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Credit Union Joint Account Cases Messier Yet

In Podolak v Podolak (click on name to read case) two brothers fight over funds in a credit union account that was joint between Dad and just one of them when Dad died. After a lengthy recitation of facts, the Court gets to the legal analysis and the part of the case I want to talk about, which is how joint ownership rules apply to credit union accounts.

The COA notes that MCL 490.56 and 490.58 (click on cites to read statutes), taken together, provide that any account at a credit union that is titled in more than one name is presumptively a survivorship account regardless of whether the account was set up in a manner that expressly provided for survivorship rights; AND the standard of proofs necessary to upset that presumption is clear and convincing evidence (higher than the “reasonably clear and persuasive proof” standard that applies to statutory survivorship bank accounts).

With more and more people banking primarily at their credit unions, these are good rules to have a handle on.

This is a second foray into joint accounts issues by the COA in the last six months. In September, I blogged about the Morris case (click here to read that post).  Together these two cases provide a nice summary of joint account rules, which it appears, are much more complicated and convoluted than many of us had assumed.

The Podolak case is unpublished.

The Problem with Mediators

Now onto facilitative mediation and my opinions and gripes about same.

Sometimes I feel like I spend as much time in mediation as I do in court. Nearly all cases I am involved with go through the facilitative mediation process, and most of those settle through that process. So, it works, it’s great, etc..

And, I’ve been to any number of programs at which the presenter extols the value of mediation in probate court matters. At those programs, we hear the same clichés about family dynamics and how many cases are really about how people feel and not the legal issues underlying them, and that the role of the mediator is to help the parties feel engaged in the process, and to vent their personal feelings so that they can come to peace with resolution of the legal matters which are only a manifestation of those issues.

To my mind, the problem with most mediators is that they actually believe this crap. I like to think, and I believe, that by the time I get to mediation with my clients, they already have separated their emotions from the legal process, they understand what the risks and costs of going forward are, they appreciate that the court process will not provide them with a moral victory – only a financial outcome that could be favorable or unfavorable. So, when I am in those situations, I have a strong desire to say to the mediator – “enough with the touchy feely stuff, let’s get down to business.”  I suspect I am not alone.

Now I will acknowledge that my bias is also a product of my arrogance. And this is how arrogant I am:

As I see it there are three types of cases.

Scenario 1: Two weak lawyers, both of whom need someone to help them do what they cannot do on their own = educate their clients, figure out what’s a fair result, and help them avoid the embarrassment of actually having to perform in a courtroom if they don’t reach a deal. The mediator’s job here is to make the two weak lawyers look competent (save face) and get to a result that both sides can swallow.  The difficulty is that the clients have likely only been fed hot air by their lawyers, and have significant misperceptions about the value of their case/ the strength of their legal positions.  In these cases I suspect having the mediator delve into the feelings that the clients have toward one another and the sources of their mutual dislike has some value, in that it allows them to open up to the mediator who can build a rapport with them and then start shaping a settlement agreement.

Scenario 2: One weak lawyer and one strong lawyer. In this situation, the mediator’s role is getting the weak attorney’s client to agree to something that allows the weak attorney to save face and avoid getting taken to the woodshed in court. So, I think, go talk to the weak attorney’s client about his/her feelings if that helps – but my client probably doesn’t need or want that.  Rather, what I want is for the mediator to bring me a number.  My client will pay something – but that number is discounted by the fact that I don’t think the attorney on the other side wants to litigate.

Scenario 3: Two strong lawyers. I have client control and I know what my “walk away number” is.  Opposing counsel has client control and knows what his/her “walk away number” is.  Maybe there’s a deal to me made, maybe not.  The whole dance, and the only thing either of us need help with, is shuttle diplomacy – going through the back and forth process of offer and counter offer to test when we are getting close to walking out – and then pulling back before things break down.  If we’re close, but not there, the real skill we are both looking for in a mediator isn’t helping our clients get their feelings out, but rather the time-honored art of banging some heads together and getting it done.

Obviously, there are variations on these three themes – more or less experienced attorneys, more or less client control. My point is that I think we have gone too far down the path of touchy-feely. While there is a place for that in mediating some cases, good mediators need to realize that when they’re working with more experienced and skilled attorneys, they may need to focus less on touchy-feely and more on get r done.

Look, some of my favorite lawyers are mediators. It’s a tough job.  I respect you all.  And please take what I say above for what it is – random thoughts and rants.

I’m Your Lawyer – You Can Trust Me – Starting….. Now

This morning I offer two posts, only tangentially related, in that they both deal with the broader topic of alternative dispute resolution. This first post relates to a new unpublished court of appeals opinion dealing with arbitration clauses in attorney fee agreements.  The second post is pure and unadulterated rantings about the facilitative mediation process, and my own prejudices re same.

As to the case, it is called Rozanski v Findling.  To read the case, click on the name.

Historically there has been much discussion as to what an attorney can slip into a fee agreement that might be self-serving, and whether a provision requiring disputes to be resolved through arbitration would be crossing that line (i.e., enforceable). After all, the client is entering into a contract with his/her own lawyer.  So, before I am your lawyer, or as I am about to become your lawyer, how fair do I have to be with you with respect to the terms of my engagement?  It’s a conundrum about which there has been much discussion.

This case doesn’t discuss any of that. Rather it notes that arbitration is favored under Michigan law, and as such, enforceable in this case in which the arbitration clause was part of an engagement agreement between a client and his lawyer.  So, by implication, arbitration clauses in attorney fee agreements are ok.  Again, unpublished opinion, limited issues raised.

So I guess it’s like: Ok now that you’ve signed this contract I am your lawyer and from this moment forward I will always act in your best interest and with a pure heart – but up until the moment you signed that contract I was free to screw with you and use my superior understanding of the law to my advantage.

I’m thinking we’re going to see arbitration provisions added to a lot of attorney fee agreements going forward. And if you’re a facilitative mediator, it may be time to get certified as an arbitrator too.

Finally, one quote from the case I would point out:

“A three-part test applies for ascertaining the arbitrability of a particular issue…”

Arbitrability? Is that even a word?

Uncapping Triggered by Date of Settlor’s Death

Cottage in Grand Traverse County is held in revocable trust. Settlor dies in August 2014.  Township uncaps property taxes for 2015 – which is the calendar year following the year in which ownership changed – so says Township assessor.  Trustee objects claiming uncapping should not have occurred in 2015, because: (1) claims period for creditors had not expired until early 2015, and/or (2) the property was in fact not distributed from trust, and therefore no change of ownership occurred.  COA rejects both arguments.  Taxes go up 65%.  To read Fifarek House Trust v Long Lake Township, click here.

Uncapping issues are always interesting, and the best uncapping cases always seem to involve up north cottages.  This case is unpublished, so consider that.

Bad timing for the Fifarek family. The uncapping would have been avoided entirely had the settlor lived a few more months.  A new statute preventing uncapping for transfers to family became effective December 2014.  Settlor died in August 2014.  To read more about our new-ish uncapping rules, click here.

The case has implications for situations where real property in trust is not residential or trust beneficiaries are not family. The rule of this case is that a change of ownership occurs when the settlor dies, because that causes there to be new trust beneficiaries.  I think the COA gets it right.  Somewhat surprised  that there is a dissent, endorsing the Trustee’s creative but tenuous arguments.  Click here for dissent.

Resisting the Bucket List Mirage (aka More Naps Would be Good )

I talk to a lot of my clients, as well as professional colleagues, who are roughly in my age range (58). While some of them know exactly when they plan to retire (if they haven’t already), and what they plan to do; many of them are like me – unsure about whether retirement is a good idea.

We are living longer. And even if we can afford not to work for the next 30+ years, the real question is whether we will be happy if we walk away from the challenges that have engaged us for so long.  Will we be happy on the beach, on the golf course, traveling, watching television, watching the grandchildren, or volunteering in our communities?

Many feel pushed to make a decision; encouraged to “let it go.” The whole process can become stressful, filled with anxiety.  We hesitate.  And some of us simply resist.

We are confronted with the seemingly unimpeachable proposition that we must “do it now” before we’re too old and decrepit to enjoy the things “we really want to do.” Like what?  I ask.  Spend more time travelling and staying in hotels? Eating out more? Or is the plan simply to “be more involved” with your grandchildren?

I’ve had grandchildren (one of whom is pictured above) for 5+ years. Love ‘em to death – but here’s what I’ve learned:  They ain’t my kids, and raising them ain’t my business.  And I don’t want it to be.  I had my shot at parenting – gave myself a C or C-.  Maybe I could do better with a second chance – but no one is asking me to try – and in truth, I don’t have the energy or inclination.  Sure, there’s a role for grandparents – but it’s small one.

Retirement.  Bucket List.  It’s all a soul-sucking mirage.

OK.  I recognize my perspective on retirement isn’t shared by everyone – and the soul-sucking part may be overselling it.  But I’ve also come to realize that I am not alone.  Seems to me that there are a lot of people struggling with these same issues.  It’s a hard decision with big implications.  In any event, retired or not, I’ll tell you what would be good: more naps.