FALL 2009, NO. 3 WHICH COURSE TO TAKE IN FAMILY c.ymcdn.com/sites/ · PDF fileviewed by Attorney Stephen Temko, CFLS, ... hot tips on family law practice, ... Bonnie Hough of the Administrative

Association of Certified Family Law Specialists FALL 2009, NO. 3

Newsletter Editor

Debra S. Frank, j.d., cfls

N E W S L E T T E R

Editor’s Desk � � � � � � � � � � � � � � � 2Debra S. Frank, j.d., cfls

President’s Message � � � � � � � � � � 3Joseph J. Bell, j.d., cfls

Letters to the Editor � � � � � � � � � 4Collabo rative Divorce Practice In California � � � � � � � � � � � � � � � 6

Len Weiler, j.d., cflsKaren 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

WH

AT

’S I

NS

IDE

ACFLS 2009 Officers Ballot � �11Deferring the Sale of the Family Residence � � � � � �12

Stanley L. Bartelmie, j.d., cflsDifficult 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 � � � � � � � � � � � � � �21ACFLS Reception at the 2009 State Bar Annual Meeting � � � � � 24ACFLS CLE on DVD Order Form� � � � � � � � � 40Custody Matters � � � � 42

Leslie Ellen Shear, j.d., cfls

2010 Spring Seminar Preview � � � � � � � � � � � 45Reflections on the Human Side of Family Law Practice: Finding the Joy � � � � � � 46

Heidi Tuffias, j.d., cfls

Commissioner Alan Clements (Ret.) was recently inter-viewed 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 1974. 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 Certi-fied Family Law Specialist in 1987. In February 1988, I became the first Superior Court Commissioner in San Diego County. I was fortunately assigned to Family Law and stayed there

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 (Clements)Continued on page 26 (Libbey)

WHICH COURSE TO TAKE IN FAMILY LAW DISPUTES –

The Public Court or a Private Neutral?A View from a

Northern California JuristCommissioner James H. Libbey (Ret.), JAMS

[email protected]

A View from a Southern California Jurist

Commissioner Alan Clements (Ret.), [email protected]

FALL 2009, NO� 3 PAGE 2 ACFLS NEWSLETTER

Continued on page 23 (Frank)

N E W S L E T T E RFALL 2009, NO. 3

Association of Certified Family Law Specialists

PresidentJoseph J. Bell, j.d., cfls

President-ElectLeslie Ellen Shear, j.d., cfls, cals

Newsletter EditorDebra S. Frank, j.d., cfls

Newsletter Editor-ElectDawn Gray, j.d., cfls

PrintingExecuprint/Chatsworth, California

Graphics and TypographyGraeme Magruder/Kalligraphics

The acfls Newsletter is a publication of the Association of Certified Family Law Specialists.

Send your submissions in WordPerfect or Word by email to:

Debra S. Frank, cfls, Newsletter Editor2029 Century Park East, Suite 1400

Los Angeles, CA 90067 Phone: 310-277-5121 • Fax: 310-277-5932

Email: [email protected]

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 StatementIt 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 DirectorFor circulation, membership, administrative and

event registration requests, contact:

Lynn Pfeifer, ACFLS Executive Director 15 Corrillo Drive, San Rafael, CA 94903-3902

(415) 499-1610 • Fax: (415) 479-1347Email: [email protected]

© 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 attor-neys 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 elec-tion, 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 utiliz-ing a private neutral.

Board member Stephen Temko inter-viewed Commissioner Alan Clements (Ret.), the 2009 recipient of the State Bar Family Law Section California Judicial Officer of the Year Award. Steve’s inter-view reports the perspective of a South-ern 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 “Col-laborative 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 – Parent-ing 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 on-line comment form are available at www .courtinfo.ca.gov/jc/tflists/elkins .htm. 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 Adminis-trator Appropriately Paid Pen sion Benefits to Ex-wife, the Designated Beneficiary, Despite Language in Divorce Decree,”

From the Editor’s DeskDebra S. Frank, j.d., cfls

ACFLS Newsletter Editor

Los Angeles County

[email protected]

From the Editor’s DeskFrom the Editor’s Desk

ACFLS NEWSLETTER PAGE 3 FALL 2009, NO� 3

Continued on page 33 (Bell)

Your Association was actively pres-ent at the State Bar Meeting in San Diego, September 10–13. 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 legisla-tive, 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: “Equi-table 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 Cali-fornia 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, leaflet-ing, and significant riot police presence, in response to a small group of demon-strators 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 suc-cessful anti-same-sex marriage ballot measure) due to the substantial finan-cial 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 abun-dantly 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 Gov-ernors 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-

President’s MessageJoseph J. Bell, j.d., cfls

ACFLS President

Nevada County

[email protected]

President’s MessagePresident’s Message

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.


R. Ann Fallon, j.d., cfls

Contra Costa County • [email protected]

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 respect-fully 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 over-

ruled 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 benefi-ciary 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; there-fore, 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 Par-ticipant’s remaining interest in this Plan based on a designa-tion 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, includ-ing 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. ■

LETTERS TO THE EDITOR

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. 

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 Desig-nated Beneficiary, Despite Language in Divorce Decree,” by Katherine S. Somervell, Susan Olson, and Abby Wool Landon, published in the Summer 2009 ACFLS Newsletter.


James M. Crawford, Jr., j.d.The Woodlands, TX

[email protected]

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 relation-ship 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 par-ticipant 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 employer-provided life insurance). However ERISA’s anti-alienation provision, a key feature in the Kennedy case, applies only to pension plans. ■

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.”

December 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.

Association of CertifiedFamily Law Specialists

SAVE THE DATE


Consensual dispute resolution in general and Collabo-rative 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, unbun-dled 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 decision-maker. Of course, some parties and some situations are unsuit-able 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 ModelStarting in Minneapolis, Minnesota 20 years ago, collabo-rative 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 prac-titioners 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 educa-tion about the Collaborative Process. There are now local and regional practice groups in all major cities and most large com-munities 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 

Collaborative Divorce Practice in California

Len Weiler is a partner at Weiler and Borst LLP in San Ramon, CA, with a law prac-tice emphasizing consensual dispute resolution, including collaborative law and media-tion. 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 practi-

tioner in Walnut Creek and Pleasanton, California. 

Ms. Berdy’s practice focuses on representing clients in 

mediation, collaborative law and other settlement-

oriented dispute resolution proc esses. Ms. Berdy is a founding member of the 

Board of Directors of Collab-orative Practice California 

(CP Cal), is on the Steering Committee of Collaborative  Practice East Bay and is chair-

person of  Collaborative Lawyers of Alameda/Contra Costa.

Len Weiler, j.d., cfls

Contra Costa County

[email protected] • www.weilerlaw.com

Karen Heller Berdy, j.d., m.b.a.

Contra Costa County

[email protected]


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 state-wide 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 collabora-tive 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 dis-ciplines 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 reali-zation 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 collabora-tive 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 repre-senting 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 moti-vations 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 par-ties 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, encourag-ing 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, good-faith 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 problem-solving, 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 TrainingNotwithstanding 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 con-structively, 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 collab-orative 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 recom-mends 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 addi-tion, a further 15 hours of training in interest-based negotia-tion, communication skills, additional collaborative training, advanced mediation training, and/or basic coach training.

Interdisciplinary TeamThe 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)


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 1995. In developing the new document, we pored over other States’ and Coun-ties’ 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,” “border-line,” or “high-conflict.” They find them-selves 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 ref-erences. In the end we decided against it, concluding that the process is by stipula-tion 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

PARENTING PLAN COORDINATION: A Hybrid Role for Alternative

Dispute Resolution in Family LawAngus Strachan, ph.d.

Los Angeles County

[email protected]

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.


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 decision-making about unknown future disputes; it is not a custody evaluation under Evi-dence Code section 730 because there is decision-making and not just recommen-dations; 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 ambigu-ous term “Special Master” was used, one we thought was not particularly descriptive and even somewhat mislead-ing, as Special Masters are usually attor-neys, who are officers of the court, and PPCs are more often mental health pro-fessionals. Nationally, the most widely used term today is “Parenting Coordi-nator,” 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, practi-cal, and time-sensitive. Examples include changes in drop-off location, scheduling for Holidays and vacations and selecting extra-curricular activities. These deci-sions 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 chal-lengeable by bringing an OSC within 30 days and proving “by a preponder-ance 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 sched-ule, 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 “recommen-dations” do not hold the same force as custody evaluation “recommendations”: custody evaluation recommendations are made as part of a report that is usu-ally entered into evidence and which is considered expert opinion; PPC recom-mendations are neither and, unless the parties stipulate to adopt the PPC recom-mendations, are subject to a de novo hearing.

Some counties in California differ-entiate between a Parent ing Coordina-tor, 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 communi-cation 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 guide-line. Having said that, we ask that any changes be clearly marked in handwrit-ing 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 solu-tions. 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 deci-sions and help their clients be realistic about decision-making.

In conclusion, the LA County Bar Association Family Law Section com-mittee 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 already-stretched 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 commit-tee was composed of myself, Commis-sioner Curtis and attorney Leslie Shear.

The stipulation is available at http://www.lundstrachan .com/forms/PPC_1_Stipulation_08.pdf.

The Notice of Decision is available at http://www . lundstrachan.com/forms/PPC2_notice_of_decision_08.pdf. ■


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 appoint-

ing 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 prob-lems 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, 2009California State AuditorAttn: Debbie Meador, Chief, Legislative Affairs555 Capitol Mall, Suite 300Sacramento, California 95814Dear 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 orga-nization 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 with-out 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 con-ducting 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 com-pleteness of the proposed audit, e.g., some of the problems or obstacles to actu-ally resolving the troubling allegations:

The majority of the “allegations” or claims are apparently generated by par-ties who did not “win” their case. To determine if claims of “foul play” are valid, it would seem one must examine

ACFLS Responds to State Auditor’s Audit of Sacramento and Marin County Family Law Courts

Report of Legislative CoordinatorDiane Wasznicky, j.d., cfls

Sacramento County

bartholomew & wasznicky llp

[email protected]

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.


both sides of the case and most impor-tantly 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 profes-sionals are often done by stipulation and without an actual hearing or automati-cally 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 eval-uators 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 media-tion/evaluation because of that confiden-tiality (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 attor-ney-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 actu-ally considered by the courts in each case, no true assessment as to the reason-

ableness and integrity of the procedures, process and the overall system in Sacra-mento 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 improve-ment, excellence and most importantly, impartiality.

If you feel we can provide any assis-tance 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 WASZNICKYLegislative Coordinator for ACFLSCC: Senator LenoAssembly Member MaACFLS Board of Directors ■

ACFLS 2009 OFFICERS BALLOTPursuant 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, 2009.

Please return your ballot to ACFLS Administrator, Lynn Pfeifer, at 15 Corrillo Drive, San Rafael, CA 94903. 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.


Attorneys, Mediators and Collab-orators 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, neighbor-hood, 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 inter-est 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 foreclo-sure proceeding. Or, one of the parties may need time to acquire the ability to purchase the other party’s commu-nity 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 resi-dence 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 dissolu-tion of marriage or legal separation of the parties on the welfare of the child.” Family Code Section 3800(b). Hogo-boom 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 applica-tion 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

Deferring the Sale of the Family Residence

Stanley L. Bartelmie, attorney-mediator, cfls

Santa Clara County

[email protected]

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 1983. 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.


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 pay-ments, 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 feasi-bility” 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 manda-tory. There are ten statutory factors, which the court is required to consider and weigh. Marriage of Stallworth (1987) 192 Cal. App.3d 742, 746-750, Marriage of Braud, supra, and Family Code Section 3800 et seq., Hogoboom and King, Cal.  Prac. Guide: Family Law (2009) 6:551-585. 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 con-

venience 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 loca-tion 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 imme-diately sold and the proceeds divided.

Eighth, determining the tax conse-quences to the parents, and the require-ment 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 3803.

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 natu-rally 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 young-est child reached age 18. A deferred sale of home order may also be made for adult children owed a support obli-gation (. . . “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 3807. Should the resident party remarry, or there is a change in cir-cumstances affecting the Fam. Code Sections 3801 or 3802 determina-tions 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 pre-sumption affecting the burden of proof that further deferral of the sale of the family residence is no longer an equi-table 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 3808. Consequently, when the parties actu-ally desire a fixed deferral period, they must document that intent in a written agreement, to avoid the court’s discre-tion 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)


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 opera-

tion 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 5.275 sets forth stan-dards for computer software to assist in determining support and is adopted by authority under Fam. Code § 3830. The standards state that, using examples1 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 § 4058.

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 pass-through income? The follow ing hypothetical examples provide realistic circumstances that family law practitioners and family law judges are faced with in determining an appro-priate amount of support when the parties hold interests in pass-through entities and indicate the need for review and improved guidance:

Hypothetical Scenario #1Father 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

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.

Difficult Issues Encountered in Determining Income Available for Support from Business Intereststhe Need for Judicial Council Review of Guidelines and the Limitations of

Certified Support SoftwareBrian M. Boone, cfa, cva, cpa-abv, m.b.a.

Sacramento County • [email protected]


Continued on page 32 (Boone)

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 retire-ment. The limited partnership interests are fractional, non-controlling 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 part-ners 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 indi-cates 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 partner-ship 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 soft-ware to calculate support when this condition exists. Clearly, the net spendable income of Father is overstated by the soft-ware 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


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 half-collapsed dairy barn, but what can you

do? It had impressive stone ramparts imported from Europe, a covered court-yard, and gargoyles that were still drib-bling 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?”

The QDRO ReaderChapter 6

It’s Lord Gillmore Again!Hie to the Castle, but beware the Rook!

James M. Crawford, Jr., j.d.

The Woodlands, TX

[email protected]

 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.


Continued on page 34 (Crawford)

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 disapprov-ing 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, ignor-ing 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 any-way.” 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 fl ourish. 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 non-qualified 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 sub-stantial 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 unneces-sarily 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 contin-ued 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 retro-active 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. Accord-ing 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 ben-efits 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 determin-ing 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 simul-taneously 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),


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 sched-

ules 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 sched-ules 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 pro-vided 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 intro-duced by Mr. Spock of StarTrek. In your world, you would

Supercharge Your Firm’s Infrastructure for Greater Effectiveness

James “Jim” Schaefer, cpa

Claremont, CA

[email protected]

www.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 large-format color graphics to facilitate story-selling plus four high-speed scanners for efficient document production.

clerk. Be one of the first to join in clerk. Be one of


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 com-pletes her report after 6 months and mails to the attorney. The attorney reviews the report cold without much back-ground, studies the result without being familiar with the key ingre-dients 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 confer-ences 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 environ-ment 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. Every-one 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 moni-tors 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 http://blogs.adobe.com/acrolaw/. To purchase Acrobat Pro 9, go to price surveys at www.pricegrabber.com 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 email. 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 docu-ment 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 www .pricegrabber .com. My Topaz

model number is T-LBK462-HSB-R. Go to https://admin.adobe.acrobat.com/ _ a295153/

p52397284/ for an instructional video on the use of this device in Adobe Acrobat Pro 9.If you attended one of my recent panel presenta-

tions 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 tech-nology 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 [email protected] to share your experiences. ■


ACFLS WELCOMES NEW MEMBERSAS OF MARCH, 2009

Carole BaldwinBaldwin and Baldwin9171 Towne Centre Drive, Suite 440San Diego, CA 92122(858) [email protected] BlecherBlecher & Hubbell1500 E. Hamilton Avenue, Suite 201Campbell, CA 95008(408) [email protected] BlonskaSmith, Smith, Blonska & Strunk, LLP1605 E. Fourth Street, Suite 200Santa Ana, CA 92701(714) [email protected] BrownLaw Offices of Beatrice L. Snider, APC9663 Tierra Grande, Suite 301San Diego, CA 92126(858) [email protected] BurchBurch, Coulston & Buncher, LLP8001 Irvine Center Drive, Suite 1060Irvine, CA 92618(949) [email protected] ChandlerHodson & Mullin723 Texas StreetFairfield, CA 94533(707) [email protected] EhrlichLonich & Patton, LLP1871 The Alameda, Suite 475San Jose, CA 95126(408) [email protected] FernandezFernandez and Fernandez1017 South BroadwaySanta Maria, CA 93454(805) [email protected] Johnson3150 Hilltop Mall Road., Suite 62Richmond, CA 94806(510) [email protected]

Jennifer Keith177 Bovet Road., Suite 600San Mateo, CA 94402(650) [email protected] Kirker WrightLaw Office of Vanessa Kirker800 Garden Street, Suite DSanta Barbara, CA 93101(805) [email protected] Kowalski-PerezLaw Offices of Shields &Kowalski18002 Irvine Blvd., Suite 10Tustin, CA 92780(714) 832-8520 [email protected] LewisLaw Offices of Anne Lewis14388 Park Avenue, 1st FloorVictorville, CA 92392(760) [email protected] MelcherWalzer & Melcher, LLP21700 Oxnard Street, Suite 2080Woodland Hills, CA 91367(818) [email protected] MillerYvonne M. Miller, PLC4020 Palos Verdes Drive N., Suite 204Rolling Hills Estates, CA 90274(310) [email protected] MooneyKevin James Mooney Inc., APLC5855 Topanga Cyn. Blvd., Suite 400Woodland Hills, CA 91367(818) [email protected] MortonFell, Marking, Abkin, Montgomery, Granet & Raney LLP222 E. Carrillo Street, Suite 400Santa Barbara, CA 93101(805) [email protected] PattonLonich & Patton, LLP1871 The Alameda, Suite 475San Jose, CA 95126(408) [email protected]

Salomon QuinteroQuintero Family Law Services601 Brewster Avenue, Suite 100Redwood City, CA 94063(650) [email protected] RiebelSimborg, Killingsworth & Riebel770 Tamalpais Drive, Suite 319Corte Madera, CA 94925(415) [email protected] ScullyLaw Offices of Elizabeth Potter Scully11400 West Olympic Blvd., Suite 830Los Angeles, CA 90064(310) [email protected]

CORRECTIONS TO ACFLS 2009 REFERRAL AND MEMBERSHIP DIRECTORY:David Borges’s correct ACFLS position and contact information:Central California ChairDavid J. BorgesBorges Law Corporation350 Castaic AvenueShell Beach, CA 93449(805) [email protected]

Contra Costa County contact  information:The contact information for Contra Costa members was inadvertently omitted from the directory. The omitted pages containing Contra Costa member-ship have been mailed to each ACFLS member and should be manually added to the 2009 Referral and Member-ship Directory. We apologize for the inconvenience.


ACFLS ANNUAL HOLIDAY PARTYDecember 5, 2009San Francisco, CA

Ann Fallon will be honored with the 2009 Hall of Fame Award at

our annual holiday party; we urge all of you to attend. ACFLS

annually selects a Certified Family Law Specialist whose contributions

to the specialty have been significant and who exemplifies the highest ethical and legal standards

of practice in family law. Ann Fallon’s contributions have been substantial. She has focused her practice on family law retirement and other employee benefit issues, is a frequent writer and speaker on

those subjects, and is one of the four drafters of the 2008 revisions

to Family Code §2337.

The other distinguished recipients of the award to date are as follows:

1991 Robert J. Fulton1992 C. Rick Chamberlin1993 Stephen Adams1994 John F. Staley1995 Garrett C. Dailey1996 Barbara A. DiFranza1997 Mark I. Starr1998 Stuart Walzer1999 Ruth Rymer2000 George H. Norton2001 Lorraine C. Gollub2002 William M. Hilton2003 Stephen J. Wagner2004 Alan L. Tanenbaum2005 Patricia A. Parson (Special Recognition Award)2006 Justice Donald B. King (Ret.) (Special Recognition Award)2007 Diana Richmond2008 Hon. Robert A. Schnider


Weiler & BerdyContinued from page 7

interdisciplinary team to work with the divorcing couple is to help them (and the lawyers) understand those non-legal, non-economic issues, to provide tools for dealing with them, and to facilitate communication between the parties, so that they can effectively participate in the settlement negotiations.

In addition to the lawyers, a collaborative team typically consists of collaborative coaches (generally one for each party), a neutral financial specialist, and, where children are involved, a child specialist. The divorcing couples work with their divorce coaches to identify and better understand their individual goals and concerns, to improve their c ommunication skills with one another, and to develop self-management tools as appropriate. The divorce coaches often help the parties discuss the needs of their children, and to develop a parenting plan. A child special-ist meets with the children as a neutral, provides a voice for the children in the process, and is also available to assess special needs of the children which may result from the divorce or otherwise. The financial specialist assists the parties in gather-ing necessary financial information (generally more efficiently than overlapping data gathering by two separate attorneys). As an unaligned neutral, the financial specialist may allow a couple to work together collaboratively on this task in the earli-est stages of their divorce. The financial specialist works closely with the couple and their counsel to develop understanding of both present and future financial needs and the economic consequences of potential settlement scenarios.

The integrated interdisciplinary model of Collaborative Prac-tice provides a couple with the services they need from the pro-fessional most qualified to address the issue(s) at hand. It also frees the collaborative lawyer from having to be a psychologist, social worker, financial specialist, child development specialist, etc., allowing counsel to focus on helping the client realize his/her goals, understand the law, evaluate settlement options, and effectively articulate the client’s ideas and perspectives.

Comparison to MediationThe goal of both mediation and the Collaborative Process is

to help disputing parties reach resolution of all issues in their case. Both mediation and the Collaborative Process utilize interest-based negotiations to guide the parties toward resolu-tion of their disputes, and both mediation and the Collaborative Process require voluntary disclosure of all relevant information and a commitment to resolutions that respect the shared goals of the parties. Both models offer the divorcing couple a high degree of privacy and confidentiality as they go through the divorce process.

In mediation, the neutral mediator does not give legal advice to either party and does not act as an advocate for either party. When the mediating parties are not on a level playing field (for example, one party lacks negotiating skills, is unreasonable, is emotionally distraught or is unable to under-stand the finances) the mediation can be very challenging because the mediator cannot advocate for either party and if the mediator tries to deal with the problem, one of the parties may believe the mediator is biased. If the parties have lawyers,

the lawyers may be present during the mediation sessions, but typically are not. If the lawyers are not present during the mediation sessions, the parties may consult with their attorneys between mediation sessions. Once an agreement is reached, a draft settlement agreement is prepared by the medi-ator, and is generally reviewed by the parties’ attorneys prior to execution. If the parties are unable to reach settlement, the mediator is disqualified from representing either of the parties in litigation. However, the parties may choose their consulting attorneys to represent them in litigated proceedings.

In Collaborative Practice, the clients work with their lawyers and, often, with an interdisciplinary team, consisting of coaches for each party, a financial professional and perhaps a child specialist. As in mediation, the collab orative team has as its sole agenda settlement of the case. The collaborative team members have training similar to the training that mediators have in interest-based negotiation. The lawyers and/or the coaches are present with their clients during the negotiating process and support their respective clients throughout the negotiations. As a result of the additional support provided by the team, and the fact that parties have their coaches and/or attorneys present with them during the negotiations, parties who are not comfortable in mediation or who may not be suitable candidates for mediation (uneven playing field, etc.) are often able to resolve their disputes using the collaborative process. The collaborative team works together to assure that the process stays balanced and productive. Once agreements are reached, the agreement is drafted by both collaborative attorneys so that the agreement is satisfactory to both parties. If the parties are unable to reach settlement, the collaborative attorneys (like the mediator) cannot participate in litigated proceedings.

Role of the LawAs in mediation, a hallmark of the Collaborative Process

is that the law need not control resolution of the issues. The parties have the ability to formulate solutions based on other mutually agreeable principles such as their sense of equity and fairness; their interests and needs and the interests and needs of others (for example, the children); the practical and eco-nomic realities; and their prior agreements, either formal and explicit or informal and implicit, as they relate to a given issue.

Of course, the collaborative lawyer does have an obliga-tion to educate his or her client regarding the law as it applies to the issues of the case. Parties can use the law in several ways to help them make decisions and reach creative, durable agreements meeting the needs and interests of both parties and their children. In the Collaborative Process, the law is often viewed as the likely outcome if the parties go to court. The likely outcome in court is often used as a backdrop against which the parties measure the settlement options they are considering. The law is often also viewed as a set of commu-nity standards, with the parties considering the principles underlying the legal result in order to inform their own sense of equity and fairness about possible outcomes. Finally, a failure to educate the parties about the law could result in a challenge to the settlement agreement reached in the Collab-orative Process and/or a possible malpractice claim, with one


party claiming that they would have reached different agree-ments if they had been properly informed about the law.

To the extent possible, collaborative lawyers educate the parties regarding the law in joint meetings as part of the proc-ess of brainstorming and evaluating options. In this way, the parties are told the same thing at the same time. When prop-erly introduced, the law educates parties about what a court might do, enabling them to make informed decisions and to select the solution that best serves their needs. The law should not be allowed to dominate the process, nor should it be viewed as irrelevant to the ultimate resolution of disputed issues. If the law dominates, it can be coercive and can foreclose consider-ation of other client-developed options that may be based on mutually agreeable principles or values, and which could result in a more advantageous resolution of the issues. If the law is not considered, however, the parties may exclude a key factor which would assist them in reaching a mutual agreement.

One of the biggest challenges facing collaborative attorneys is determining just how to bring the law into the process in a way that educates the parties about its potential impact, while giving parties room to decide for themselves how much weight to give the law in their thinking, and to make informed deci-sions about whether a proposed resolution serves them better then the alternatives, legal or otherwise.

Success and SatisfactionEarly studies suggest a high degree of effectiveness of the

Collaborative Process, with more than 90% of cases reaching resolution. A Canadian government study found high levels of client satisfaction with the process. Our personal experience and anecdotal evidence from other practitioners would confirm this. And, although the interdisciplinary model in particular is not inexpensive, collaborative cases often seem less expensive than litigation, and far less so than high conflict litigation. Also, the collaborative approach to resolving divorce disputes does seem to produce less pain and trauma, along with greater understanding and greater control for the client participants, and often results in carefully tailored, idio syncratic, family-friendly settlements. Parents praise the care and sensitivity given to children and parenting issues in particular.

For collaborative counsel, Collaborative Practice can provide professional satisfaction in a variety of ways: a way to help clients and their families through the divorce minefield constructively and compassionately, without litigation; an opportunity to develop new skills and face new intellectual and professional challenges; a highly collegial working relationship with other family law attorneys; as well as entry into an interdisciplinary community of other compassionate professionals. ■

inspired two QDRO experts to continue the conversation. This issue features those Letters to the Editor from ACFLS Member Ann Fallon (who will receive the 2009 ACFLS Hall of Fame Award at the December 5, 2009 annual holiday party) and James M. Crawford, Jr., j.d.

Several articles in this issue address key financial issues in family law practice. ACFLS member Stanley L. Bartelmie reviews the legal basis for the deferred sale of the family home and provides a useful overview of the issues practitioners should consider when the sale is being deferred. Brian M. Boone, CPA, explains the limitations of certified support soft-ware when determining income available from business interests for support.

Jim Crawford is teaching us about retirement plans but his mind is on chess. In Chapter 6 of Jim’s QDRO Reader, he gives us an in-depth discussion of the division of retirement accounts under Gillmore. Twenty-eight years after the Supreme Court decided Gillmore, it is still a hot topic as retirement benefits change shape and form.

Successful family law practitioners

are constantly integrating new technology into their practices. James Schaefer, CPA, offers us guidance on technological tools and resources to help improve efficiency and effectiveness.

As always, the Newsletter is your source for information about upcoming ACFLS events. Join ACFLS members for this year’s Annual Holiday Party on Saturday, December 5, 2009, at San Francisco’s Mark Hopkins Hotel. We’ll gather in the Room of the Dons to inau-gurate our 2010 Board of Directors (don’t forget to send in the ballot you’ll find in this issue) and socialize with colleagues from all over the state. Each year ACFLS presents the Hall of Fame Award at the Holiday Party to a Certified Family Law Specialist whose contributions to the specialty have been significant and who exemplifies the highest ethical and legal standards of practice in family law. This year’s honoree, R. Ann Fallon, has crusaded to protect family law litigants’ rights to employee benefits, and has patiently led all of us through the nuances of benefits issues.

Board members Karen Freitas and Patricia Rigdon and their committee are hard at work planning the 18th Annual Spring Seminar – “Titles, Transfers and

Transmutations: When Spouses Change the Character of Assets and Obligations.” This year we’ll return to the desert on the weekend of March 26–28, 2010. Karen and Patricia have booked the Hyatt Grand Champions Resort, Indian Wells, Califor-nia for three half-day seminars, and three half days of daytime fun in the sun and evening social events. The program will include an optional pre-conference insti-tute on a topic near and dear to all of us – “Advanced Attorneys’ Fees” – on Friday afternoon. Register early – our last three Spring Seminars were sell-outs.

Usually we start asking you to “Save the Date” for an upcoming ACFLS event a few months before the event. But ACFLS will be celebrating our 30th Anniversary all year long in 2010, culminating on December 4, 2010, with a special anniver-sary party in San Francisco. Past-President Ron Granberg and Justice Donald King (Ret.) are co-chairing this event. Check back next issue for a preview of the plans.

As always, the Newsletter closes with ACFLS member Heidi S. Tuffias and her reflections on the human side of family law practice. This time Heidi inspires us to transcend the stress, frustration, and aggravations of our work with “Finding the Joy.” ■

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B Steve Wagner, cfls, and Dawn Gray, cfls, former President of ACFLS and Newsletter Editor-Elect, presenting their program at the State Bar Annual Meeting.C Melbourne (Mickey) Gwin, cfls, and Karen Freitas, cfls, Director South-Elect.D Diane Wasznicky, cfls, ACFLS Legislative Coordinator; Leslie Shear, cfls, ACFLS President-Elect; and Avery Cooper, cfls.E Laura Dewey, cfls, and Caralisa Hughes, cfls.F Marc D. Adelman, j.d., and Katharine Guenther, j.d.G Brenda McCune, cfls; James Preston, cfls; and Catherine Goodrow, j.d. H Frieda Gordon, cfls, ACFLS Director at Large South; Nancy DiCenzo, cfls, Director at Large Sacto/NE; Sterling Myers, cfls, Director at Large; and Karen Freitas, cfls, Director South-Elect.I Spectacular San Diego waterfront setting.J Joe Bell, cfls, ACFLS President; Lynn Pfeifer, ACFLS Administrative Director; and Nancy DiCenzo, cfls, ACFLS Director at Large, Sacto/NE.K Leslie Shear, cfls, cals, ACFLS President-Elect, and Bonnie Hough, cfls, Administrative Office of the Courts.L Sharon Bryan, cfls, ACFLS Past President.M Michelene Insalaco, cfls.N A scenic view of the San Diego boardwalk.O James Preston, cfls; Frieda Gordon, cfls, ACFLS Director at Large South; Avery Cooper, cfls; and James’ wife, Bonnie, enjoy drinks and the view on the balcony.

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ACFLS ReCeption At the

2009 StAte BAR AnnuAL Meeting


LibbeyContinued from page 1

ClementsContinued from page 1

for the next 21 years. I left the bench in December 2008 and started at JAMS in February 2009.Q. Did you have any idea you would be serving in family law court for 21 years? Most judicial officers are in for three or less and leave, how did you handle it?

I didn’t initially have the idea that I would stay on the family law bench that long. The longer I stayed, I realized I would be doing it for the rest of my judicial career. The only law I have ever known is family law. I didn’t have any issue with staying on, or with burn out. I just enjoy family law and the people I worked with. I enjoyed the cases that come before me and the lawyers as well. I didn’t get emotionally wrapped up, and was able to leave my work “at work.” I also didn’t have clients nipping at my heels at all hours of the day.Q. You were the trial judge in Marriage of Haines [(1995) 33 Cal. App.4th 277], Marriage of Dekker [(1993) 17 Cal. App.4th 842] and Marriage of Lusby [(1998) 64 Cal. App. 4th 459]. I pulled up Haines and Westlaw cites it 817 times. Did you ever imagine Haines would be cited over 800 times in the following 13 years?

considering the use of a private neutral does not mean the decision should always be made to take that route. The decision to actually use a private neutral will depend upon whether the individual case will benefit from the intensive attention and flexibility of a private neutral or from the less intensive approach taken by the public court.

Are Private Neutrals Elitist?Before examining the specific strengths of the two systems and how those strengths impact different types of cases, it should be recognized that there is, among some, a general unhappiness with the idea of “private judging.” The view of those individuals – led most prominently by the current Chief Justice of the California Supreme Court – is that the “private judging” system is available to only those who can afford it and as such, it is unfair and something to be avoided and criticized.

There is no question that the very poor are seldom found in private neutral proceedings (other than in pro bono

Continued on page 28 (Libbey)

Which Course to Take in Family Law Disputes –The Public Court or a Private Neutral?

Continued from page 1

Hon. James H. Libbey (Ret.) is a well-known expert in family law who served as Commissioner/Judge Pro Tempore of the Contra Costa County Superior Court before joining JAMS, where he resolves complex family law matters. 

He had a full-time family law assignment during his entire 27 years on the bench 

making him the longest serving family law judge in the history 

of Northern California.

Stephen Temko, CFLS, CALS, is a San Diego Certified Family Law Specialist and Appellate 

Law Specialist in private practice for over 30 years. 

Both he and Commissioner Clements (Ret.) graduated from the University of Pennsylvania, which explains why they both 

wear red and blue ties.

Commissioner Alan Clements (Ret.) served as a Family Law Commissioner in San Diego for 21 years. In 2002, he 

received the San Diego County Certified Family Law Specialists’ Judicial Officer of the Year Award. In February 2009 he joined JAMS as a neutral. On September 

11, 2009, he received the State Bar of California Family Law Section’s Judicial Officer of the Year Award, 

at the annual State Bar Convention.


I thought Haines was a very pivotal case in setting the foun-dation for the legislative enactments regarding fiduciary duties. What once was a very murky area of the law has become much clearer with regard to transactions between spouses, and in particular, the order in which presumptions are analyzed.Q. Given your time at JAMS and your public sector judging, what are the biggest differences you have noticed?

The most immediate difference is the availability of the judicial officer to have settlement conferences, hearings and/or trials. As you know, at JAMS the judicial officer can be ready to assist the parties within a week. Due to the caseload, the public judges just can’t accommodate parties in the same way. Secondly, at JAMS you have an experienced judicial officer that has been working in the family law arena for years. They know the material, as compared to a brand new judicial officer who is new to family law. What I think is also beneficial is that in settlement context, the parties really relish that opportunity to talk formally and informally with an experienced judicial officer about their case.Q. What is the condition of the calendar in San Diego? What impact do you think the state budget crisis will have?

I don’t think the state budget is going to be critical. They are closing down one day a month and I am not pleased, nor are most judges. However, historically speaking, the Presiding Judge of the Superior Court of San Diego County has always afforded the family law courts top notch judges and good resources. For example, take a look at the facilitator’s office. We couldn’t assist as many pro pers as we do unless they were funded. The condition of the calendar does concern me because it takes several months for most departments to have a hearing on a contested matter.Q. I am also interested in the different approaches neutrals take to resolve cases in settlement. What methods do you favor when you settle a case?

I believe the lawyers know the best approach to settle a case. I will give them the option of either an initial meeting with the lawyers alone, or lawyers and parties all together, or just meeting with one side at the outset and then the other side. In that case, I engage in shuttle diplomacy to carry back and forth offers of settlement. I find it critically important that the clients be involved in every aspect of the settlement. I personally will refrain from making recommendations during the initial settlement process. I let the parties and counsel work together. If at the end of the process issues remain, I step in and I will sit down with them and make recommendations to settle the case. That is typically how I handle a settlement.Q. You conducted settlements at the courthouse as well?

Yes, hundreds and hundreds of time.Q. You sat on the bench for all those years; how did the referral to private judging work out?

As a judicial officer I would see a case that cried out for set-tlement and I would suggest the matter be referred to a neutral at JAMS. Candidly, I was confident of a settlement coming out of JAMS. If a case came back from JAMS, I set it for trial. If they couldn’t settle there, I knew it was time to try the case.Q. Did many come back?

Only one. That case was set for a four-day trial. After one full day of trial, one side grabbed the recommendation from JAMS

and happily left the courthouse. I didn’t know what the recom-mendation was, but I guess they didn’t like my body language.Q. How do you look upon the attorney’s role?

I believe the greatest service an attorney provides to a client is the ability to settle the client’s case. The second greatest service is that if the case can’t settle, there is the attorney’s ability to accurately predict what the trial court will do with the case issue by issue. I realize that attorneys don’t have a crystal ball but attorneys that appear before judges numerous times know the proclivities of these judges. In fact this knowledge assists them in pursuing settlement and in trying the case.Q. Two problems that I have seen recently in the private judging area are what happens when there is a failure to pay the neutral’s fees and second, when is the neutral’s appoint-ment over? Let’s say one party doesn’t pay their costs after receiving a tentative bad result. What is the other side to do?

Let’s assume the neutral has been stipulated to for all purposes and a formal order has been signed by the Presiding Judge of the Superior Court. Naturally in those instances, then all motions have to be filed in front of the neutral. If someone is not paying, the litigant should file a motion in front of the neutral.Q. But JAMS will not set a hearing unless the costs are paid upfront. What happens then?

One side can voluntarily advance the costs for themselves and the other party and ask the court to order compliance. The court order appointing the neutral should provide for reimbursement. And under section 2030, costs can always be awarded at the hearing. That doesn’t resolve the situation beforehand for the paying party but it does assure an immedi-ate hearing and potential resolution. Of course, if it became a continuing problem, consideration would be given to establish-ing an account to fund costs and fees. The account could be funded from court ordered liquidated assets.Q. In another case, the spouse received an adverse ruling from the private neutral and he petitioned to return the case back to the public courthouse. Just when does your appoint-ment as a temporary judge end?

In my opinion, the appointment ends with entry of judg-ment or a formal order from the Superior Court terminating the appointment as a temporary Judge.Q. As an appellate lawyer, I am always concerned about the record on appeal. What do you do to insure that the trial proceedings are actually and accurately maintained? There are no minutes. So what do you do to preserve the parties’ appellate rights?

The lack of a minute order for me is not a problem because I write out every single order that I make before I deliver it. If there are disputes about the contents or language of an order, I always have the option of writing the order myself. I have often done that while on the bench or at JAMS. Bottom line, I am not tolerant of delaying the filing of an order for tactical reasons. Secondly, the attorneys always provide a reporter for hearings and trial and there is a full record of everything that transpires. There is a downside to not having a clerk. I have to mark and receive exhibits and keep track of them as well. These are all things my clerk used to do, but I manage.Thanks very much. ■


programs). However, it should also be recognized that for every case taken by a private neutral, the public court will have fewer cases and more time and energy to devote to the cases filed or defended by the poor. As the cases taken by private neutrals are generally the most complex and time con-suming for the court, the amount of public court time freed up is considerably greater than would be expected from the percentage of cases which are diverted to “private judging.” It may even be said, in this time of budget cuts and furloughs in the public sector, that private judging providers are helping to rescue the public court in its time of greatest need.

Judge Catherine A. Gallagher, who recently retired from the Santa Clara County bench and will be joining JAMS in September, served in a family law assignment for three years and most recently served as presiding judge from 2007 – 2008. She advises that the current court budget crisis is expected to last for at least a year and will result in furloughs that will equate to a 5% loss in court time. This loss in court time will especially impact the crowded family law depart-ments. The ongoing economic turndown has produced many more self-represented parties, which will exacerbate this situation.

The Debate: Public or PrivateThe balance of this article will assume no overall prejudice against “private judging” and will examine the decision faced by counsel to either stay within the public court system or to employ a private neutral.

It should be emphasized that this decision may have an immense financial impact on clients. The September 2009 issue of Money magazine reports (on page 113), based on a four-year study by a Boston law firm, the median cost of a case with a private neutral in mediation was $16,000.00, while the median for collaborative divorce was $39,000.00 and the fully litigated case median was $155,000.00.

It should be emphasized that the private neutral versus public court decision is not an all-or-nothing decision. As examples, one can decide to use a private neutral as a media-tor or as a discovery referee or as a consultant, and still permit the matter to stay within the public court and eventually to go to trial there.

Additionally, the decision to actually use a private neutral (and how to use her/him) will depend upon whether the individual case will benefit more from the intensive attention and flexibility of a private neutral or from the less intense approach taken by the public court.

There is no question that a significant number of cases, because of the issues and individuals involved, can be resolved by counsel with little or no assistance from the court. When this type of case can be identified at the outset, there may be little need for a private neutral.

For cases that are not easily resolved, the private neutral should be considered. Most of the benefits of using a private neutral relate to said intensive attention and to the flexibility private neutral proceedings give to counsel in the truly liti-

gated case. Flexibility translates to control of the proceedings by counsel and that, in turn, translates to greater control of the outcome. Control also impacts the ability to regulate litigation costs.

The following are some factors to consider in making the private/public decision:A. If the case is assigned to a particular bench officer in a

direct calendar county, examine whether the assigned bench officer will “fit” with the particular case. Does the case require a bench officer with greater experience, a dif-ferent approach to litigation, or a personality that counsel can deal with? The decision to select a private neutral, in effect, can be the equivalent of a peremptory disqualifica-tion (but even better since you can choose the new judge if you choose to go with a private neutral). The selection of a private neutral may be appreciated by the public court bench officer, since it reduces her/his burden, while a disqualification may be disliked by that judge (who may be assigned some of your other cases).

B. The difficulty or complexity of the legal issues in a partic-ular case may or may not call for a private neutral with a particular talent in addressing these issues.

C. Some divorcing parties get along well and work well together. Others appear bent on starting World War III. In the case with approaching warfare, the intensive attention of a private neutral may be productive if a strong private neutral is selected.

D. As with parties, some lawyers get along well with each other and some don’t! When lawyers are fighting, the case may require real, specific case management with follow-up from a private neutral so that the case can progress at an appropriate pace and not be consumed by lawyer conflict.

E. Referencing “collaborative law” cases in an article of this nature may appear odd. Counsel in collaborative law cases agree, as a matter of course, not to engage in litigation. Nonetheless, it appears that the use of a private neutral as a mediator would not violate the collaborative law contract, particularly as this would be done by stipulation.

The Public Sector CourtLess time is necessary discussing the public court as it is well known to all of us. While procedures vary somewhat from county to county, they tend to be fixed by statute or Local Rule of Court or policies of the individual department. The number of cases that must be handled, by necessity, color every facet of the public court. Some effort is given to case management, but that seldom goes beyond moving cases along at a pre-determined speed (and the speed is often the same for all cases). Settlement Conferences are usually available, but tend to be relatively brief because of the number of cases that must be processed. Court calendars tend to be fixed. It takes time to get before your judge even when your need is urgent, with a few statutory exceptions such as hearings following ex parte orders. Also, due to the sheer volume of cases there is gener-ally pressure to limit the length of hearings.

There is no question that there are many talented, hard-working people in our public courts, but the need to service hundreds or thousands of cases limits their ability to spend



much time on any particular case. The current economic downturn and budget crises may intensify this issue.

The World of the Private NeutralAs stated above, a top attribute of the private neutral is flexi-bility, although to some extent the flexibility is impacted by the need for agreement between the parties on most proce-dural decisions.

There is obvious flexibility in the selection of the private neutral. An individual can be selected with abilities that are specifically needed in the particular case.

There is also flexibility in the use of the private neutral. She/he may be a mediator, an arbitrator, a Judge Pro Tempore for a particular hearing or motion or a Judge Pro Tempore for the entire case. Other possibilities include using a private neutral as a consultant, advisor or a fact finder for a shadow hearing for one party (or both) in the case. The private neutral may be called upon to serve in more than one capacity if that is desired, to hear discovery motions first, for example, then mediation, then trial.

As a caveat, if the private neutral is to be used as a Judge Pro Tempore, he/she will have to be appointed as such by the appropriate Superior Court Judge (usually the presiding judge). While this is an extra step counsel must accomplish, it is normally not difficult. Once the private neutral has Judge Pro Tempore standing, she/he can perform all functions of a judge including the granting of the dissolution (or other) judgment. Trips to the courthouse for “prove-up” hearings and/or the submission of Fam. Code §2336 affidavit judgments to the public court (and fights with court clerks) are avoided.

There is flexibility in the manner in which a particular case may proceed. The parties may stipulate to procedures that are different from statutory procedures or different from Local Rules of Court. Procedures for the use of modern technology beyond that available in the public courthouse can be agreed to, such as electronic exchange of discovery, witnesses’ appearance by video, telephone or electronic conferencing, motions heard by telephone or quasi-e-filing for documents which are not mandated for filing by the court. Communication with the private neutral by e-mail is common, as well as the delivery of briefs, declarations and other documents in a like fashion. Often, disputes arising during a case can be resolved or decided through a confer-ence telephone call with the private neutral. Motions and responses and trips to the courthouse can all be avoided.

Kathryn Brown, a certified family law specialist with Luscutoff, Lendormy & Associates in San Francisco, advised of a recent private neutral case where because of client travel schedules, the hearing commenced in mid-afternoon and went well into the evening (with dinner ordered in). This would not have been likely in the public courts. Moreover, she also indicated clients seem to prepare themselves better for proceedings before a private neutral, whereas they seem to expect counsel to do the preparation for public court hear-ings. She feels the private neutral proceeding in all respects is simply more conducive to settlement as “clients only need one trip to the courthouse” to understand the problems which may be encountered there.

Flexibility in timing and having a case heard more quickly than usually permitted by crowded court calendars is often available. Also, greater privacy is usually available in the private proceeding, although there are limits in this area.

“Confidentiality is a huge factor,” says Mindy Lauren Ross, a Certified Family Law Specialist with Winter & Ross in San Francisco. Mindy appreciates the convergence of flexibility and privacy and says that often in Silicon Valley cases “the flexibility of a private neutral who handles most matters by conference telephone call (not only regularly scheduled case management conferences but also arguments on disputed matters [often by agreement, motions need not be filed]) produces progress in the case without the filing of any public documents.”

A proceeding before a private neutral usually occurs in an office-like setting with additional conference rooms available for parties to caucus privately with their counsel. If agreed, counsel’s office can be the scene of some proceedings, often-times avoiding the difficulties of trying to resolve a matter in the hallway of the courthouse.

“A judge who is available promptly as scheduled and who sits down with the clients and talks personally with them and their attorneys about their case is something that clients just love – and the truth is that happy clients are more likely to settle,” stated John Manoogian, a Certified Family Law Specialist in Walnut Creek, California.

There is flexibility in case management. Too often case management in the public court is limited to setting a trial date and possibly a few discovery dates. Case management before the private neutral can be as flexible as the case requires in order to produce an appropriate result. Many private neutrals work with case managers who make follow-up calls to be certain set deadlines are met. Telephone calls to confirm you received your discovery in a timely manner (after the discovery was ordered by the private neutral) are not uncommon, as well as other follow-up procedures to keep a case moving on schedule.

Cost: The Elephant in the RoomThe court costs involved in the public court proceeding are well known to us and are not a significant part of overall expenses.

Cost is a more sensitive issue in the use of private neutrals in family law than in other civil litigation. Family law proceedings are generally limited to two parties to share the cost and there are no corporate or insurance company resources to help with the cost. Parties cannot select a private neutral unless there are resources available to advance the costs.

There is no question that there are out-of-pocket costs incurred when a private neutral works on a case, but there are also factors present in the private neutral proceeding which lead to the saving of costs which unavoidably occur in the public court proceeding.

The proceeding in the public court, by necessity, includes “nonproductive time” which is charged out by counsel. Each trip to the courthouse includes driving time, searches for

Continued on page 44 (Libbey)


BartelmieContinued from page 13

order governed by Section 3800 et seq. of the Family Code. Marriage of Stallworth, supra, 192 Cal. App.3d 742, 748, provides that where “economic circumstances warrant,” courts have discretion to delay the division of an asset, giving one party interim exclu-sive use until it can feasibly be sold and the proceeds divided.

More recently, economic circum-stances have created an interest in deferring the sale of the family resi-dence independent of the obligation of support. The deferral of the sale of the family residence may be an independent integral part of the division of the com-munity property.

Attorneys, mediators, collaborators and couples are looking at protecting their investment in the family residence as well as considering their children’s welfare. The statutory scheme does not preclude deferred sale orders on what-ever terms and conditions are stipulated to by the parties. The deferred sale of home order can be a significant nego-tiating point. Marriage of Braud, supra, 45 Cal. App.4th at 816, footnote 18. Couples are looking at retaining owner-ship of their family residence, so that it can hopefully be sold for a profit in the future, and at the same time 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 foreclo-sure proceeding. Or, one of the parties may need time to acquire the ability to purchase the other party’s com-munity 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.

When the parties agree to consider a deferred division of their family resi-dence, they should review and consider the following:1. Record a new Deed identify-

ing each spouse as a Tenant in

Common as to an undivided one-half interest each. There are two very important reasons to convert the title to Tenancy in Common: (1) This form of title allows for each party to include and dispose of their community property share of the asset as they wish in their estate planning, and (2) it protects each party’s undivided one-half ownership interest from becom-ing an asset of the bankruptcy estate under the jurisdiction of the bankruptcy court should one of the parties file for protection from creditors in a bankruptcy proceed-ing during the joint ownership. Marriage of Stallworth, supra, 192 Cal. App.3d at 747, footnote 2. In the context, where the parties have a mixed asset family home. The out-spouse has made a substantial separate property down payment. The parties should consider award-ing him or her a percentage owner-ship interest. The separate property share and the community property shares of the deferred sale pro-ceeds will include appreciation and depreciation in the value of the home during the deferral period. To effect this result, the reformed deed will recognize the parties as tenants in common as to an unequal ownership interest. The one party with the separate property/community property interests, and the other party with a community property interest, set forth on the deed, and with language providing for payment of the sales proceeds in the unequal proportionate amounts. Or, if there is a buy-out option, then to calculate the proportionate inter-est when determining the net buy-out amount. Marriage of Braud, supra, 45 Cal. App.4th at 821 and footnote 25.

2. Provide for the exclusive use, pos-session and control of the family residence by one of the spouses. The party who is living perma-nently in the home is the in-spouse or resident spouse. The other party is the out-spouse and may retain the right to come to the residence for parenting duties, maintenance

or repairs on the property, all subject to advance notice to come to the residence, unless to imple-ment the defined parenting plan. The parties may mutually agree on how to share the possession of the residence, including keeping the possession exclusive to the resident spouse. Or, the spouses can choose to alternate exclusive possession of the family residence defining their shared exclusive possession. For example, the parents alternate one-week intervals in the home. This has been referred to loosely as “bird nesting.”

Under current tax law, the out-spouse can continue to consider the deferral of $250,000 of gain on the family residence so long as this residence continues to be the primary residence for the out-spouse, and in spite of the exclusive possession of the family residence by the in-spouse. This is a limita-tion to be considered by the out-spouse. He or she is unable to own another primary residence, until after the sale of this family resi-dence to preserve the ability of the out-spouse to apply the $250,000 exclusion against gain on the sale of the family residence. For purposes of the IRS Section 121 exclusion, the out-spouse is treated as using the property as his or her principal residence during any period of ownership that the other spouse is granted use of the property under a divorce or separation instrument. IRC Section 121(d)(3)(B)

3. The parties shall determine support and the obligation to maintain the principal, interest, taxes and insurance connected to the family residence. This arrange-ment can create a mutual tax advantageous situation, whereby the in-spouse pays the mortgage and taxes, and the out-spouse pays family support to resident spouse. The in-spouse must include the family support as income for the annual income tax return, and the out-spouse deducts the payments from gross income for the annual income tax return. The in-spouse will write-off the deductible inter-


Continued on page 39 (Bartelmie)

est and real estate taxes from the family support received to reduce the total amount of income on the annual income tax return. The parties may review this approach with a CPA to maximize the mutual income tax benefit of using family support. Family support is unal-located combined spousal and child support, and is fully deductible provided that it meets all of the requirements for spousal support deductibility. The obligation to pay family support must terminate on the supported spouse’s death. IRC Section 71(b)(1)(D) No part of the family support payment can be fixed as child support, or reduced or terminated on a contingency related to a child. IRC Section 71(C)(1) and IRC Section 71(c)(2)(A). Or, the parties can use a more traditional Guideline approach to support, and make any mutually agreed adjustments for the princi-pal, interest, taxes and insurance, which will mutually benefit the parties.

4. The parties should compare and contrast the monthly fair rental value of the home against the monthly cost of the loan principal, loan interest, taxes and insur-ance (PITI) amount. If the PITI payments are greater than the fair rental value, then consider options for sharing these expenses. For example, the out-spouse may make the tax payment and write-off this expense on the annual income tax return, or share a percentage of all the expenses, and take the appropriate expense for income taxes where appropriate. The amount equal to one-half of the difference between the monthly Fair Rental Value and the PITI could be deducted from the support each month or deferred and reim-bursed out of escrow on sale, or as a credit for the buy-out formula. The parties may meet with a CPA to find the best tax appropriate assignment of these payments with a consideration for the use of family support, assigning dependents, and other support options. Or, the in-spouse may delay a monthly

reimbursement to compensate for the monthly overpayment of the PITI compared to the monthly fair market value to be paid out of escrow on the sale of the family residence, or as part of the buy-out formula instead of a listed sale.

If the monthly fair rental value is greater than the monthly PITI payment, then the amount equal to one-half of the difference could be added to support or deferred and reimbursed out of escrow on sale or as part of the calculation for a buy-out formula, or as a deduction to the monthly support. See Fam. Code Section 3806, Marriage of Stallworth, supra, 192 Cal. App.3d at 749.

Whether to grant a net fair rental value offset against child support lies within the discretion of the court. Fam. Code Section 4057(b)(2).

5. Define the term of the tenancy in common. The parties may have a “look and see” approach for the rapidly changing value of the real estate market during the joint own-ership. The parents may consider continuity and consistency for the children based on their ages; or to allow a child to complete their edu-cation at the same school; and to allow a child to complete an activity in the neighborhood. The parties may agree to provide additional time to allow one party to develop the ability to pay for the other party’s community interest in the home in a “buy-out” arrangement for division of the family residence. They may need the time to provide for the opportunity to negotiate with the bank to define and work out a new loan, which more accu-rately reflects the current market value of the home in lieu of a fore-closure action. It may be that one of these topics, or a combination of these topics, will drive the couple to consider deferring the division of the family residence. A very impor-tant consideration for the parties is that when one of the parties would not be able to qualify to buy a home on the open market, but would be able to purchase the other party’s

interest in the family residence in a reasonably short period of time, and thereby become a home owner by arrangement between the parties. The ability to have this opportunity also will benefit their children by promoting the consis-tency and continuity of living in the family residence, keeping the same neighborhood friends, schools, and church.

6. The in-spouse will maintain the property in the same condition as when the Marital/Mediated Settlement Agreement is signed subject to normal wear and tear. The parties may consider hiring someone for the maintenance of the landscaping or pool. The out-spouse may be on a defined schedule to provide some main-tenance service at the family residence that had been provided in the past, and is desired by the parties to continue until the home is divided. The parties may wish to factor the cost of these services in the support analysis, or as a reimbursement to be paid out of escrow on sale or as part of the buy-out formula calculation. The parties may elect to reserve juris-diction on the issue of maintenance. This is mandatory under Fam. Code Section 3809 when the court is requested to make a deferred sale of home order.

7. The maintenance and repair expenses can be shared by mutual agreement to be defined between the parties. For example, the In-spouse will take care of all repairs and maintenance items that cost less than $200, and the parties shall share equally the cost of repairs and maintenance above $200 by mutual agreement. If one spouse is financially unable to contribute to the repair and main-tenance costs as required, then the other spouse shall pay and be reimbursed out the escrow sales proceeds, or as otherwise decided by the parties, or as a factor in the buy-out formula, so that the residence can be maintained and repaired when required.


BooneContinued from page 15

income available for support calculation purposes pursuant to Fam. Code § 4058 even if that number is independent from and differs from what amount is actually received by or avail-able to the respective parent? The certified software programs need the input of reportable taxable income in order to deter-mine the amount of taxes that will be paid but these amounts may be distinct and independent from the “cash” income that will be available from pass-through entities. The soft-ware offers no explicit input fields to allow for the difference between reported income tax calculation purposes and actual cash flow. Remember that in hypothetical scenario #1, Father owns a fractional non-controlling interest in the limited part-nerships and does not have the right and ability to change the cash distribution policies of the limited partnerships in which he holds a fractional interest.

Hypothetical Scenario #2Assume the same facts set forth in Hypothetical Scenario #1, with one exception. Assume that instead of a fractional non-controlling interest, Father owns a controlling interest in the limited partnership investments. Given that he has control, should the taxable income be considered a proper measure of income available for support even though cash distributions were limited to 40%, given that he could use his controlling vote to cause the partnerships to increase cash distributions to 100% of reported income? What if it is reasonably determined that the business operated by the partnerships needs to retain the earnings to reinvest for growth in order to remain competi-tive in their industry? Alternatively, what if the partnerships are building up excess cash and it is reasonably determined that there are no growth related investments that are neces-sary to remain competitive?

Hypothetical Scenario #3Assume the same facts set forth in Hypothetical Scenario #2, with these exceptions: assume that instead of ownership of limited partnership interests, Father owns a controlling interest in corporations that do not require their sharehold-ers to report their share of income on their personal returns and that no dividend/distribution is made to the shareholders. Other than the form of organization and the decision not to distribute cash in scenario #3, assume that the corporations are identical to the limited partnerships in Hypothetical scenario #1.

Hypothetical Scenario #2 and Hypothetical Scenario #3 are identical with the only exception being the form of own-ership and the tax reporting requirements. However, how should income in each scenario be input into the support soft-ware? Should we ignore the actual cash activity in scenario #2 and only input into the software the amount required to be reported for tax purposes regardless of the cash distributed? In scenario #3, if we look to reportable taxable income as the definition of income for support purposes, the result would be $0 of income despite the fact that the corporation was under control of Father and had generated earnings.

Family Code § 4058 refers to business income in its definition of income: income from the proprietorship of a business, such as gross receipts from the business reduced by expenditures required for the operation of the business. Section 4058 also includes dividends as an example in its definition of income but does not list or include “distributions from pass-through entities” or ‘’reported taxable income from pass-through entities.” Does Section 4058’s reference to proprietor-ship of a business include investment in pass-through entities such as limited partnerships, limited liability companies, or pass-through (sub chapter “S”) corporations? For tax purposes, a “proprietorship” is a business owned and operated by an indi-vidual that is not formally organized as a separate legal entity.

Family Code § 4053Family Code § 4053 sets forth principles that the courts shall adhere to in implementing the statewide uniform guidelines for child support. Paragraph (c) of section 4053 says that the guideline should take into account each parent’s actual income and level of responsibility for the children. Notice that paragraph (c) does not say that the guideline should take into account each parents reportable taxable income, but rather that it should take into account “actual” income.

Paragraph (d) of section 4053 says that each parent should pay for the support of the children according to his or her ability. In Hypothetical Scenario #1, Father does not have the ability to pay support based upon the reported taxable income from the limited partnerships because distribution of cash was only 40% of the reported taxable income and Father was only a non-controlling fractional owner. However, one could argue that in Hypothetical Scenario #2, that the element of control might suggest that the ability to distribute all of reported earnings and therefore that, according to Fam. Code § 4053 (d) all of the reported earnings should be included as available for support.

Paragraph (e) of section 4053 says that the guideline seeks to place the interests of children as the state’s top priority. Is the guideline putting the children’s interest first if inter-pretation can force a Father in Hypothetical Scenario #2 to distribute earnings even though retention of earnings in the business may be important for the strategic long-term survival? Is the guidance putting children’s interest first if interpreta-tion can allow a father to retain earnings in a corporation that does not require pass-through reporting on the personal return when there is no justifiable strategy that would require earnings retention?

Lastly, Fam. Code § 4053 paragraph (j) says that the guideline seeks to encourage fair and efficient settlements of conflicts between parents and seeks to minimize the need for litigation. The current lack of guidance and clarification related to the treatment of income from pass-through entities is inconsistent with paragraph (j). The lack of guidance related to the treatment of retained income in parent controlled corporations that do not require pass-through reporting of income on personal returns and that have not paid dividends is inconsistent with paragraph (j). There can be significant litigation surrounding the question of whether or not a parent has control of a certain business that is retaining earnings and


if control is attributed, should earnings that are being retained in the business be considered income available for support and included in the guideline formula. There can be significant litigation surrounding the question of inclusion in the guide-line formula of reported taxable income from a pass-through entity even though no distributions or lesser distributions are made.

With all due respect to attorneys and judges, I have encoun-tered those that do not understand or refuse to recognize that amounts reported on tax returns are not necessarily amounts received either actually or constructively by the taxpayer. Shouldn’t the guidelines, at a minimum, address this issue by more clearly defining the proper considerations when these circumstances are encountered? Shouldn’t the Judicial Council forms and software certification examples set forth by the Judicial Council provide these circumstances so that the written guidance and software input fields provide for the fact that reported income that is necessary for input for proper tax calculation purposes does not necessarily represent cash that was received, distributed to or available for distribution to the parent. In Hypothetical Scenario #1, one method of input into the support software programs would result in a calculation of net spendable income that is far less than actual (the method of entering all pass-through income as available for support without adjustments to non-taxable to provide for the fact

that not all reported earnings were available) while the other (including an adjustment to nontaxable) resulted in a calcu-lated net spendable income that is consistent with the cash actually distributed and the actual tax liability. The need for this adjustment is not always recognized because the Judicial Council Forms and the support software do not offer straight forward guidance for such a circumstance.

Endnotes:

1 Pass-through entities are limited partnerships, IRC sub-chapter “S” corporations, and limited liability companies that require the individual partners, shareholders and members, respectively, to report a pro-rata share or stated share of the companies earnings on their personal tax returns regard-less of whether or not there are related distributions of cash made from the entities to the limited liability owners. In some instances, the parties may have a controlling interest or may be, de facto, in control such that they can effect the decision regarding income distributions but often the ques-tion of distributions is completely out of the limited liability owner’s control.

2 I have assumed no itemized deductions for either party in our example to simplify the example. ■

sistency and as “the only rational option available to us to adequately address budget realities” and to obtain about $90 million in savings from all areas of court operations. Though it has not been widely reported, Justice George reported that a large majority of judges and justices around the state are either waiving salary one day a month or making a personal donation to their respective courts.

In reply to some criticisms of the AOC, including from those within the Judicial Branch (and from local judges and court personnel, including my own Nevada County Superior Court and local Bar), Justice George pointed out that the growth of the AOC was not simply a result of court unification and consoli-dation. In that process, “the AOC has assumed nearly all of the court manage-ment functions once performed by the counties. These include statewide finan-cial and accounting services, computer systems and technological support, human resources, and a great number of legal services ranging from represen-tation in lawsuits to contracts.”

In fact, perhaps one of the most “core functions” of the court system was also transferred to the AOC in 2002: responsibility for court facilities, totaling 18 million square feet of buildings that suffer from deferred maintenance or need replacement. Justice George also noted that “the AOC’s budget, excluding courthouse facilities management, is a small fraction of the allocations avail-able to the courts – just over 3.5% of the total judicial branch budget.” The AOC remains the only state judicial adminis-trative office in the nation responsible for all facilities planning and main-tenance, an entirely new role for the Judicial Council and the AOC.

“Compared to its counterparts in the federal system and in many other states, proportionately to population, California’s AOC does much more with far fewer staff,” according to Justice George. Com-menting on the much-criticized court computer case management system, the Chief noted that, though the existing systems crash frequently and the new system is being installed, $105 million was diverted from the installation budget to support trial court operations.

Finally, Chief Justice George called

upon the Bar to continue to work with judicial officers to improve the Judicial Branch and the legal profession, to pro-vide the best legal services to the people of California. As he stated in the Family Law News interview, Justice George constantly encourages those who provide pro bono efforts and do legal services work. At the State Bar, he again hosted the pro bono Awards ceremony. But his appreciation also encompasses “. . . many thousands and thousands of volunteer hours being worked, and worked hard, by all the other lawyers who are not winning awards. . . .”

Though these tough economic times provide survival challenges to all lawyers, from solos to large firms, we who work in family law cannot ignore our duty to help those who have no resources to pay for legal services when we can. Whether this means a donation to the Equal Access Fund, assisting as a pro tem or settlement judge, donating some time at the Facilitator’s office or assisting a particular client or organi-zation without charge, now is the time for each of us to live up to our highest aspirations. Our Chief Justice provides both a catalyst and an inspiration. ■

BellContinued from page 3


CrawfordContinued from page 17

constitutes an irrevocable election to give up increased payments in the future that might accrue due to increased age, longer service, and a higher salary. In short, the court said that if wife chooses immediate payment instead of waiting for husband to retire, she forfeits her right to share in any future increase in the value of those benefits.” 7

Vargus took a breath. “And, not surprisingly,” he continued, “you’ll find exactly the same concept in Justice Mosk’s summary of Gillmore, with which he opened his opinion in Cornejo.8 And in fact, there is not as far as I could find a single reported case in which the court has held that the non-employee spouse is entitled to have her benefits determined under Gillmore as of a date other than the early retirement eligibility date.” 9 He paused again. “Oh, I take that back. Actually, there is one exception to that.”

“What’s that?”“Well, if by the time of trial husband

has already become retirement-eligible, then the cases say that wife’s compen-sation is to be determined as of the date of trial.10 So reason number two – case law has never allowed wife to cherry pick her time to elect Gillmore in order to increase the value of her share of the benefits.”

“Got it, except that I’m not sure I understand the time of trial thing.”

He looked around. “I guess this is as good a place as any to talk about Marriage of Castle,11 which is the only case to specifically address what happens if husband becomes eligible to retire before the trial on the dissolution. In that case, wife sought to defer her Gillmore motion for a few years after trial in an attempt to take advantage of the increased benefits he was earning as a result of his decision to remain employed. The court said no, her only choice was between having her inter-est determined as of the date of trial or waiting until he actually retired.”

Vargus paused to pull out some creased papers from his jacket. “I thought you might want to hear the court’s very words on this point,

so I brought along a copy of the case. It’s pretty short.”

The arguments Beryl [that’s the wife] raises on her cross-appeal rest on a misconception of the Gill-more principles. The cases do not permit the nonemployee spouse to elect between (1) the present value of the retirement were husband to retire at time of trial or (2) the value of such retirement at some later time when husband becomes entitled, because of longer service, to a higher pension.12

“Okay, point taken Vargus. Basically the deal is that if wife elects to declare the benefit mature under Gillmore, then the effective date of maturation is going to be the later of the date husband became retirement eligible or the date of trial. And since a matured interest does not continue to grow, the actual date the election is made is not going to change the amount payable, even though Cornejo says it will set the date as of which husband’s obligation to pay arises.”

“Pretty much.”“What a rook!” I exclaimed.“Actually, its entirely fair!” said my

friend, a little miffed that I didn’t see that clearly. “Wife always has the option to stay in the plan and continue to fully benefit from husbands’s decision not to retire early. She just can’t have her cake and eat it too.”

“No, Vargus, I agree it’s fair. What I was referring to was that unusual black bird that just landed near Andy over there,” I said, pointing. “I didn’t know there were any rooks around here. Charlie must have brought in some by accident when he imported all the stonework from France.”

“Oh,” said my friend.“So what’s your third reason, Vargus?”“Well, for that we need to revisit our

old friend Lehman,13 since it was in that case that the court finally explained the reason why, notwithstanding the general rule that all post-separation earnings are separate property, a non-employee spouse is entitled to share in any benefit enhancements earned post-separation by the employee spouse.”

I brightened. “That one I remember. The court said that because the non-employee is compelled to share in the

risks associated with the employee’s freedom to define the pension as he wishes, she must also share in the rewards.” 14

“Right, Frank. Now, with that prin-ciple in mind, wouldn’t you agree that if wife waits to make her demand to have her payments calculated under Gillmore rather than when he retires, then any risk to her interest as defined under Gillmore is voluntary, rather than compulsory?”

I nodded, sagely.“So under Lehman too you get to

the same spot, as did Gillmore and Cornejo. If wife wants to take under Gillmore, she can get immediate payment based on how husband’s benefits were defined at the time he became retirement-eligible. If she waits to ask for her interest under Gillmore, then for purposes of determining the amount she is to be compensated as a result of husband’s decision, her volun-tary assumption of the risk during her delay does not entitle her to continue to share in any benefit improvements he might earn by not retiring early. If she wants to do that, then Gillmore is not available to her, and she is compelled to take the risks that justify sharing in the rewards of waiting to have her interest defined when husband actually retires.

Pausing to finish his last drink, Vargus continued. “So, as I said earlier, in my case, wife really goofed when she waited four years to assert her Gillmore rights. But of course, losing out on the value of four years’ worth of payments wasn’t her only mistake.” He picked up his empty glass. “I’m getting a little dry, Frank. Do we have time for another?”

“Sure.”“Where’s that Andy fellow?”I signaled to my former employee,

who was over enticing a flock of rooks down from the elm tree to roost on Charlie’s pride and joy – an authentic-looking suit of armor that he hand-polished every single morning. The stale rolls he was throwing around had already drawn a pretty large and incredibly raucous grouping.

“You need something, Mr. Frank?” Andy called over the din.

“Yes, Andy, can we have one more round?”



“You betcha. Back in a wink. I was just havin’ a little fun with the boss’s statue here.”

“Nice kid,” said Vargus. “Now, as I was saying, wife’s other error was to assume that her Gillmore election entitled her to get the same payments she would have received if husband had actually retired.

“Also not true?” “Nope. Although Gillmore estab-

lished that a court may order an imme-diate payment of wife’s interest when husband decides to delay the natural maturation of his benefit, that case did nothing to change the fundamental principles that were laid down long ago in Brown as to how such interests are to be determined and paid. Do you remember?”

“I think so. Under Brown, the non-employee spouse is entitled to payment of the actuarial present value of her interest, determined by taking into account all relevant factors, including the risk that the benefits may not ulti-mately be paid.15

“Good, Frank. Now, while there are some well-funded plans under which there may be no practical difference between the payments wife would receive from the plan if husband took early retirement, and the actuarial value of those promised benefits for purposes of calculating a Gillmore buyout, in my case the difference was rather stagger-ing. According to my actuary, because the plan was unfunded and payment was subject to a number of other risks and contingencies specified in the plan document, wife’s payments under Gill-more would have been only about 30% of what was promised husband under the plan if he took early retirement.”

“Wow. I don’t suppose you know of any post-Gillmore case law where this issue came up?”

Andy had returned with our drinks a minute or two earlier, but was making no move to leave. “Mind terribly if I listen to you two avocats for a minute? This place is dead, and I really enjoy hearing about legal stuff. I’m going to law school, you know.”

“Sure Andy, have a seat,” I replied with a sigh. “You might as well learn about this right along with me, although I warn you, it’s pretty tough

even for an experienced family law attorney like me.”

“Gee Whillikers! Thanks, Mister Frank.”

Vargus, who was already half way through his freshened libation, and obviously relishing the doubling of his audience, reached again into his coat and produced three more sheets of paper. He placed them on the table. “Andy, why don’t you read this section from Marriage of Shattuck for Frank here, starting with the word Gillmore?” Vargus said, pointing.

Andy reached over and picked up the case. “Are you guys talking about Gillmore?” he said excitedly. “Heck, I’m doing my law review article on that case.”

“Great to know, kid. Now read, and skip the cites if you will,” said Vargus, a little impatiently.

“Okay,” said Andy, “here goes: . . . Gillmore, which beyond any doubt is the latest and leading case on the subject, provides that upon dissolution of the parties’ marriage, Doris was entitled to immediate distribution of her community property share of Karl’s pension fund. That distributive share con-sisted of an amount equivalent to her interest therein. The court did not create a fiction that Karl be deemed to have received his monthly pension payments, and was therefore bound to pay over to Doris her community property share of them. Gillmore says no more than that: “If he does not wish to retire, he must [upon dissolution of the marriage and her demand] pay her an amount equivalent to her interest.16

Do you want me to read more?”“Yes, please,” said Vargus, “the next

paragraph.”Andy continued: Upon determination of Doris’ present community property inter-est in Karl’s pension fund, its value will be affected by its inherent uncertainties such as the parties’ probable life expectancies and their health, and the fact that an early death might preclude any pension payments at all. It will embrace everything that has

reasonable relevancy to the expec-tancy’s present value. The judicial concern will be the “present value of pension rights.” And it is settled that such present value will be actuarially determined, among other things, by considering the retirement benefit’s uncertainties. The search will be for the “actuar-ial current value of the benefits.” 17

Andy put down the papers. “So in other words, just because a benefit might be mature under the Gillmore definition does not necessarily mean there are no uncertainties affecting its value?”

We nodded, somewhat impressed.“And if that’s true,” Andy went on,

“then wouldn’t it also be true that if the uncertainties were too many to permit a valuation, then Gillmore is not going to be available even if the employee has reached his earliest retirement age, so that the benefits will have to be split as and when they are paid?”

Even more impressed, Vargus replied, “Good question, Andy, my boy, and I think you are spot on! After all, the Gillmore court was very careful to point out that compensating wife by forcing a buyout of her interest was pos-sible because the trial court knew the value of that interest, and there were no uncertainties that under Brown would prevent it from dividing the present value of husband’s pension rights. However, given that the uncertainties in vesting and maturation that Brown was talking about as possibly preclud-ing a valuation included everything that might happen to the benefits up to the time the employee actually retired, it stands to reason that a benefit could be mature under the Gillmore definition and still too uncertain to value.18

Turning back to me, Vargus added, “By the way, Frank, Andy here has put his finger on the very reason I agreed in my case to let wife out of her Gill-more motion. I had a real question in my mind as to whether the benefits promised were so plagued with uncer-tainty that the court might throw up its hands, cite Brown, and say wife is going to have to wait to get her share in each payment if and when it is made by the plan; i.e., no Gillmore.



“Mr. Vargus, sir. Can I ask you some-thing about qualified plans, since I hear tell you are the expert?”

“Shoot!”“Well, speaking of Gillmore valua-

tions, I’ve been learning about early retirement subsidies, and it is not clear to me how, if at all, those should be taken into account, given that the employee, by definition, will have already decided against early retirement?”

“Okay, guys, before you two egg-heads go into that, remind me again what we are talking about,” I inter-jected, starting to feel like the third wheel in the conversation.

“It’s very simple, Mr. Frank,” explained Andy. “When you start receiving benefits early, your lifetime payments have to be reduced because they would be projected to be paid over a longer period of time. That reduction is called an actuarial adjustment, and it ensures that the employee will receive an income stream of equal actuarial value regardless of when you turn on the spigot. For example, a lifetime benefit of $100 per month payable start-ing at age 65 might pay only $50 per month if the employee elects to retire and commence benefits at age 55. Now, if instead of $50, you were to retire early and receive $75, then the plan is said to pay a retirement type subsidy of $25 in addition to the $50 benefit. Right Mr. Vargus?”

“Right, my boy. But in order to address your valuation question, we need to understand also that an early retirement subsidy does not become a part of the employee’s pension – that is, it does not become a part of his accrued retirement benefit – unless and until he satisfies the plan’s condition prece-dent for providing that enhancement, which is that he must voluntarily retire earlier than normal, giving up both his salary and all other enhancements he might otherwise earn by continuing his employment.19 Thus early retirement enhancements are fundamentally no different from other forms enhance-ments offered under a plan, such as those provided in return for additional

service or higher compensation.20 The condition precedent to accrual might vary, but it is always true that the ben-efits are not actually enhanced until whatever condition applies is satisfied.”

“Got it,” said Andy. “The employer says ‘you can retire early and I will increase your benefit, or if you continue to work, I will increase your benefit, maybe not as fast but maybe more in the long run as you earn additional service and compensation.’ ”

That sounded right to me, but I said nothing.

“Okay then. Have you read Lehman, Andy?”

“Yes, sir?”“Well, then you know that in Lehman

the fight was over an accrued enhance-ment that Mr. Lehman acquired by accepting the plan’s offer of an early retirement subsidy. Right?”

“Right,” said Andy.“So do you think that if Mr. Lehman

had decided not to add that enhance-ment to his benefits he would have had to compensate Mrs. Lehman for her quote unquote loss?”

Andy pondered a moment. “Gosh, Mr. Vargus, I wouldn’t think

so. Lehman was very clear in saying that both spouses must bear the results of the decisions the employee makes in defining his benefits, whether they are good or bad, which wouldn’t be true if Mrs. Lehman had a right to be compensated if her interest is not maximized.” 21

Vargus nodded. “Right you are. And remember that to help make this point, Lehman quoted extensively from Olivo,22 a New York case in which the court said that what the community owns is a right to share in the benefits as they are ultimately defined, such that wife is entitled to share in any enhancements that are added, but has no grounds for recovery for any that are not. So if Mr. Lehman had elected not to enhance his benefit by retiring early, that particular enhancement would not have been a part of his benefit as he defined it, and with no one owning that increase, there simply would have been nothing to fight over.23 And the same of course is obviously true for all of the other potential enhancements that were not included in his retirement

because he chose not to work another ten or fifteen years.”

Andy looked thoughtful again. I stared at the rooks that were still gathering in increasing numbers on Charlie’s prized armor, trying to soak it all in.

Andy was way ahead of me. “Mr. Vargus, I can think of another reason why that is the correct analysis.”

“What’s that you said, Andy?” said Vargus, obviously having trouble hear-ing over the loud cawing emanating from across the yard.

“Well,” said Andy, “I think that analysis makes sense from a practical perspective also. If, under Gillmore, wife has a right to be compensated for what she could have had if husband had enhanced his benefit by retiring early, how is she going to prove her loss? Sure, she can show what the value of the subsidy would have been, but how can she show that this is less than she would have received as a result of husband’s continued employment, but for her election to cash out early under Gillmore?”

“Good point, Andy,” I said, trying desperately to insert myself back into the conversation.

It didn’t work.“Now with all that in mind, Andy,

I assume you can answer your own question regarding the impact of an early retirement provision on a valua-tion of wife’s interest under Gillmore?”

“You bet! It has to be zero. That enhancement is not a part of husband’s benefit because he did not take early retirement before wife made her motion. If wife wanted to share in what husband has when he actually retires, she can’t do that by electing Gillmore. She would have to stay in the plan, for better or worse.” Andy chuckled at his own pathetic attempt at family law humor.

“Excellent, Andy,” Vargus laughed. “Now, let me ask you this: In determin-ing the actuarial present value of wife’s Gillmore interest, should income taxes be taken into account, and if so, how?”

“Wow, I’ve been wondered about that one too, Mr. Vargus. When I asked my tax professor, she said that most likely the buyout would be treated as a non-taxable transfer incident to divorce under 1041 of the Code, and



gave me an IRS private letter ruling to that effect.24 She also said that there was a recent case, I think it was called Dunkin, in which the Ninth Circuit held that the payments were not excludable from income by husband as deemed pension payments to wife.25 ”

“So what do you think?”Andy glanced over at the huge

flock of birds that were now in a full feeding frenzy over the pile of stale rolls he had put out by the armor. “I think the court should reduce the payments for taxes because otherwise wife would be receiving funds tax free at husband’s expense, funds that would be taxable to her if paid from the plan.26 ” Andy looked up. “And if I remember correctly, Gillmore indi-cated that taxes were a consideration, did it not?”

“It did, Andy.27 And I agree with your reasoning. In family law there is what we call the “immediate and specific” rule, which basically says that unless the tax would be immedi-ate and specific but for the division, the trial court has the discretion to take taxes into account or not.28 For example, in the Nelson case the court found that the trial court properly exercised its discretion to tax-adjust the buyout to ensure an equal divi-sion when circum stances required all of the parties’ deferred compensation, in that case stock options, be awarded to husband – exactly the kind of situ-ation that arises when Gillmore has been elected.29 However, you should know that there has been at least one case in which the court refused to make the adjustment on the stated ground that husband’s Gillmore pay-ments are taxable to wife rather than to husband,30 exactly the theory that Dunkin has since rejected. So if you write your review, you might want to mention that case also.

“Can I butt in here?” I asked.They both looked at me but said

nothing.“Whose tax rate should be used for

the adjustment? Husband’s, because he is paying tax at his rate on the funds used for the buyout, or wife’s, because her rate would have applied if she had received the funds from the plan?”

“Don’t know, Mister Frank,” the little know-it-all piped in. “My guess is there is no right answer, so that will be up to the sound discretion of the trial court,” said Andy, leaning forward to rise. “Guess I’d better get back to wor . . .”

He was interrupted by a loud scream coming from across the courtyard. It was Charlie. Standing in the cold rain, he was staring red-faced at his once gleaming armor, on which no fewer that fifty crows were perched atop a sagging white mess of droppings.

“Who di’ dis!” he yelled, holding up some of the soggy bread Andy had put out for the birds. No French accent now.

“Haven’t a clue, Charlie.” I called back as we all stood up. “Got to go, Charlie. Put our drinks on my tab, will you?”

I thought Andy was going to be okay keeping a straight face, but then one of the circling crows managed to hit Charlie’s red satin hat with an audible plop, and Andy just lost it. In fact, the entire lunch crowd was laughing.

Charlie became apoplectic.Vargus winked at Andy and whis-

pered, “If you ever need a job, you just call me. I could use a bright young man like you as a summer intern.”

Andy smiled, and then rushed over to try to calm his boss.

The author gratefully acknowledges the contributions of R. Ann Fallon and Bonnie Riley to the editing of this article.

Endnotes:

1 The QDRO Reader, Chapter 5, see ACFLS 2008 Spring Newsletter.

2 Id.

3 In re Marriage of Gillmore (1981) 29 Cal. 3d 418; hereinafter Gillmore

4 In re Marriage of Cornejo (1996) 13 Cal. 4th 381 (hereinafter, Cornejo). In Cornejo, court held that husband’s obligation to compensate wife does not arise until Gillmore motion is filed, and thus wife’s delay in filing caused her to lose the value of the four years of payments she could have received by making her election at the time

husband decided not to retire after becoming eligible to do so.

5 “[A benefit does not] ‘mature’ until [the employee spouse] reaches retire-ment age and elects to retire.” In re Marriage of Brown (1976) 15 Cal. 3d 838, 842.

6 “A retirement benefit ‘matures’ under Gillmore when the employee has an unconditional right to payment, i.e., all the ‘conditions precedent to the payment of the benefits have taken place or are within the control of the employee.’ [Citations omitted, emphasis added.]” Gillmore, p. 429, FN 2. Note that this departure from the Brown definition was essential to the court’s holding because the community inter-est in benefits becomes protected against loss due to the employee spouse’s employment decisions only when they have matured. In re Marriage of Luciano (1980) 104 Cal. App.3d 956, 961 FN3 (“Prior to the maturing of the pension the employee spouse retains the right to define the nature of the retirement benefits owned by the com-munity (see Brown, supra, 15 Cal. 3d at pp. 849-850)”) According to Brown and Lehman, the risks that a benefit will be lost before it matures are necessarily shared equally by all who have an inter-est in the outcome of the employee’s decisions, including the community interest held by the non-employee spouse. Brown, p. 848. Lehman, p. 179.

7 Gillmore, p. 429, FN 9

8 “In brief, the employee spouse has an initial choice of retiring or contin-u ing to work. He is not permitted, how ever, to adversely affect the non-employee spouse’s share by putting off his retirement. To prevent such an outcome, the nonemployee spouse too is allowed a choice. If the employee spouse continues to work, she may merely wait to draw her share when he commences to receive benefits (with the possibility of increase as a result of his then greater age, longer service, and/or higher salary); or she may demand immediate payment to compensate for what would have been her share (without such possibility



of increase). Thus, the nonemployee spouse has a choice of delayed benefits or immediate payment.” In re  Marriage of Cornejo (1996) 13 Cal. 4th 381 (hereinafter, Cornejo).

9 For example, In re Marriage of Crook (1992) 2 Cal. App.4th 1606 (spouse’s benefit share determined as of the early retirement eligibility date, rather than as of the motion date six months hence).

10 See, e.g., In re Marriage of Nice (1991) 230 Cal. App.3d 4440; In re  Marriage of Shattuck (1982) 134 Cal. App. 3d 683; and In re Marriage of Scott (1984) 156 Cal. App.3d (Gillmore benefits determined as of date of trial for retirement-eligible husband). Note also that in Cornejo, the parties had stipulated to the amount to be paid monthly and were only quibbling over when payments should start. While it is not clear from the opinion on what basis that stipulation was made, the fact that wife was asking that her pay-ments be made retroactive to husband’s retirement eligibility date suggests the payment amount was based on his benefits earned as of the date she could have demanded immediate payment and did not include any subsequent accruals. Otherwise, wife would have been asking to be paid benefits begin-ning years before they were earned – a point the court would no doubt have mentioned as another reason for reject-ing her retroactivity claim.

11 In re Marriage of Castle (1986) 180 Cal. App.3d 206 (hereinafter, Castle).

12 Castle, pp. 215-216

13 In re Marriage of Lehman (1998) 18 Cal. 4th 169.

14 Id., p. 179 (“Because the non-employee spouse is compelled to share the bad with the employee spouse [ ], he or she must be allowed to share the good as well.”) See, also, In re Marriage of Stenquist (1978) 21 Cal. 3d 779, 800 FN 3 (written when the court was working under the Brown definition of a mature pension), noting that when husband takes some action,

such as terminating his employment before his pension vests or working beyond his retirement date, which has the effect of forfeiting all or part of his pension rights, wife “has no claim to any of the forfeited rights; a community share of nothing equals nothing.”). Of course, the employee’s freedom to define what it is that the non-employee owns without having to answer for his choices ends when the benefits are both vested and mature, since it is then that the right to ben-efits in which the community owns an interest is fully defined and no longer subject to any plan contingencies or uncertainties. Thus, in Stenquist, the court held the retiree accountable for trading his matured community-owned service retirement benefits for separate property disability benefits. See also, Gillmore (“A unilateral choice to post-pone retirement cannot be manipulated so as to impair a spouse’s interest in [matured] retirement benefits.”). And In re Marriage of Luciano (1980) 104 Cal. App.3d 956, 961 FN 3 (“Prior to the maturing of the pension the employee spouse retains the right to define the nature of the retirement benefits owned by the community” (see Brown, supra, 15 Cal. 3d at pp. 849-850)).

15 “In dividing nonvested pension rights as community property the court must take account of the possibility that death or termination of employment may destroy those rights before they mature. In some cases the trial court may be able to evaluate this risk in determining the present value of those rights. But if the court concludes that because of uncer tainties affecting the vesting or maturation of the pension that it should not attempt to divide the present value of pension rights, it can instead award each spouse an appropri-ate portion of each pension payment as it is paid. This method of dividing the com munity interest in the pension renders it unnecessary for the court to compute the present value of the pension rights, and divides equally the risk that the pension will fail to vest.” Brown, p. 848. Citations omitted for clarity.

16 In re Marriage of Shattuck (1982) 134 Cal. App.3d 683, 686-687.

17 Id.

18 See, Brown, p. 848, and Gillmore, p. 426.

19 Accordingly, under ERISA and the Code as amended by the Pension Pro-tection Act of 2006, early retirement subsidies (but not accrued benefits) can be eliminated for employees who have not yet taken early retirement when a multiemployer plan is severely under-funded. See, IRC section 432. Note also that under the QDRO provisions of ERISA and the Code, payment of an early retirement subsidy to an alternate payee cannot be ordered prior to the employee’s qualifying for that enhance-ment. IRC section 414(p)(4)(A)(2). ERISA section 206(d)(3)(E)(i)(II) [29 USC §1056 (d)(3)(E)(i)(II)] (domestic relations order may require payment pre-retirement “as if the participant had retired on the date on which such payment is to begin under such order (but taking into account only the present value of ben-efits actually accrued and not taking into account the present value of any employer subsidy for early retire-ment)…”) emphasis added.

20 “[An early retirement subsidy] is no different from an enhancement effected through ‘additional years of service,’ ‘increase in earnings,’ or ‘increase in age’ – which is uncontestedly a com-munity asset.” Lehman, p. 185, citation omitted).

21 “That the nonemployee spouse might happen to enjoy an increase, or suffer a decrease, in retirement ben-efits because of postseparation or even postdissolution events or conditions is justified by the nature of the right to retirement benefits as a right to draw from a stream of income that begins to flow, and is defined, on retirement with the nonemployee spouse, at one and the same time, holding the chance of more, and bearing the risk of less, equally with the employee spouse. Because the nonemployee spouse is compelled to share the bad with the employee spouse, he or she must be allowed to share the good as well.” Lehman, p. 179. Citations omitted for clarity.



BartelmieContinued from page 31

8. The parties shall be able to sell their family residence at any time by mutual agreement. This pro-vides the parties with the greatest latitude to deal with unforeseen circumstances so that their interest in the property is protected.

9. Define what will happen in the case of a party’s death. This may trigger a right of first refusal for the surviving party to purchase the decedent’s interest from the estate of the decedent, or if finances are slim and it would serve the children’s interest, then impose upon the estate of the decedent the specified term defined by the party’s in their Judgment for Dis-solution of Marriage for the sale of the home to maintain the continu-ity and consistency in the daily lives of the children. If the out-spouse is the survivor, the Agreement should shift the exclusive right of posses-sion of the home to the out-spouse, as well as, the obligation to keep the payments in connection with the family residence current until divided between the survivor and the estate of the decedent, or until a buy-out of the estate’s community interest in the family residence by the survivor parent, as provided for in the Agreement.

10. When the in-spouse remarries or cohabits this usually triggers a sale, or right of first refusal to buy-out the other party’s community interest in the home. If there is a buy-out option, you can define that the par-ties will obtain a joint appraiser to obtain a fair market value, and then the parties can define the allowable deductions from the fair market value to complete the formula. The “buy-out” formula should be defined by the parties in their Agreement. Or, the party’s may consider a modi-fication of the support payments or shared expenses. See Fam. Code Section 3808.

11. Capital improvements to the family residence may be required during the tenancy in common ownership, and how these costs

shall be shared can be defined by mutual agreement. When one party is financially not able to contribute and the capital improvement is necessary or approved by mutual agreement, then the other spouse can pay for the improvement and be reimbursed out of the escrow sales proceeds, or as a factor in the buy-out formula, or by any other mutually defined method.

12. What if a spouse loses their employment during the tenancy in common? This event may trigger an immediate listing and sale of the family residence, or trigger the right of first refusal to buy-out the other party’s interest in the home, and/or create a new reimbursement claim should one party make payments for the other obligated party related to the family residence mortgage principal, mortgage interest, other encumbrances, taxes, insurance, maintenance, or repairs. Further, the parties can create a security device for this loss of income to get the house payment made in a timely manner should the obligated party lose his or her job.

13. A right of first refusal can be arranged by the parties to coordi-nate the buy-out of other party’s interest in the family residence when a certain mutually defined event occurs (remarriage, loss of employment, ability to qualify for a loan, the term of the deferred ownership expires). If the party with right of first refusal does not elect to buy, then the parties may provide a second right to buy-out the first party, if the first party does not elect or does not qualify to buy-out the other party’s interest, then the second party will be provided a short-time period to exercise his or her right to purchase the residence before it is listed for sale. This buy-out approach avoids the loss of funds paid for costs of a listed sale and potential capital gains tax. It allows children to remain in the same neighborhood, schools and church. It may provide a unique and rare opportunity for one spouse to be a homeowner.

14. Is there natural disaster protec-tion? If the home has substantial equity, then the parties should consider insurance, or become aware of the availability and cost of earthquake coverage to protect the community equity in the home. The cost for this protection should be considered as part of the overall support scheme, and as a potential expense to be shared by the parties, or as a payment to be reimbursed on sale or buy-out.

15. What if the party with exclusive possession of the residence vacates the premises? If the in-spouse chooses to vacate the family residence, the Agreement should provide that this act is defined as a substantial change in cir-cumstances. One of the options includes allowing the out-spouse the ability to take-over exclusive possession, and how would this affect the current payment of support and obligations in con-nection with the family residence. This may require a mutual meeting with a CPA to adjust payments and support and to maximize income tax credits. The parties may agree that when the in-spouse vacates the family residence, that an advance written notice would be required to be made to the out-spouse, and that this may trigger a listed sale or buy-out of the in-spouse’s commu-nity interest in the family residence by elected option.

16. When the in-spouse rents a portion of the family residence, the par ties may decide how to treat that rent income by mutual agreement. The parties may wish to preclude the ability to rent a portion of the home, unless by mutual agreement as to the identity of the renter, amount of rent, and how to divide the rent income, and disclose the rent income for annual income tax filing.

The collapse of the real estate market and economy is forcing divorcing couples to consider a deferred sale of their family residence. A review of the considerations provided in this article may alleviate the unnecessary loss of the family residence and promote a successful division of this community asset. ■


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I ’ll be devoting most of this issue’s Custody Matters column to tips for Parenting Plan Coordinators (Child Custody Special Masters). But first, I’m really happy to

report that September and October brought two pieces of very, very good news in an otherwise bleak landscape for children in California’s family courts.

ElkIns FamIly law Task ForcE DraFT rEcommEnDaTIons

Our first hopeful news came at the State Bar Annual Meeting where we got a preview of the draft recommenda-tions of the Elkins Family Law Task Force (http://www.court info .ca .gov/jc/tflists/elkins.htm). These recommendations give us the best hope for family courts that have the time, resources and expertise to produce wise decisions for children. The Task Force has adopted many of the recom mendations submitted by ACFLS. While there are 100 recommendations, several are particu larly noteworthy. The Task Force recom-mends that family law receive 20% of the courtrooms and budget in each county – in proportion to the volume, com-plexity and social importance of the decisions made in family courts. The Elkins Task Force also recommends that Reiflerizing become the exception, not the rule, in our family courts. Other recommendations include eliminating recom-mending mediation and substituting separate brief evaluative screenings where mediation doesn’t produce a full parenting plan, clarifying the role of minors’ counsel, and increasing resources for representation of child custody litigants.

lEgal sErvIcEs FunDIngThe second piece of good news came when the governor

signed AB 590 (http://leginfo.ca.gov/cgi-bin/postquery?bill_number=ab_590&sess=CUR&house=B&author=feuer), creating a fund for court-appointed representation of family law and other civil litigants by increasing some filing fees by $10. The new statute mandates that 20% of these funds go to court-appointed counsel for parents and children in family law custody cases – particularly in cases where one parent

has counsel, and the other does not. Assembly Member Mike Feuer, the author of AB 590, must have gotten quite an educa-tion about the state of California’s family law courts when his wife did a brief stint as one of the Los Angeles County Superior Court’s family law bench officers. L.A. County’s 47 family law departments divvy up approximately 100,000 new family law filings each year, plus ongoing cases, modifications and enforcement proceedings.

ACFLS should play a leadership role in designing these new programs, and providing mentorship and training for the lawyers who will undertake these appointments. The Elkins Task Force has called upon ACFLS and AAML to create mentor-ship programs for newer family law attorneys – a request that dovetails nicely with the enactment of this legislation.

TIps For parEnTIng plan coorDInaTors (cHIlD cusToDy spEcIal masTErs)

Over the past fifteen years, a new ADR model for ongoing private child custody dispute resolution has emerged and evolved in California and across the country.1 This issue includes an article by Angus Strachan, Ph.D.,2 on Parenting Plan Coordinators (at p. 8). Under the PPC model, parents stipulate to appointment of a family lawyer or forensically-trained mental health professional to serve as a Parenting Plan Coordinator. The hybrid role combines elements of parent education, mediation and arbitration. The Los Angeles model creates three levels of decisions for PPCs – minor issues that get decided immediately, intermediate decisions that become orders unless one parent objects and requests a court hearing, and major decisions that are recommendations but require an Order to Show Cause and a decision by the court. Angus’s article gives much more detail about that model.

Recently, I got an email from a mental health professional who had sworn off PPC work but was considering accepting another PPC assignment. What follows is an expanded version of the email I sent in response to this request for a PPC stipula-tion and tips about doing this challenging work. As I was about

ABCH RcTUjZ67

cusToDy maTTErsnews and views about children<s Issues

in california<s Family courtsleslie Ellen shear, j.d., cfls, cals, Encino (los angeles)

acfls [email protected]


Continued on page 44 (Shear)

to hit “send,” I realized that I had written most of a column on this topic. So here’s my email to a prospective PPC:

Dear PPC –These tips (offered in no particular order) reflect the things

that have worked and not worked for me when I’ve been appointed as a PPC, and the things I have seen PPCs do that worked and didn’t work when I’ve represented parents in the PPC process.1. Choose a modest scope of powers for the PPC. Cross off

some of the big things on the LACBA list or make them Level 3 powers (recommendations not orders). Opt not to make recommendations as to those topics unless you truly have suffi cient data. Remember that you can recommend an evaluation.

2. Feel free to decline requests for orders where the change would not be in the child’s best interests. I see PPCs who feel that they have to take petty or trivial requests seri-ously. Judges know to just deny requests that are not supported by adequate reasons/evidence or are unwise. The more that the PPC can “just say no,” the more the PPC can prevent the parents from keeping things stirred up by constant requests for unwarranted changes. Judges call this “judicial restraint.”

3. Make factual findings and send those findings to the Court for entry into the court file. By making these findings, you motivate the parents to do the right thing. For example, I have made findings when a parent failed to help the children place a “safe arrival” call after travel. After a few months, the parents’ fear of the judge reading the findings and their general vulnerability to shame and humiliation whipped them into shape with regard to complying with the order.

4. Require an advance deposit that does not get applied to cur-rent billings, but is sufficient to cover a final set of orders and findings if one parent decides not to comply with the PPC order and boycotts the process. If they comply with the PPC order and pay your bills, the deposit can be the equivalent of a “last month’s rent” and returned to them.

5. Use a refillable retainer. Get enough money up front to cover the first few months of more-intensive involvement as you get to know the family.

6. Use Timeslips or other billing software. Track all your time and show it on your bills. You can opt to show some things as “no charge” or offer a courtesy discount, but make sure the bills document all of the time that you actually put into the task. You want the parents and the Court to know how much time went into your work and how you spent your time.

7. Don’t exceed the jurisdiction conferred by the Family Code or by your appointment order – know what author-ity courts have to make decisions for parents under the Family Code. For example, don’t make orders picking medical professionals, schools, day care providers, etc. Make orders allocating the legal custody authority to make such choices. Base those orders on the factors that Robin Drapkin, Richard Curtis and I developed for a series of programs on allocating legal custody. See my chapter

on parenting plans in CEB (2009) California Child Custody Litigation and Practice for a summary of these criteria.

8. Don’t make any orders unless you have sufficient facts to do so responsibly, with an understanding of the individual child and his or her life and relationships. Remember that the conflict between the parents is just one part of the picture of the family. Make sure that you have a good picture of the parent-child relationships and how the parent acts outside of the co-parenting relationship.

9. Write very clear, simple orders. See my CEB parenting plan chapter.

10. Make very heavy use of email and group instant messag-ing or use www.gotomeeting.com. Everyone benefits from a record of what was said and the opportunity to review discussions.

11. Caucus with each parent individually and with counsel individually as well as conjointly. Minimize the number of office sessions and make conjoint sessions rare. These parents are having difficulty disengaging. They aren’t married to one another, and they don’t want to work on their “relationship.” When both are present, their respec-tive worries about shame and humiliation and the tensions between them make it difficult for them to focus and to express themselves. Be a buffer for their communication with one another.

12. Consider making tentative decisions and giving each parent a chance to comment before finalizing the decision.

13. Order parents to use Our Family Wizard® for all of their co-parenting communication so that you can log on, see what’s been happening, and assess issues in context.

14. Avoid sua sponte orders for the most part. Only decide issues that a parent presents to you for decision.

15. Don’t accept an appointment where the parenting plan is vague and reserves jurisdiction to you to fill in the details. The role of the PPC is to help families implement and adapt a parenting plan, not to create one. The PPC is not a substitute for a child custody evaluator. If an evaluation is needed, recommend an evaluation.

16. Distinguish between the role of a PPC pendente lite and the role of a PPC post-judgment. Temporary orders differ from permanent orders. We know that as parents move through the uncoupling process, levels of conflict often abate. As the matter moves towards trial or settlement, all custody issues get a new look. See Keith R. v. Super. Ct. (H.R.) (2009) 174 Cal.App.4th 1047.

17. Remember that fairness is a procedural not a substantive concept. Give each parent a fair opportunity to share information and opinions. But don’t try to divvy up the decisions equally -- make the decisions on the merits based upon what would work best for these kids. Bend over backwards to make sure that each parent feels heard – that each has a full opportunity to explain what he or she thinks is important and why. Get the informa-tion you need to make wise decisions.

18. Keep the lawyers, stepparents, grandparents or other key players in the loop of the PPC process. As Hugh McIsaac taught us, whoever isn’t part of the process will sabotage it.


ShearContinued from page 43

So come up with a plan to keep everyone invested in the solutions.

19. The longer you work with people, the greater the risk of confirmatory bias. Let people surprise you. Honor the complexity of families and don’t assume you understand the full picture. Families will keep showing you different dimensions if you keep your eyes and ears open.

20. Set boundaries. Don’t be available 24/7. Few things are real emergencies. Don’t be pressured into instant decision making. Teach the parents to plan ahead.

21. Assign homework. Suggest reading on parenting and co-parenting issues. Ask parents to read a chapter, make notes about what they learned, try putting what they learned into action, and report back what worked and didn’t work. Use the same technique for parents who are ordered to participate in educational programs, anger management programs or other educational/behavioral interventions. If they don’t have to report back on what they learned, what they changed and how it worked out, the intervention is unlikely to produce any changes.

22. If you are a lawyer, work out informal consulting and brainstorming relationships with evaluators and media-tors. If you are a mental health professional, do the same with a few child custody lawyers. Keep up with the research. Subscribe to the Journal of Child Custody, join AFCC for the conferences and so that you are reading Family Court Review.

Finally, the single best source for understanding the families you serve is Johnston, Roseby and Kuehnle, In the Name of the Child: A  Developmental Approach to Understand-ing and Help ing Children of Conflicted and Violent Divorce, (2d Ed. 2009). Don’t undertake this work without reading that book, and refer to it often.

Endnotes:

1 The Association of Family and Con ciliation Courts has developed Guidelines for Parent Coordination (http://www .afccnet.org/resources/standards_practice.asp.) Last year the Journal of Child Custody published an entire issue devoted to Parent Coordination (available on line at http://www . informaworld .com/smpp/title~db=all~ content=g903692870~tab=toc~order=page).

2 More than 10 years ago, I chaired a subcommittee of the Los Angeles County Bar Association Family Law Section that developed a model PPC stipulation and conducted a one-year training. In 2008, LACBA updated that stipulation. Angus and I were members of a new subcommittee that revised the stipu-lation and has organized two trainings. The actual task of draft-ing the stipulation fell to Angus, Commissioner Richard Curtis (now retired) and me. The entire committee reviewed and revised our draft. The current Los Angeles PPC stipulation is available on line at on the LACBA website at http://www .lacba .org/showpage.cfm?pageid=177 near the bottom of the page. ■

parking places, as well as waiting in the courthouse for cases to be called. Such “nonproductive time” is generally greater in family law than elsewhere, because family law cases gen er ally have more trips to the courthouse than other litiga-tion and crowded family law calendars often make the waiting times more lengthy. If each party to a family law action is represented, each hour of “nonproductive time” is doubled and would pay for two hours of the time of a private neutral. In such cases one must question whether each trip to the courthouse is more productive than a half day with a private neutral who has a specific interest in the success of this case.

The ability for counsel to agree on procedures in the case may also eliminate “nonproductive time” or costs. To the extent that communication with the neutral is by e-mail and/or documents are delivered to the neutral by e-mail, the cost of runners may be reduced or eliminated. Witnesses who testify by video may save witness expenses.

Counsel experienced in the use of private neutrals in family law have found the elimination of “nonproductive time” is often significant enough to more than offset the funds paid to the private neutral. While this certainly does not occur in every case, the offset is often a significant matter.

A comparison of the first hearing in a particular case in the public and private worlds may help focus on “non-productive time/costs.”

In the public court, generally the first appearance (seeking temporary orders) is a hearing often limited to 20 minutes in open court, but an appearance which will likely consume at least a half day of both counsel’s time. There is the pres-sure, confusion and distress to the litigant seeking to resolve extremely important issues in a hallway of the courthouse along with the litigants from dozens of other cases on that morning’s calendar. Delay due to the size of the calendar is also common.

If two attorneys each expect two hours of “nonproduc-tive time” in the above first court appearance, that expense would permit booking a private neutral for one half day (assuming counsel and private neutral have similar hourly rates). In that half day, in a comfortable conference room setting with coffee and snacks, with the private neutral on time and with no other cases set for that time period, the first hour could be spent litigating or resolving the temporary issues, the second hour discussing discovery, case manage-ment and the retention of experts and the third hour com-mencing settlement negotiations.

ConclusionThe differences between the two systems at the first court appearance date could not be more clearly stated. Just the same, each case must be analyzed for its particular needs and requirements. What will it take to get a reasonable result in a reasonable period of time with reasonable expenditures for this case, its issues, its parties and its lawyers? While this question is not always easy to answer, it is a question that must be asked if the client is to be effectively served. ■



S AV E T H E DAT E S !

18th ANNUAL SPRING SEMINARTitles, Transfers and Transmutations:When Spouses Change the Character

of Assets and ObligationsPlus a Three-Hour Friday Afternoon

Pre-Conference Institute:Advanced Attorneys Fees

March 26–28, 2010 Hyatt Grand Champions Resort

Indian Wells (near Palm Springs), California•Threehalf-day,in-depthandadvancedfamilylawCLEprograms (Fridayafternoon,andSaturdayandSundaymornings)•Twoafternoonsoffuninthesunwithfamilyandfriends•Twoeveningsofwining,dining,networkingandcollegiality

Faculty will include:Garrett C. Dailey, cfls, (moderator)

Bench Officers:Hon. Mitchell Beckloff, Hon. Kenneth Black (ret.),

Hon. Thomas Trent Lewis, Hon. Michael Naughton, Hon. Maren NelsonCertified Family Law Specialists:

Avery M. Cooper, cfls, Dawn Gray, cfls, Christopher Melcher, cfls, Eileen Preville, cfls, Steven Temko, cfls, cals,Stephen J. Wagner, cfls, Peter M. Walzer, cfls

Our last three Spring Seminars were sell-outs.Detailed program information and on-line registration coming soon at www.acfls.org.

Book early to get the ACFLS Spring Seminar discounted rates at the Hyatt Grand Champions Resort on-line at https://resweb.passkey.com/go/acfl2010.

To enjoy reduced rates, you must reserve your room by March 6, 2010, and before the room block sells out, whichever first occurs. Reservation requests received

thereafter will be based on availability at the Hotel’s prevailing rates.


I have to be honest (or maybe I don’t but I will anyway), I am having a tough time lately finding the joy

in this profession. I feel wearied by the very difficult clients, counsel and others who I have to deal with, I don’t want to talk on the phone anymore, I don’t want to negotiate the first right of refusal for baby-sitting. I don’t care who gets the couch. I don’t want my assistant to leave early but she does have a good excuse. I don’t want to explain for the one- hundredth time why my name needs to be in the direc-tory in the lobby under “T” for Tuffias instead of “L” for law offices. I’m sick of payroll, segregated interest bearing trust accounts and getting to court at 8:30. I can’t remember where you’re supposed to put retirement contribu-tions into the Dissomaster. I don’t want to sit down and write this article. I don’t want to file Petitions in places without Starbucks within walking distance. I’ve had it with everything.

I know we all feel this way some-times and with so much to be fearful about – the economy, global warming, Kanye West ruining our big moments – it is hard to stay upbeat some days. So what’s a family lawyer to do? I try to think of the things I like – receiving the signed stipulation as I hover over the fax machine, finally getting the signed Substitution of Attorney form from a difficult client, those moments during mediation where the parties really understand what the other is saying. It is true that there is a lot to complain about but I suppose also, there is a lot to appreciate. I honestly do think that,

despite our reputation and unpopular-ity, a lot of us become lawyers, and family lawyers in particular, because we want to help people. This is true for me. Luckily, we come across a lot of people who need help and some of them we can actually help.

An inspiring thing about our work is that the vast majority of the time each client starts out feeling scared, sad and helpless and ends up feeling better, more in control of their lives and their choices. I especially like that moment when working with a client when you can see the change is starting to happen. For instance, I just finished a case where I represented the wife, let’s call her Betty. Betty started out so fragile, angry and wounded. She reported to my referral source that my office was too happy. I did not expect her to retain me. She wanted to keep the house so her adult children would have a place to come back to; she felt there was a possibility of reconciliation, which seemed to me very unlikely; she rarely smiled and seemed generally just so miserable.

She had another lawyer before me but did not feel like he explained enough things to her. When she retained me it was clear to me that we were not going to get anywhere until she trusted me and it was going to be a long road with this very trust-depleted woman. The case was simply not going to settle until she was able to believe me when I told her things such as I thought a judge would impute income to her at some point for calculating spousal support, I thought efforts towards

reconciliation were not a good use of her time and energy, and considering selling the house was a really good idea.

Of course, you guessed it, Betty’s husband and lawyer were very hot to finish the case. I got constant calls and e-mails whining about how long every-thing was taking and how simple the case was. It was clear that pushing Betty to the finish line or focusing on discov-ery or documents was not going to work and so instead I listened and listened to her while fending off the demands of her husband and his attorney. Fortu-

Finding the JoyHeidi S. Tuffias, j.d., cfls

Los Angeles County

[email protected]

www.familylawsolutions.com

 Heidi Tuffias has been a Certified Family Law Specialist since 1995. 

She practices in Brentwood. Heidi and the members of her firm provide 

the full range of family law legal services. Heidi focuses her practice on alternative dispute resolution and settlement-oriented representation 

of clients in litigation.

Reflections on the Human Side of Family Law Practice:Reflections on the Human Side of Family Law Practice:Reflections on the Human Side of Family Law Practice:


nately, the efforts and process it took dealing with the husband’s demands and threats ultimately led to my client feeling protected by and trusting of me. Then I was in the position to discuss her options with her and have her believe me when I told her things she did not like, and the case settled.

About three months into my repre-sentation of Betty, she e-mailed me a photo of a sculpture she had recently done. I called her to thank her and tell her how much I liked it and it ended up turning into a conversation about her being ready to sell the house. I knew from that moment forward she was going to recover and be able to move forward. That was my favorite kind of moment.

I loved working with Betty even though, at the beginning especially, she was not very easy to talk to and she was unhappy with everything, including me and my office. But it was also con-stantly clear to me that she was moving forward, progressing and getting better. I felt like I helped her. It was inspiring and fun and really joyful.

So sitting here at 11:00 p.m. with a mountain of Judgments to finish, an 8:30 a.m. new client tomorrow morning, and this article to get to the Editor, I’m going to focus on the joy, yes all that joy. ■

ACFLS MEMBERSHIP APPLICATIONEligibility for ACFLS membership is limited to attorneys certified as family law specialists by the State Bar of CA, Board of Legal Specialization.

Applicant name _____________________________________________ State bar no. _______________Date certified as CFLS by BLS __________

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Address ___________________________________________________ City/State/Zip ________________________________________________

Telephone _________________________________________________ Fax ________________________________________________________

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If more than one member of the firm is joining, please attach additional page with information about each applicant.

Dues for first member in firm $250 Dues for ____ additional members from same firm at $175 each Total amount of payment $ _______________

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Join online at www.acfls.org or send your application and payment by mail: Lynn Pfeifer, ACFLS Executive Director, 15 Corrillo Drive, San Rafael, CA 94903-3902, or fax: (415) 479-1347, or scan and email to [email protected]

22 “By its very nature, a pension right . . . owned as” community property “is subject to modification by future actions of the employee. Should the employed spouse retire early, both parties receive a smaller benefit than they would have otherwise. The employee is, of course, free to do so, even though it incidentally and adversely affects the other party’s rights, and the nonemployee spouse would have no grounds for recovery of the ‘loss’. . . . What the nonemployee spouse possesses, in short, is the right to share in the pension as it is ultimately determined. Olivo v. Olivo (1993) 82 N.Y.2d 202, 209, quoted with approval in Lehman with emphasis added, pp. 183-184.

23 As the Supreme Court said in In re Marriage of Stenquist (1978) 21 Cal. 3d 779, 800 FN 10, “a community share of nothing equals nothing.”

24 See, PLR 200442003 (Husband’s payment of lump sum buyout to ex-wife in exchange for her community prop-erty interest in his non-qualified deferred compensation plan constitutes nontaxable transfer between former spouses related to cessation of marriage

under Code Sec. 1041; and assignment of income doctrine won’t cause ex-wife to be taxed when husband receives payments from the plan). While Private Letter Rulings can’t be relied upon by any taxpayers other than to whom they are issued, however, they do provide insight into IRS thinking on the subject(s) addressed.

25 Com. v. Dunkin, John (2007, CA9) 100 AFTR 2d 2007-5870

26 See, Revenue Ruling 2002-22 for non-qualified deferred compensation paid to spouse under court order, and IRC section 402(e) (dealing with pay-ments to an alternate payee spouse under a QDRO) for tax qualified retirement plans.

27 Gillmore, p. 429.

28 Weinberg v. Weinberg (1967) 67 Cal. 2d 557, 566.

29 In re Marriage of Nelson (1986) 177 Cal. App.3d 150.

30 In re Marriage of Scott (1984) 156 Cal. App.3d 251, 254 (payments to wife must be included in her gross income “subjecting them to income tax liability, and freeing [husband] of any tax liabil-ity on the share of benefits remitted to her”). ■


Lynn Pfeifer, acfls Executive Director15 Corrillo DriveSan Rafael, CA 94903-3902

NEWSLETTER

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