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Attorney Wayne
Attorney Wayne, Lawyer
Category: Family Law
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Experience:  Practicing Law Since 2000
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In mediation we are discussing two scenarios, divorce or legal

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In mediation we are discussing two scenarios, divorce or legal separation. With legal separation I receive survivorship benefits earned during the marriage since my husband retired prior to separation. Likewise he receives survivorship benefits he earned in marriage subject to time rule since I wasn't retired when we separated. If we divorce versus legal separation I will not get survivorship benefits at all since his plan will not pay. But he will get survivorship regardless of divorce or legal separation. In determining offsets, if we divorce is there case law supporting my claim to loss of benefit earned during the marriage for the amount of survivorship benefit I would lose? How is this factored in negotiations for the MSA? No one can claim the benefit if he remarries and precedes his new wife in death if he remarries since I am the only one who has "earned the benefit during our marriage" since he is now retired. Thoughts on what I should do to negotiate this loss if we divorce versus legally separate. He can always divorce at some point so what should I do if there is recourse to claim this loss in a divorce scenario if we settle now with legal separation.
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Hello. Thanks for contacting us.

You seem incredibly well read and prepared. You have also hit upon one of the problems people sometimes encounter with mediation -- mediators are neutrals. Some are not even lawyers (I trained in mediation, and half the group were psychotherapists) -- so their knowledge is more of the process of getting to an agreement, rather than crafting solutions. Even those who are lawyers can be reluctant to do more than provide "legal facts" -- because the mediation process is designed to assist the spouses in creating their own arrangements within the confines of the law. To make suggestions can sometimes amount to taking sides.

You are right that there is no assurance that a separation will remain such -- and the other side won't eventually want a clean break through divorce (which often happens should a boyfriend or girlfriend want the marker of emotional commitment that marriage can represent).

Possible solutions to protect the spouse who would lose the benefit include:
-- a contingency in the separation agreement that would provide compensating assets to the spouse that would lose a financial benefit should separation become divorce.
-- a clean divorce with an agreement that the spouse whose plan provides a survivor benefit that he or she purchase life insurance or an annuity in lieu of the coverage that would be lost
-- Or a rejiggering of assets, so that the value of purchasing such a policy is factored in and provided to the spouse who could be left without coverage (essentially adjusting the financials to give a little more than previously agreed to cover this potential).

If there is goodwill (which your description indicates), there may well be room to make this work.

The thing is, because the mediator is a neutral, it may be necessary to have one's own lawyer do a limited number of things to make this happen. This might include analyzing the facts and figures to craft a proposal. I would certainly advise having one's own lawyer review any final settlement before agreeing. It is probably an little extra well-spent (and one still benefits from the lower cost of mediation, rather than the enormous expense of litigating a divorce).

I wish you successful and speedy resolution of this issue.
Customer: replied 4 years ago.

What is the case law to support my claim for loss of benefit in the divorce scenario? There is angst in this effort for us both so I need to know for sure what the law says in California to support my claim for being compensated for the loss if we divorce in the options you listed...annuity, life insurance (confirm...I would have to purchase or would he...a bit of problem of cost due to his age and medical issues) or a legal econ value that has been established by a neutral third party (we had this done). Will the value established by the third party be the offset value in negotiations for both legal separation and divorce? I need to stipulate case law because unfortunately for me your statements on mediators seems to be ringing very true...very limited knowledge and they are neutral to the point that neither of us are getting the facts to settle quickly. Your specific legal support, case law, is needed on this so that the mediators can explain to us both what the courts will say if we litigate.

I'm sorry, but I'm not sure "case law" is applicable. This is a matter of negotiation and good will at this point. Case law only arises when there is a dispute under litigation. And litigants chose case law to support their goals -- but in something where a court has wide discretion to weigh the "equities," it is not really helpful.

The basic argument in a community property state like California is that any assets accrued while married (including fringe benefits for retiree spouses) are 50-50 property (pre-marital property and inheritances are not, generally). So the key would be arguing that this community, marital property would be lost.

There is case law that could be applied in all directions in an argument like this -- its not something like school rules that state anyone arriving after the bell will be marked tardy. So the legal principal -- community property -- is the key thing to argue. In marriage, once essentially has a legal claim on spousal benefits. In a community property state, there's a half interest in those assets acquired. Remember, mediation is a negotiation, not the application of a fixed formula. Think of something the other party wants to trade for it that may not matter as much to you. If you can get to yes, it is a lot better than litigating it -- where everyone pays a lot, and goes through tremendous pain and anxiety.

BotXXXXX XXXXXne -- there is no off the shelf "case law" because each case has different equities. The only constant is the half-interest in an asset. I suspect no one wants to only get half a life insurance policy, so creatively figure what to swap if that life insurance is that important. Everyone has a botXXXXX XXXXXne number -- so ultimately, with community property, after all the marital is added up, it should be appraised and then divvied up. End of exercise. what form that division takes, that's where the negotiation comes in in mediation.

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