I’m Dan Couvrette, the publisher of Family Lawyer Magazine. I want to welcome you to this video round table. Today’s subject is “The Best Advice I Ever Gave.” This roundtable is hosted by Sharon Klein, who has invited three top professionals to be part of this roundtable. Let me introduce Sharon and her guests.
Sharon is the President of Family Wealth, Eastern U.S. Region for Wilmington Trust. She oversees the delivery of all wealth management services by teams of professionals and heads Wilmington’s National Matrimonial Advisory Practice. She was featured by Forbes Magazine as one of the top 100 women wealth advisors in the U.S. and was named on Crain’s 2020 Inaugural list of Most Notable Women in financial advice and she will be inducted into the Estate Planning Hall of Fame in 2021, which is considered the height of professional accomplishment in the field. As a member of the Family Lawyer Magazine Advisory Board, we asked Sharon to host this video round table.
Let me introduce Sharon’s guests before I turn this over to Sharon.
Michael Mosberg is a partner with Aronson, Mayefsky & Sloan LLP in New York. Michael represents high-net-worth clients in all aspects of family law. He is a chair of the American Bar Association, Family Law Section, and a fellow of both the American Academy of Matrimonial Lawyers and the International Academy of Family Lawyers.
Carole Bass is a partner with Moses & Singer LLP in New York. Carole works with high-net-worth individuals and families structuring sophisticated tax-efficient estate plans. She also prepares and negotiates prenuptial agreements. Carole is a peer-elected Fellow of the American College of Trust and Estate Counsel.
Jonathan Wolfe is a co-managing partner of Skoloff & Wolfe in New Jersey. Jonathan focuses his practice on matrimonial disputes and business litigation. He is the past chair of the American Bar Association’s Family Law Section and has held many senior positions at the ABA and the New Jersey Bar Association. He is frequently called on for his insights by the media such as the New York Times, the Wall Street Journal, and Fox News.
Sharon has brought together a group of seasoned and highly respected professionals to share their best advice and I believe that this will be of value to both people who are considering divorce or going through divorce as well as the family lawyers and other divorce professionals. Sharon, let’s get started.
The Best Advice I Ever Gave
Surround Yourself with the Right Team
Sharon Klein: Thanks, Dan. It’s a pleasure to be here with my distinguished guests and as you said, we’re each going to be sharing the best advice we ever gave, which also happens to be the advice we continue to give. Here is mine: surround yourself with the right team.
It can be very complicated when couples are disentangling financially. You may have to coordinate an asset split of myriad interests that might include business interests and other liquid assets. You have to understand how alimony and settlement proceeds will support a lifestyle in the future and it’s really key to have a thoughtful long-term plan in place.
There is really no one advisor that can claim expertise in the array of issues that need to be addressed. A person getting divorced generally needs a family lawyer to represent them. They need a trust and estates attorney to review their planning, which all typically needs to be updated. They need an accountant to advise on tax matters and they need a financial advisor.
Regarding the financial advisor, not only can a financial advisor help someone get organized with their balance sheet, but the right financial advisor can run sophisticated cash flow projections, which actually serve a dual role. First, that can provide key data for an attorney to leverage at the negotiating table. Second, it gives the individual going through the divorce process peace of mind that they will be secure financially in the future.
My best advice of surrounding yourself with the right team is actually advice I gave with equal conviction both to professional advisors and to individuals: To professional advisors because getting the right team in place is going to help them help their clients. There are so many nuances in the divorce arena, and quite frankly it can be dangerous to go it alone because you don’t know what you don’t know. That advice about having the right team in place applies equally to individuals getting divorced because again, having a multidisciplinary team of professionals can help ensure that there are no gaps in the plan.
Sharon, can you give us any examples that put your best advice in context?
Sharon: Sure I can, Dan. In one recent example, a family law attorney came to me with a client whose divorce he had just finalized. He had actually used an excel spreadsheet to calculate the settlement sum that he requested in the divorce negotiations so that his client could live the lifestyle that she wanted.
The client was 62. His excel illustration showed that with the settlement sum that he was asking for, she was going to have more money at age 90 than she would at age 62 because his spreadsheet showed that the growth in the settlement portfolio was going to exceed her spending.
But the problem with an excel spreadsheet is that an excel spreadsheet is static, but life is not static, markets are not static, and people are not static. So, when we used our sophisticated proprietary analytics to run projections, which included accounting for challenging economic times, it included potentially volatile market returns, factoring in inflation, factoring in potentially unanticipated expenditures in the future, we found that not only would she not have more money at age 90, she was actually going to run out of money before age 90.
Unfortunately, the attorney had already finished negotiating and the divorce was finalized. Otherwise, since the husband was actually an exceedingly wealthy man, with this information the attorney would likely have been able to negotiate a larger settlement by showing that she needed more funds to weather different market conditions. But the good news was that with these same sophisticated analytics we were able to show that, although she needed to temper her lifestyle expectations a little, she would still be able to live a very comfortable life. So, we were able to give her that peace of mind that she craved.
Another recent example I have is when I worked with a family lawyer who was negotiating a divorce on behalf of a husband, and the couple’s balance sheet included several trusts that had been created during the marriage. That’s often the case with wealthy people.
I drew to the attention of the family lawyer the fact that there were several trusts that the husband had created while the couple was married where the income from the trusts was structured purposely so that it was going to be taxed to the husband for estate planning purposes. That was fine while the couple was married.
The problem was that, due to a recent change in the law, the income would continue to be taxed to the husband even after the couple was divorced. In other words, the husband was going to continue to be liable to pay the taxes on distributions from the trust received by his beloved ex-wife, forever! That would have been a very surprising result for the husband, but because I was able to identify it during the negotiation process, we were able to come up with a solution that would not have been possible if the divorce had been finalized. By the way, this is actually a very common scenario – many couples actually have trusts that they create during their marriage that can have this nasty surprise tax result unless it’s dealt with proactively while the divorce is being negotiated.
These are just a couple of examples of why I suggest that both professionals and clients surround themselves with a trusted team of experts to navigate the process so they can really do it in a coordinated way to position clients for a successful future.
In other words, it’s all about the team. With that, let me turn it over to Carole. Carole, welcome. Please tell us the best advice you’ve ever given.
Communication is Key
Carole Bass: Thank you, Sharon. The advice I always give to my prenuptial clients at the onset of the representation is that communication is key. The more open the lines of communication are between the parties, the less stressful and the less expensive the prenup process will be. In fact, one of the benefits of the prenuptial process is that it fosters open communication between future spouses about difficult issues. Money issues are one of the top reasons cited for divorce. So, communication doesn’t magically get easier after you say I do and a prenup can help foster healthy communication right from the beginning. Rather than speaking through their lawyers, the parties should strive to speak to each other, to discuss and reach a consensus on issues that arise in connection with the agreement.
There can be technical issues as to the characterization of property and division of property in the event of divorce, but it can also include emotional issues that arise when there is an imbalance of finances and power between the parties. In this way, not only is communication beneficial to the prenup process, but it is good for the party’s relationship to learn, to discuss financial and relationship issues, and to resolve conflict. This is a skill they will need for a successful long-term marriage, which is what we all wish for all of our prenup clients. What we have seen from clients who are unable to discuss complicated or contentious issues with their soon-to-be spouse is a prenuptial process that is emotionally draining. These are the agreements that are negotiated up to the last minute and signed a day before the wedding.
In addition, where family wealth or family businesses are involved, there’s another layer of communication that is essential, that is between parents and the soon-to-be-married child. I understand the parent’s desire to protect the child from over-reliance on family wealth, but I’ve been in situations where I’m learning about the family wealth at the same time as the client. What I have found is that this makes the negotiation process more difficult because the client getting married is not invested in the wealth, hasn’t been taught about the family’s values and expectations for their wealth, and is not as interested in protecting it. To the client, it can be like monopoly money, and again, communication is key.
Sharon: Thanks Carole, that’s great advice. Do you have a specific client example to share with us about the importance of communication?
Carole: In one case, in particular, I can recall constant back and forth between myself and the other lawyer over very serious issues that the parties absolutely refused to speak about with each other. My client was getting a terrible deal. There was a real imbalance in power. The client felt very insecure and very worried about her financial security, but she couldn’t speak with her fiancé about it. I raised issues with her that she felt uncomfortable speaking with him about and when she did raise those issues, he refused to listen. Everything went back and forth between the lawyers.
Ultimately, the agreement was signed against my advice and now they’re getting divorced. This indicates how important communication is not only to the prenup but to the relationship as well. I just wrapped one up like this a week or so ago, it was a far, far more pleasant process for everyone involved. There were complicated issues, a blended family, disproportionate finances, but the parties were great at communicating with each other. I could explain options to my client, she could go back and discuss them with her fiancé. They were able to reach a resolution and it was a very, very nice experience for everyone. Once again, communication is key.
You Get More with Honey
Sharon: Great, good advice. Thanks very much, Carole. Now, Michael, welcome. I’ll turn it over to you to let us know what the best advice is that you’ve ever given.
Michael Mosberg: Thank you, Sharon. Taking off from where Carole was, in the context of divorce, clients often come in very charged with emotions, whether it’s anger, resentment, sadness, betrayal, or loss of trust. There is a natural tendency in that context to want to push back, punch back or just simply reject any advice that’s given and just say no. The inherent problem with that approach is that decisions are being driven by emotion and not by thoughtful deliberation, thoughtful consideration. When your decisions are driven by emotions it’s going to lead to more fighting, more acrimony, delay in the resolution of your case, and ultimately increase fees which is why the best advice I’ve ever given to a client is that you get more with honey.
You need to assess what is most important to the other side. Hear the honey, then at the appropriate times, give on issues that are important to the other side that ultimately you know you can give on. But what it does, is engenders goodwill with your spouse or your partner. By engendering that goodwill, by giving in on that honey from time to time, you are allowing for the lawyers and the parties to work on bringing down the tension and to focus on a global and overall amicable resolution.
Sharon: I’m sure Mike, you have an example to share with us of how powerful honey can be. Do you?
Michael: I absolutely do Sharon. There’s one particular case that stands with me for many years where I had a client who was in a short marriage with a young child and wanted to get a divorce. She had said that others had suggested to her because it was a short marriage, her equitable distribution would not have been very significant. But because the father loved the child very much, she would be able to get more money if she utilized the child through visitation. In effect to weaponize the child.
We had long and extended discussions about how that was absolutely the wrong approach and what she needed to think about was the long game. That is the honey here, the father’s relationship with the child was so important, even though this was a father who didn’t really know how to care for the child yet. The child was young, the father was working, mom stayed home and took care of the child. To enable that relationship, foster that relationship, facilitate that relationship, rather than hinder it is helping to bring it forward rather than ransom it.
By doing so, she ended up with a far better financial package. More than that, going forward, the father always made sure that the mother had a hotel room wherever they were traveling, a summer home of her own wherever they were traveling and the person that benefited the most here was the child. They were thinking about the child’s best interests because the mom understood that giving in, here the honey, would engender goodwill. It would help facilitate the relationship with the child, with the father. In turn, the father was more than fair with the mother.
The best part of this was that years later I had kept in touch with this client. She came in and said: I really, really needed to thank you for the advice you gave me with respect to you get more with honey because it truly changed her life in her son’s life.
Credibility is Your Most Valuable Asset
Sharon: That’s a great story. Thanks, Mike. That really puts it in context. Okay. Jon, can you bring us home with the best advice that you’ve ever given.
Jonathan Wolfe: Sure, Sharon. Well, those are tough acts to follow, but I will do my best. I think the most valuable advice that I’ve given to clients over the years is that credibility is in fact, their most valuable asset. I have this conversation with clients at the outset of their case. I tell them two things. I mirror the advice that you just heard from Michael but I tell them that our goal is to settle this case and we’re going to do everything possible to settle this case but one of the ways that we settle your case is by making sure we’re prepared and that we’re able to litigate your case if it comes to that, because sometimes you can’t reach a settlement. If you are unfortunate enough to find yourself in that position, the most valuable asset you have in front of a court ultimately is your credibility.
So, we’re going to work hard to make sure that we maintain your credibility throughout the case and we’re going to take reasonable positions. That’s going to help you in the long run. When I talk about the lawyer taking reasonable positions, I’m talking about substantively. We’re not going to argue positions at the extreme. It’s also procedurally – when an opposing counsel needs an adjournment, we’re not going to be jerks about it. We’re going to be reasonable throughout the case because ultimately that’s protecting the client because the judge would view us as reasonable. We tell the client that more than anything, they have to be honest.
That sounds easy. That sounds trite almost, but they have to be honest with us about everything so that we can be honest on their behalf to the court. That could be on things that are seemingly unimportant and oftentimes that can be about things that are embarrassing. They need to be able to tell us things that maybe they won’t even feel comfortable telling their closest friend. They need to admit their mistakes to us so that we can figure out the best way to address those mistakes and they may not be as bad as the client really thinks. But the one thing they can’t do is lie because ultimately if they get caught in that lie, which is what will happen, their credibility will be destroyed and that’s something that we can’t come back from when we go in front of that court. That’s what I give as the most valuable piece of advice.
Sharon: Jon, I have a feeling you have an example of this. I think we’d all love to hear it.
Jonathan: In our brief time today Sharon, I think of a client, a husband who was upset. It was a very contentious case. Without going into too much detail, there was an accusation made that he had vandalized his wife’s home. He came to my office, and I said: did you really do this? He said: Jon, I didn’t do it. You know me, Jon, I would never do something like that. So, we submitted a sworn certification from him, explaining with some indignation how he would have never done something like that.
Sure enough, the next day, the other side produced the video showing that it was him. That’s a really difficult thing to come back from in front of a court. It was the kind of situation where we could have come forward and said: you know what? I made a mistake. I lost my temper. I made a bad decision. I made a poor choice. That could even be understandable, but what a court can never understand is the choice to lie under oath. It colors the rest of the case when you’re dealing with the things that are most important.
Sharon: Thanks very much, Jon. Well, there you have it, the best advice each of us has ever given and actually continues to give: ensure that you’re surrounded by the right team; communicate clearly and effectively; make sure that vengeance doesn’t fuel an already emotionally charged process, and make sure that your client understands that credibility is foundational. When you combine all that advice, you can successfully position clients for the next chapter. Thanks very much to all my guests. It was a pleasure having you all today.
I want to thank Sharon and her esteemed guests for taking the time to share their wisdom with us today. We greatly, greatly appreciate it. I encourage you to learn more about everybody who participated in today’s discussion by visiting their websites. If you’re looking for more information to help you through your divorce, I recommend you visit www.divorcemag.com. If you’re a family lawyer or other professional working with divorcing people, I recommend that you have a look at www.familylawyermagazine.com if you’re not already here. Thank you very much, again, all the best.
Sharon is President of Family Wealth, Eastern U.S. Region, and National Head of the Divorce Advisory Practice at Wilmington Trust. She is responsible for overseeing the delivery of all Wealth Management services by teams of professionals. Beginning her career as a trusts & estates attorney, Sharon is a Fellow of the American College of Trust and Estate Counsel and a nationally recognized speaker and author. www.wilmingtontrust.com/divorce
Michael Mosberg is a partner with Aronson, Mayefsky & Sloan LLP in New York. Michael represents high-net-worth clients in all aspects of family law. He is a chair of the American Bar Association, Family Law Section, and a fellow of both the American Academy of Matrimonial Lawyers and the International Academy of Family Lawyers.
Carole Bass is a partner with Moses & Singer LLP in New York. Carole works with high-net-worth individuals and families structuring sophisticated tax-efficient estate plans. She also prepares and negotiates prenuptial agreements. Carole is a peer-elected Fellow of the American College of Trust and Estate Counsel.
Jonathan Wolfe is a co-managing partner of Skoloff & Wolfe in New Jersey. Jonathan focuses his practice on matrimonial disputes and business litigation. He is the past chair of the American Bar Association’s Family Law Section and has held many senior positions at the ABA and the New Jersey Bar Association. He is frequently called on for his insights by the media such as the New York Times, the Wall Street Journal, and Fox News.
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