"Whether in business, government, or the family, people reach most decisions through negotiation. Even when they go to court, they almost always negotiate a settlement before trial."



Download 134.46 Kb.
Page2/3
Date09.11.2016
Size134.46 Kb.
1   2   3

A key concern to every domestic advocate is the difference between money now and money later. Everyone knows that money "on the table” is worth a lot more than money promised in the future. There are two reasons for this.

First of all, there is always the uncertainty of "future promises." Something that’s promised today, rather than delivered today, is an opportunity for a broken promise, rather than a fulfilled one. Some people call this, "A bird in the hand is worth two in the bush."
There is also the factor of "earnings lost" -- the amount of money lost because it couldn’t be put to work earning money in an investment that would yield interest or dividends. This is also known as the time value of money. One dollar handed over today and invested now at 6% interest would be worth $1.06 a year from now. If only a dollar is handed over a year from now, then that’s six cents lost. While that’s a small number in this hypothetical, it would certainly be much larger in the sums involved in domestic negotiations and divorce settlements.
Let's try some examples to see how this works. Would you rather have $1,000 now... or $1,000 five months from now? How about $1,000 now or $1,100 five months from now? How about $1,100 five years from now?
The difference among these choices can be easily explained by considering the time value of money. In each case, cash now is preferable to cash in the future, but money in the near future is preferable to money a long time from now. Knowing how to calculate the difference (and how to account for the tax consequences) can make all the difference for the domestic negotiator.
Suppose that the parties have agreed that Mr. Miller needs to pay his wife $15,000 to equalize their property division. How should he propose to pay her?

  • Mr. Miller's attorney would probably want him to use the money in his 401(k) plan and pay her with that, since deferred funds (which are unusable at present by him) are easier to give away than "cash money."





  • And Mrs. Miller, on the other hand, would likely want to receive "cash on the barrelhead" rather than unusable cash in the form of deferred compensation funds. She can't use the latter now to pay her bills, her living expenses and her attorney's fees. The funds she would get -- by means of a pension division order – would be tied up until she was eligible to retire or else would be subject to a penalty and taxes for early withdrawal.

Assume further that the parties agree that Mr. Miller must pay this sum, $15,000, in cash. What then should he propose for a payout?




  • Mr. Miller would perhaps propose payment in three equal installments of $15,000 on January 1 of each of the next three years.




  • A reasonable counterproposal for Mrs. Miller would be that the payments accrue interest at a reasonable rate if the payments are to stretch out over each of the next three years.

What all of this goes to show is that the value of money on the table is often different from the value of other kinds of money -- such as tax-deferred funds (which cannot be used immediately without incurring taxes) and funds which are promised to be paid in the future. Most recipients would rather have their money now. Most (but not all) payors are of a different mind and would rather transfer funds that are tax-deferred (or at least are to be paid in the future), rather than making an immediate lump-sum payment to their spouses. When you are paid can be almost as important as how much you are paid.


G. Executory Promises

Another striking difference that must be remembered by the domestic negotiator, and which bears on the issue of present or future payments, is the difference between executed and executory terms in an agreement. When Jim signs over the house to Jane, and when Jane in turn titles the car in Jim's name, those are executed provisions. They are "done deals," and the insertion of such promises in a consent order or separation agreement ordinarily means that they are fixed, final and unmodifiable.

On the other hand, Jim's promise to pay $1000 per month in alimony to Jane, and his agreement to pay her $500 per month in child support, are executory promises. So are the terms for Jane's custody and for Jim's visitation with the minor child (whether liberal, stingy or non-existent). Even property division clauses can be executory, as when Jim agrees to make the mortgage payments for the next five years on the marital residence or when Jane agrees to pay off the van to which she takes title. None of these promises is complete or fully accomplished; they are all executory in nature in that they are still in the process of completion. The important point for a good domestic negotiator to remember is: "Never trade an executory promise for an executed one (unless you know what you are doing!)" Some examples might show why this is so:


  • John Smith agrees to give his wife, Mary, the marital residence. She, in turn, agrees to accept a low amount of child support each month from him. Once the agreement is signed and the house is deeded over to her, however, she changes her mind about the child support. She and her lawyer file suit in district court and, after the trial, the judge awards Mary a higher amount of child support at the "guideline level." The root of the problem is John's trading an executed promise (the agreement to deed the house to Mary) for an executory one (his payment of a low amount of child support).


  • In our second example, Jane Jones negotiates with her husband, Jim, for "zero visitation" by him in exchange for his keeping his retirement benefits. Once the separation agreement is signed, however, Jim goes to court and is able to persuade a judge that he should be allowed visitation rights with their child, regardless of what the agreement says. Once again, the source of the problem is trading an executed promise (Jane's release of her rights to Jim's pension) for an executory promise (no future visitation by Jim).

When it comes to trading, make sure you are trading apples against apples. While it may be smart to trade one kind of apple for another, it makes little sense to trade an apple for an orange (when the orange is an executory promise and the apple is an executed one). Executory promises can, under certain circumstances, be modified by the court or avoided by the promisor! Executed ones by their very nature, are those which are complete and beyond modification. Mixing these kinds of promises together by trading one kind against the other is a recipe for disaster!


H. Know How to Count!
A good negotiator always knows the score. A vital component of strategy is to keep careful track of concessions made. When the other side asks you to give in on yet another point, you should know exactly how many concessions you have already made and what the last one was.
"Keeping score" allows you to point out how reasonable you have been, how many times you have modified your position to accommodate the other side, and how important it is that this be the last concession (or perhaps, that this concession not be made at all). When you keep track of concessions, you are able to use the history of this particular negotiation to your advantage each time an adjustment or modification is requested.
Suppose that you’re negotiating the terms for a property transfer from your client to her husband. You’ve gone back time and time again to her to make changes and improvements that will enhance her position and get the other side’s agreement. But the opposing counsel and the husband are saving their most expensive demands for last.

When this happens, you may be able to forestall them or obtain additional concessions that reduce the client’s cost by pointing out how you've given in on Point A, Point B and Point C. Your client has made concession after concession. Every demand of the other side has been met so far, but the other side hasn’t budged yet on your client’s needs, which are Point D and Point E. Try to use the history of concessions to obtain additional trading and bargaining with the other side.

I. Linking Concessions
A good negotiator will also consider linking one concession to another. When the other side asks for a promise or an agreement, the response might be, "We can do that if you can see your way clear to doing something we consider equally important." This linking of promises, often called a quid pro quo, is an excellent way of resolving two problems at the same time.
Thus, the domestic negotiator might respond to her adversary as follows: "We'll be willing to deed the house over to Mrs. Jones, but we would like for her to waive her rights to Mr. Jones' retirement rights at the ABC Company in exchange for this -- fair enough?" As long as there is some equivalency between the two promises that are exchanged (in terms of monetary value or of psychological importance), the dual-concession approach should work.
This is, incidentally, one example of another motto of the good negotiator: "If you are going to say NO, make it sound like you are saying YES." In the above example, Mr. Jones' attorney could have said, "No" to the proposal of deeding over the house to Mrs. Jones. Instead, she found a way of saying "Yes," even though the affirmative response was a conditional one, based on Mrs. Jones' waiver of her rights to the husband's pension. A "No" which is phrased to sound like a "Yes" continues the process of negotiation and the mutual give-and-take that occurs on both sides. A simple "No" does not move anything along. Or, in the words of Herb Cohen, "No is not a proposal -- it’s a reaction."

J. The Time of Apparently Neutral Acts

For the real estate agent, location is all-important. In negotiations, timing is everything. This is especially true when it appears to the casual observer there’s no timing issue involved, that the matter is “time-neutral.” To understand how to advise about the timing of apparently neutral acts; let’s take a look at some examples:



  • Leaving the Home. Often the husband's attorney has to advise him on a common scenario: should he leave the house and let his wife stay behind? When there's been an agreement on waiving an abandonment claim, this becomes more difficult. Why not let him get out of the house? Why force them to stay living under the same roof? A good "husband's attorney" would certainly be wary of letting the husband depart based on consideration of the tax consequences:

Who gets to write off the property tax and mortgage interest on a separate return? If the parties file separately, as opposed to filing married, joint returns, he will not be allowed to claim a deduction for either of these items since the deduction is limited to the party who has the house as his primary residence. Since it isn't his primary residence any longer (after he moved out), then he is barred from claiming these payments as deductions.




  • Scheduling a year-end divorce. Suppose the husband has filed for divorce on November 15, and the summons and complaint are served on your client November 20. You can answer before December 31, or you can file a motion for extension of time and get another 30 days for the answer. The client doesn't care about when the divorce is granted, but she does very much care about how the settlement is reached -- over her objection or with her participation and consent. What should you choose? Assume for the sake of the example that the wife earns substantially less than the husband.

Is it solely a matter of time? Let's see. If the divorce is postponed into the new year, that's one more year in which the parties will have the option of joint tax filing. Her filing status -- married, joint or married, separate is determined by her marital status on the last day of the calendar year. This may give leverage to a wife earning much less than her husband by leaving him to file married, separate, a higher tax bracket with at least one fewer exemption, unless he's struck a bargain with her. After all, it's now too late at the end of the year to change his withholding and have a larger amount taken out of every paycheck for taxes. He will wind up paying a lot more in taxes if he files married, separate instead of jointly with his wife. Once he realizes this, there may be a significant reason for him to bargain. She is in effect saying to him, "How much is my signature worth?" There may be a substantial monetary difference for her (and substantially more leverage with him) if the divorce is postponed into the new year. So it's not just a matter of time after all -- it's time plus money, or leverage!

Another taxing problem arrives about April 15 for many family law practitioners. Mr. White has had withholding all last year on the basis of the taxes and tax rates available to him as married filing jointly, and he earns much more than his wife. When his attorney calls you April 1 to ask about getting Mrs. White over to the CPA's office to look over and sign the joint return, what should you do? Respond right away? Wait for a while? Be unavailable for about the next ten days? By then, things will really be approaching critical mass. What better time than to inquire about the "cash advance" on her settlement that Mrs. White needs now... possible to help on your bill or on other litigation expenses. Should you agree to an extension? Never! More time to file the return will only remove the pressure on Mr. White for a couple of months; a deal now, not then, is what you need! Make sure that the time pressure of an April 15 deadline stays on your side. Feel free to explain to the other side, "My client doesn't need to file jointly. She's had enough withheld from her paycheck for separate filing. We're sorry that your client finds himself in such a bind. Maybe if we both made some concessions, we'd be able to benefit both of our clients!"
K. The Importance of Good Intelligence
Any Army commander will confirm that good intelligence is essential to the successful execution of a military campaign. Likewise, a "negotiation campaign" must be informed by adequate intelligence.

Some of this intelligence may come from your client or other sources. If Mr. Smith finds out that his wife has become "engaged" to her boyfriend, with an impending marriage set for one week after the expected date of divorce, this could influence substantially the speed and finality of the settlement negotiations as well as the timing of the husband's answer to the divorce complaint served on him by the wife's attorney. Mr. Smith's knowledge of a critical factor involving timing would be essential in deciding how to conduct the negotiations in the Smith domestic settlement.

Suppose you’re defending Mr. Brown in a child support case. The trial is set for December 21. And you know that the plaintiff has been trying to go on vacation during that week to go back home to visit her family. If you don't arrive at a negotiated plea, the trial will take place and there will be no vacation -- or else a shortened one -- for the plaintiff. Under these circumstances, this intelligence you’ve obtained should make a difference in how you play your hand in the negotiation sessions.
On occasion, however, such information will not be available from your client. Sometimes you can employ formal discovery to obtain it. You may even have to get this information directly from opposing counsel. Be sure to “poll the opposition” to find out what they’re seeking and why.
For example, when the other side's position changes, you may need to find out why in order to reassess your strengths, weaknesses and bargaining position. When your adversary changes her mind, don't hesitate to find out why things have changed or need to be modified. If she doesn't provide you with an explanation of her position, demand one. Don't be afraid to ask for detailed information and objective reasons in support of that new position she has taken. Negotiations are usually conducted at "less than arm's length." Be sure to ask about the reason for the other side's change in position, and insist that objective criteria, not simply a change of mind, be used to resolve the impasse.
Such objective criteria might come from for example, the new information on Mrs. Smith's tax liabilities or the new job offer in a different city. These would more likely be the basis of a modified settlement proposal than subjective criteria, such as Mrs. Smith's decision that she simply needed more money from her husband.

Some of your best intelligence comes from "tuning in" to your adversary. Be sure to listen to the other side closely. "An observation of the conduct of some lawyers in ... meetings reveals that, frequently, very little listening is done and each side is simply waiting for the other side to catch a breath so that they can leap in with the next thing they wish to say." Groner, "Orchestrating Successful Matrimonial Settlements," XIII The Matrimonial Strategist 5 (October 1995).

L. Negotiating Style
The style with which negotiations are conducted is vitally important. In their well-known book, Getting to Yes, Fisher and Ury suggest the following as keys to a successful negotiating style:


  • Focus on basic interests, not on the positions of the parties.



  • Define problems objectively, and separate the people from the problems.



  • Invent solutions, be creative and look at a range of options.

Here are some examples of how these precepts might operate in the context of domestic negotiations.




  • Whether to Pay Alimony. Ed Black and his wife, Emily, have just separated. Emily has been at home for the past ten years raising the children, and she used to be employed as a nurse before that. Ed’s position is that he won't pay alimony! Emily is just as fixed in her position that "Ed can afford it, and I'm entitled to it!" The feelings of Mrs. Black -- hurt and insecurity due to the separation and the large responsibility of caring for the children without a job or the immediate prospect of one -- are just as strong and ingrained as those of her husband. He too feels hurt over their likely divorce, as well as fear and insecurity that a settlement with an alimony component in it will mean a lifetime "meal ticket" for his wife without any hope of getting her to support herself since there's no incentive to do so.



  • Custody Problems. Separating the people from the problem occurs all the time in custody cases. Jim explains that he wants custody because he has just found out that his ex-wife, Sandra, has a new boyfriend who "sleeps over" from time to time. He states that "those times have been getting more frequent recently." While his concerns for the impact of this on the children are understandable, it's also obvious to the good attorney that it will take more than an occasional sleepover by one's "significant other" to make a custody modification case.





  • Positions and Personalities, Proposed Solutions. In both of these examples, positions and personalities are standing in the way of problem-resolution. What can be done? If the negotiators in the first example can look beyond their past personal clashes, and if the parties in the second example can put aside their feelings and fears, it might be possible to look at the problems and the need to address basic interests. Finding out basic needs and resolving them in an objective fashion is the start of sound negotiation strategy.

In the alimony scenario, it is important to recognize that Emily has a need for immediate financial security while she is caring for the kids, but has a future income potential after the children are of majority if she goes back to work as a nurse. Ed won't be helping himself if he refuses to pay any alimony when he knows that Emily needs some time to care for the children before she can be convinced to go back to the workplace from which she's been absent for the last ten years. Ed also has a need for some "horizon" on his alimony payments so he won't be looking at a lifetime "ball and chain" when he may incur other support obligations in the future, as with remarriage or the expense of caring for aging parents.


A proposal that might satisfy Ed’s goal of no lifetime alimony and Emily's goal of financial security would be to have Ed pay alimony for the next ten years, till the youngest child has turned eighteen, and then add on another year (or two) of alimony while Emily looks for a job, obtains additional training or recertification, and does everything else necessary to prepare herself for a return to the job market. Then it might be possible to terminate the alimony.

In the custody case, someone needs to ask, "What's the real problem here?" Is it not enough visitation for Jim? Jealousy over the new boyfriend? Problems the children are having in school? If a fair and objective version of "the problem" is that the children are not doing well -- in school, at either parent's home, around the neighborhood or in any other way -- then there may be a custody case that needs to be addressed. If the problem is more visitation for Jim, that might be arranged if Sandra will agree -- and with a new boyfriend there might be a better chance of her agreement -- or if there's been a sufficient change of circumstances since the prior court order. If the problem is defined as "her new boyfriend," however, there's little hope that the domestic practitioner can solve what Jim has defined as the problem because he's making the people (Sandra and the boyfriend) into the problem.

These are ways you can propose settlements by separating the personalities and the feelings from much more objective facts and basic interests. They focus on identifying the needs of each party and on a creative solution for meeting the set of needs, not on justifying or accepting the “position” of either party.
Trying to come up with creative solutions from a range of options occurs often with equitable distribution cases. Valuing and distributing personal property -- especially the tangible items, such as household furnishings -- is every lawyer's nightmare. Who gets the bedroom suite? Who gets the ashtrays and the wastebaskets? At what price?
An inventive way to do this division is to propose making a master list of the furnishings. All items on it must be agreed to be marital property that exists, intact and undamaged, in the possession of one party or the other. Next to each item are two blanks, one for the price (marked "$") and the other for who gets it (marked "H or W"). Then one of the parties puts down the price for each item and the other party gets to choose who receives each item at that price! An example done by using the “Table” function in word-processing is shown here:


DESCRIPTION OF ITEM

$ [PRICE]

H or W

Heart Pine Dresser and Bed, Upstairs Guest Room







Gray-Green Sofa and Footstool in Living Room






Cherry Butler's Table in Living Room








Ugly Gray Elephant's Foot Umbrella Holder in Hall







Seven Assorted Rifles and Shotguns in Basement







Lawn Boy Riding Mower in Garage







Dining Room Table and Four Chairs







8-PC. Setting of FOLIO Pattern Silverware







Teak Stereo System, Tape-player and VCR







Share with your friends:

1   2   3


The database is protected by copyright ©hestories.info 2019
send message

    Main page