forget to protect yourself from the uninsured and under-insured driver. There are plenty of them out there.

Did you know that a hospital or health care provider can file a lien against the proceeds of any settlement or judgment you may get against the person who ran the red light and hit you. Even though your insurance paid the bill, the medical provider may claim a balanced bill lien. That is, the hospital that saw you in the emergency department has the right by statute to record a lien against your settlement or judgment. Although the provider may not sue you directly under the terms of your insurance or under the statute for the difference between what the insurance paid and what the hospital billed, it can still get that difference from the third-party tortfeasor (bad guy who hit you).

What this could mean to you is no money would be available to pay you for your pain and suffering if the person has a very minimal policy. You get hurt, you pay for insurance, and the health industry gets to keep it. It is basically a windfall to them as had there not been someone else responsible, they would only be entitled to what your insurance paid.

Freakanomics — books, movies, radio commentaries, and a New York Times blog which attempt to explain the economic motivations and incentives for all the crazy things humans do. Recently, the Freakanomics blog in the Times asked the question, “What is going on with marriage?” in response to recent reports that the marriage rate was declining at a faster rate, due to the recession. Apparently, many people assumed that the cost of getting married (over the top weddings and such) was preventing folks from tying the knot. Even the Times reported that the “long-term decline in marriage accelerated during the severe recession.”

Turns out, not so much. Justin Wolfers, a professor of economics at the University of Pennsylvania and a visiting fellow at the Brookings Institution, looked at the last 30 years of data (new marriage certificates issued each year, per 1000 people) against a timeline of recessions. His view – it turns out that the data for 2009 is as boring as the numbers for the past 30 years. While there is a tiny “blip” in the rates, the marriage rate is “sticking doggedly to the trend line.” Fewer people are getting married in general, and at older ages, but marriage “remains a central institution in American life.”

Makes sense – we may waiting until later in our lives to get married, but essentially it makes good economic sense to be married. Two people generally live more inexpensively together than separately. Everything from housing to insurance to toilet paper is cheaper when you are buying for just one household.

So can you afford to get divorced? Besides the normal costs (Lawyers, filing fees, child and spousal support) divorce raises the costs of debt to a point where it might make more sense to just stay together until at least your finances are straightened out.

For example, a family is struggling with debt. The house is underwater or one of the partners is unemployed or underemployed. They’re fighting and ready to be done with one another. They file for divorce and split what little assets there are and attempt to equitably split the debts. The Judge signs the decree and each gives a sigh of relief. Until one of the partners fails to pay up on the debt they agreed to take over in the divorce. Unfortunately, credit card companies and other creditors don’t care what you decided to do in family court – they are going to harass you until that debt is paid. If the former partner decides to file for bankruptcy and has the debt wiped out, that creditor is going straight for the non-filing former partner. The non-filer is now either stuck with paying off the debt or filing for bankruptcy as well.

But, you say, there’s a court order, a decree, which requires them to pay that debt. Yes, but unless the decree states that the payment of the debt is in the “nature of support” (like child or spousal support), that debt can be erased by a bankruptcy even if the family court reduces it to a judgment.

So, does it make more economic sense to stick it out, pay off the debts together or file for bankruptcy together, before filing for divorce? Freaky.

Ever wonder how the heck we figure out who gets what when trying to divvy up a pension? Who was that Van Loan guy anyway? Our own David West represented Mrs. Van Loan, arguing that she had a community interest in Mr. Van Loan’s military retirement benefits, even though the benefits had not yet vested. The trial court, and later the Arizona Supreme Court, found that Mrs. Van Loan’s interest in the pension was one-half of the fraction of the number of years of the marriage over the number of years he had served in the military, if and when he received the pension. Hence, the Van Loan formula was born.

What is the deal about seemingly normal people going nuts when texting or e-mailing their former or soon to be former spouse?

Why does it seem that when writing they’ll forget that they’re writing and that someone may later read what they wrote? And that someone might be a Judge trying to decide what to do about a custody issue, and how the parents act toward one another. You see, many Judges think that the way parents treat each other is pretty good evidence of how they treat everyone, including their kids. Judges also think that children learn how to treat their parents from the way their parents treat each other. And Judges believe that children will learn more from their parents’ behavior than from their lectures about how to act when these children begin to have relationships of their own.

Now, there are a couple of things we better make straight right away. First, whether you think you are a clever writer and are capable of describing graphically how awful your former spouse is, you don’t want to publish it to the world in an e-mail message. If you do, I promise you, you will see it in a courtroom while under cross-examination. And in the harsh florescent light of a windowless courtroom, it will not look as clever as you might have thought it did on your monitor or the tiny screen of your cell phone. Second, no matter whether you think it fair, just or otherwise, Judges judge, and they will judge you. Personally. And they will judge you, not from knowing you since grade school, or from talking to all of your girlfriends and relatives, nor from taking the time to listen to your story like a bartender at the local pub. They will judge you based on the look on your face when you talk about the other parent of your children, and those e-mails. And do you think that, under cross-examination, opposing counsel is going to read the entire stream of e-mails to show the context of your cleverness? Get real. Counsel will just highlight the bad stuff. And don’t even think for a second that the judge will read all of that stuff. Even if they said they will.

Now, let’s take a moment to talk about Tourette’s and e-mail. Tourette’s syndrome is an inherited neuropsychiatric disorder whose symptoms are generally multiple physical tics and at least one vocal tic. Tourette’s has gotten a bad rap over the last few years since it has been identified by the popular notion that it causes outbursts of obscene words or socially inappropriate and derogatory remarks. In fact, this behavior, even in those afflicted with Tourette’s is rare. I share this with you so that you will understand that I know what Tourette’s is, and when I use the expression in the phrase “E-mail Tourette’s” I mean that rare and bizarre behavior described above: outbursts of obscene or socially inappropriate and derogatory remarks.

Like that old joke about insanity being hereditary. “Yeah,” goes the punch line, “you get it from your kids!” Email Tourette’s is a contagious by contact disease, one you get from contact with Family Law disputes. And it is extremely contagious. Unless you’re careful, your former spouse will give to you. Or you’ll spread it. How can we treat this disease that causes bad feelings, strong reactions and incites normal folk to act like villagers with pick-forks and torches storming Dr. Frankenstein’s castle?

Among some of the more successful strategies in avoiding e-mail Tourette’s that I’ve found is the use of the “I”message. An “I” message is an assertion about the feelings and beliefs of the person speaking generally expressed as a sentence beginning with the word “I” in contrast to the “you” message which begins with the word “you” and is aimed at the person spoken to. The notion of the “I” message has been around since the sixties and is a great tool in the mediator’s tool kit. In their marvelously insightful book, “Joint Custody with a Jerk: Raising a Child with an Uncooperative Ex,” Ross and Corcoran show how to use the “I” message as a template for speaking in a conflict. They even provide a template which can be used in our e-mail communications to help control e-mail Tourette’s.

Part of the magic of “I” messages they tell us, is these messages don’t attack the person, they attack the behavior. And, if you keep your tone of voice neutral, they are nonthreatening and respectful. (Whether or not you really feel nonthreatening or respectful, it is best to sound that way for effective communication, which is what we are striving for, not absolute honesty.) They make clear, however, that while these messages allow you to remain calm, it is important to keep the words “always” and “never” out of the vocabulary and to deal with each situation as if it were excluded from all others–keeping it in the present by not dredging up the past.

Before we get to the template for our e-mails, compare these two examples from Joint Custody with a Jerk:

“You’re always late and you’ve made me late again. You never consider my schedule. You never budget your time. Why are you always so inconsiderate?!”

“When you’re late, I feel angry because it inconveniences me. I’d like you to start out earlier next week so you can arrive on time.”

The chances are, more likely than not, that the recipient of the second statement will be less likely to be defensive and to respond in a positive manner.

So, here is the template. Use it in every e-mail in which you are dealing with behavior that you’d like to see changed. You can customize your e-mail to be a template or you can just memorize this set-up.

1. When you ____________. (Identify the problem.)

2. I feel ____________. (State how you feel)

3. Because _______________. (State why you feel that way)

4. I would like you to ____________. (Make a specific request for change).

So, a Tourette’s free e-mail from an upset parent to the other, not-living-up-to-expectations parent would go like this:

Steve:

When you are late picking up Jimmy, I feel frustrated because it makes me late for my evening plans and inconveniences others. I would like you to please pick him up on time. So this Friday will you get him before 6:30?

Thanks

Dolores.

Ok, so this won’t guarantee eternal bliss and understanding. But it will go far in avoiding the e-mail Tourette’s which causes, increases and exacerbates the conflict and may allow for some small space in which a miracle of understanding can occur.

Dean Christoffel
October 4, 2010