Dear Nick and Nora:
To Nora’s consternation, Nick removed a black Sharpie from his jacket pocket and drew a large “T” on the white tablecloth. On the left side he wrote his name and on the right he wrote Nora’s.
“We have only three things left to resolve. You say that you’re ready, and I’m about to show you that I am, too.”
“Nick, do you know that’s a permanent marker you’re using?”
“Yes.”
“They’ll never let you eat here again.”
“Let’s treat that as my problem. Our problems are:
“» In spite of the law against being reimbursed for the $200,000 you inherited and then squandered by paying credit cards and various family expenses, you can’t trace it to a specific asset. In contrast, I used the same amount for the down payment on our house, which I get back even though we’ve always held the title jointly. You claim that we both acted in essentially the same way, but the law is treating us differently. You have been telling anyone who will listen that it’s unjust. You’ll be surprised to learn that I have also been listening.
“» The second issue is airline miles I accumulated in my travels for our businesses. I hate to travel. I wanted you to do some of it and you refused, so I got stuck. Giving me the extra miles fixes the injustice.”
Nora interrupts, “Just tell me how many miles you have.”
“A lot.”
“Nick, since you won’t tell me what you have — what we have — I don’t know what they are worth or what I could do with my half.”
“I just checked it out. Figure $1,600 for a round trip to Paris in steerage. Business class goes for something between $4,800 and $6,200 — three or four times as much as economy. An upgrade requires about 70,000 airline miles. When miles are used for an upgrade it doesn’t feel profligate, because you get the miles whether you want them or not and they’re not good for anything else. And, I earned them because I did all the traveling you refused to do.”
Nora interjects, “Both lawyers say you don’t have a leg to stand on.”
“I know that. Our third issue is the disposition of our sequin business and the building that houses it. I have a comprehensive proposal.”
Nora says, “Go for it.”
“I’m going to. I’ll start by adding a $200,000 distribution to you off the top of the community property division. That means we are both being reimbursed for the money inherited during marriage. I think the way the law works for me and against you is unjust, so I’m doing what I feel is right, but I still want you to give me some credit for it.”
Nora’s not going to show her cards and says, “What’s next?”
“I still want all the airline miles, but I propose this compromise: You give me a list of all the trips you would like to take for the rest of your life, and I’ll transfer enough miles to upgrade every one of them.”
“What if there aren’t enough miles?”
“I’ll take that risk.”
“Is there any limit to the number of trips?”
“No. I want a list because I want the miles used, and if you really consider where you want to go, I think there is better chance that you’ll actually use them.”
Nora asks, “What about the sequin business?”
“Watch this. I’ll write ‘$200,000 reimburse’ in your column under the T. Then I’ll write ‘unlimited upgrades’ to your side and ‘airline miles’ on my side; I’ll draw an arrow from my miles to your upgrades. Then, on your side, I will agree that you can have the sequin business and the building that goes with it, for nothing.”
Nora summarizes, “So I get the $200,000 reimbursement, all the upgrades I want limited only by what I put on a list of ‘future travel,’ and the sequin business and building at no cost?”
“I think I’ve made a willing and generous capitulation.”
“Nick, how dumb do you think I am? We bought the sequin business because we thought we could create a model working environment, and it hasn’t worked out that way. So here’s my idea: You get the sequin business and the building.” Nora takes the Sharpie from Nick and draws an arrow from ‘sequins’ on her side of the T to Nick’s side.
Nick responds, “I don’t have time to worry about the sequin business. I’ll tell you what. You keep the sequin business and you can have an extra $50,000 off the top.” He writes $50,000 and directs an arrow from his side of the T back to Nora’s side.
“Nick, you’re driving a hard bargain. I’ll give you $100,000 plus the business.”
They both say, almost at the same time, “This is ridiculous!”
Nora observes, “Obviously, neither of us wants the sequin business, and we each realize that it’s probably a liability rather than the asset. This is a place where ‘divide by two’ doesn’t work and the lawyers could help us by figuring out what can be done with the turkey instead of fantasizing that one of them is going to be able to slip it to one of us. That’s not going to happen unless it’s slipped to you.”
“Should we tell them to figure it out?”
“What do you think would happen?”
“We would pay a lot of fees and they would tell us that ‘this is the best we could do,’ and the situation would be the same as it is now.”
“Nick? Do you remember the lawyer who helped us when you bought that building in San Francisco that turned out to be something of a toxic disposal site?”
“Yes, Rob Hamilton. Your lawyer has made quite a point on the toxic site. He wants to charge my half of the estate for buying it.”
“He was craftier than that, Nick. He figured that the present value of the sequin business was negative and getting worse every day. He was going to bang the drum for reimbursement of my half of the original cost, but when we got down to the final tape, he’d generously agree to waive the reimbursement and to give you the business and the property at no cost.”
“What a loser. I hope you aren’t going to pay him for that strategy. Who would fall for that?”
“Nick! It’s exactly what you tried to do to me. Five minutes ago.”
“What does Rob Hamilton have to do with this?”
“He seemed like a good guy, and he sure pulled your bacon out of the fire on the toxic waste deal. Maybe we could retain him to handle the sequin business for us.”
Nicks starts a new list on a fresh area of the tablecloth. “We agree that neither of us wants either the business or the building.”
“Yes.”
Nick continues to make notations on the tablecloth: “‘If it can be sold for a profit or given away for nothing, we accept. We recognize that we may have to sweeten the pot. We don’t know how much it’s going to take, but there is some amount at which someone will want to buy it. We realize that he may have to employ other professionals, and we are both on the hook for half the expense. We are also on the hook for half his fees, which we realize could be substantial.’ That’s it. Do you want to call him this afternoon?”
Nora wonders, “We can call, but will our lawyers let us do this?”
“Nora, it pains me to say it, but, over two years ago, Bucky told us that this is the way we’d end our case. If our lawyers try to mess this up, the interesting thing will be to see how they do it.”
Your friend,
Bucky
— Brian H. Burke is a certified family law specialist practicing family law and mediation in Santa Barbara. A researcher and educator in the field of divorce and family conflicts, he is also the creator of the Legal Road Map™. Click here for more information, call 805.965.2888 or e-mail info@burkefamilylaw.com. Click here to read previous columns. The opinions expressed are his own.