Category Archives: Articles

Article on “The Sale-Leaseback with the Right of Repurchase” by Saul Larner, Ph.D., LL.M., MBA

The Sale-Leaseback with the Right of Repurchase

by Dr. Saul Larner, Ph.D., LL.M., MBA 

An effective tool for the mediator to use when bringing a settlement agreement to a conclusion.

In divorce, there are usually too many financial needs that are still present when the money runs out. No one has come up with a solution, and everyone thinks that there is no solution unless there is a significant lifestyle change, which neither party is willing to accept. As divorce professionals, we spend significant time at the drawing board without giving up hope prior to meeting with our clients pointing out that we recognize that they have explored their options. Then we give them one more potential solution for them to evaluate.

From the real estate perspective, there are many variables, and we must evaluate the possibilities from many perspectives. What are the priorities, and what do we need to do to get there? We are going to discuss one case where the goals, needs, hopes, and wishes of a divorcing couple were able to become part of a settlement agreement with few regrets later, and brought them unexpected peace and harmony.

Strategy requires thought, creativity, and planning, and I equate it with the words of Shakespeare. I follow these words in every mediation preparation I encounter.

“We first survey the plot, then draw the model;

And when we see the figure of the house,

Then we must rate the cost of erection,

Which if we find outweighs ability,

What do we do then, but draw anew the model.”

William Shakespeare, King Henry 1V, Part 2, Act 1, Scene 3

Case History

Joe and Sally decided to get divorce, mainly because of infidelity. As with most divorces, the main conflict is with the division of the home.

The first step for the mediator is to explain to Joe and Sally that the mediation isn’t based only on dollars and cents, but will also be based on more important issues, including meeting financial goals. We are also mediating peace and peace of mind. The mediator must make the client understand that focusing on the numbers will not work and will be counterproductive, as they will spend all of their money on legal fees. Their child would suffer both financially and emotionally if this continues. So, here is my strategy to help Joe and Sally reach “happily ever after.”

A real estate broker tells Joe and Sally, “Your house is worth $1,200,000. If you sell it now, you won’t have to worry about variable rate interest kicking in. If you sell it for less, then maybe Joe can reduce his alimony. There is a risk that there will be a downturn in the market.”

With the above circumstances, it would be unlikely that either Sally or Joe would feel that they received a square deal, and even if the case were to be settled, they would remain enemies, which would create even more friction in bringing up their son.

The value assigned to the house by a real estate broker was not high enough for the needs of the divorcing couple to become a reality.

One effective strategy is for Joe to give Sally a quitclaim deed in exchange for her not receiving alimony and child support payments. The mechanism is explained below and almost any judge would sign off. Of course, one cannot negate child support, but this issue can be worked around with the proper paperwork showing that child support payments are provided for in a different form.

Here is how this strategy works. If one enters into a sale with a leaseback to the property and adds the words, “with the right of repurchase,” then the IRS considers it a financing device rather than a sale, and it is not a taxable event (sale-leaseback with the right of repurchase). This also means that the tax assessment cannot be raised, as a sale wasn’t recognized by the IRS.

Joe quitclaims the house to Sally in lieu of alimony and child support (though the child support is protected by assignments). Sally sells the property and leases it back from the new owner on terms which are very inviting to both parties.

Let’s analyze what the parties are trying to accomplish.

Joe can walk away free of alimony and child support. He and his new girlfriend can continue to live the good life because Joe will not have these payments. Further, his girlfriend will leave him if he has support payments pending. In addition, she has an even nicer house than he has.

Sally will be able to live in the same house with a cash reserve, no rent, and also an income stream. This is because the terms of the sale involve a monthly annuity payable to her by the new investor/buyer. She places her cash received into securities which are stable and give her an income stream and draws down systematically to cover her living expenses.

This allows her to achieve her goals. Her son may continue to attend the same school, and she can continue to live with her friends. She can remain in her home where she is comfortable. She has greater financial security in that she has no concern about Joe shirking his responsibilities and spending child and spousal support money on his new girlfriend. She is now able to move on with her life, going to law school and then buying a condo or perhaps into a new relationship which she can meet her goals more easily.

This strategy allowed both spouses to achieve their personal goals. Moreover, because there was nothing left to argue about and they both compromised to reach a solution, they became civil to one another, which was a benefit to their son. Another benefit was that they both became more flexible with the visitation schedule.

Yes, there are other ways to positively resolve the cash crunch issues, such as a reverse mortgage, a collateralized monetization, a 1041 exchange, and others. A good divorce professional would evaluate all of the logical alternatives. However, with the other methods, there would have been less room for flexibility. Further, changes in the lives of the spouses may bring a wish to change the capital structures, and with the sale-leaseback with right of repurchase this is much easier.

In this case, this approach is the best one to maximize the ability to design a settlement agreement where both parties’ hopes and wishes become realized.

About the Author

Dr. Saul Larner is the founding director of SP Larner Global Dispute Resolution who specializes in complex real estate and divorce mediation matters. He has a global presence and he can be reached at 310.867.4840 or at his website www.SettlementIsAnArt.com.

(Dr. Larner recently joined the Association for Conflict Resolution, Hawai’i Chapter and requested that this article be published.  By publishing this article, the Association for Conflict Resolution, Hawai’i, makes no recommendation regarding its applicability to any specific cases.)

The Professional Family Mediator, Spring 2016 Collection of Articles

A collection of four articles from the Spring 2016 Newsletter of the Academy of Professional Family Mediators that conflict resolution professionals may find interesting:

Next Generation Now, How Family Law Attorneys Can Advocate for Clients By Educating Them About Children

The Ethical Edge, Confidentiality Under Fire

Legal Stuff Matters, Review of “The Divorce Dance” by Financial Planner Stan Corey

The Possible Use of Music by Family Mediators, by Peter Yarrow, The Professional Family Mediator, Spring 2016

Bonus: articles on building your mediation practice:

ABA 2011 tips (James McGuire)

ABA 2008 tips (Lee Jay Berman)

Mediate.com tips

 

Article by David Smith: Nurturing the Peacebuilders and Conflict Resolvers of Tomorrow

In this article, David Smith summarizes his case about nurturing our youth as peace builders and conflict resolvers through indirect action:

“It is in indirect action fields where the vast array of occupations that contribute to a functioning and vibrant society can be found: healthcare, business, the arts, science and technology, government, education, military service, and not for profit work. Indirect action careers are those where the prime objective is not necessarily resolving differences or building peace, but might though come about as an important by-product, and as a result improve conditions for those in need. The emergency room nurse who needs to comfort loved ones after trauma or must help foster better understanding between family members, or the athletic educator who comes to realize that there is a need to provide students with cooperative based activities rather than competitive ones, are both engaging in indirect action….

By helping young people recognize that peacebuilding and conflict resolution work can take place in every profession, we provide students with realistic and achievable goals. In addition, we ensure that the values of conflict resolution are inculcated across the career spectrum. We want every young person entering the labor market to believe that their skills in dealing with conflict will be appreciated where they start their careers….

For those of us seriously engaged in the work of peace, we need to make a priority spending time with youth of all ages to show them the possibilities of making a professional life in advancing the resolution and transformation of conflict. In this way, we are ensuring that there will be a cadre of dedicated professionals following us committed to the values of peacebuilding. This is an important legacy for us all.

David J. Smith is the author of Peace Jobs: A Student’s Guide to Starting a Career Working for Peace (Information Age Publishing 2016).   He teaches part-time at the School for Conflict Analysis and Resolution at George Mason University and is the president of the Forage Center for Peacebuilding and Humanitarian Education. He is a recipient of the William Kreidler Award for Distinguished Service to the field of Conflict Resolution given by the Association for Conflict Resolution.

Looking to expand your areas of practice? Try Online Peer Mediation

If you are hoping to expand your conflict resolution horizons, develop your online mediation capacity, and increase your potential for future income, all while elevating the conflict resolution skills of our younger generations, Online Peer Mediation might be your garden to cultivate.

According to Peer Mediation Online as of Tuesday, May 10, 2016:

THE NEED FOR ONLINE PEER MEDIATION

Since the mid 1980s peer mediation has been the most commonly used conflict resolution education program in the United States. Research indicates that as many as 25% of US schools have had peer mediation programs serving grades 3 to12 and many programs in large urban districts are district­wide. However, three important changes in the educational and social context now suggest the need for an online version of peer mediation.

1 ­ Significant and Increasing Online Public Education

In formal educational contexts (K through 12) the increase in online schools has skyrocketed. Approximately 3 million K through 12 students are now enrolled in free, online public schools, which are not served by peer mediation.

2 ­ Prevalence and Preference for Online Communication

Current school­age generation prefers to communicate online. For the millions of students in conventional K through 12 schools, community groups, or youth organizations, online peer mediation opportunity is more congruent with their use of social media and communication technology.

3 ­ Global Peer Mediation Growth

Peer mediation programs have been growing not only in the United States, but also around the world. In fact, much of the increase in peer mediation since 2000 has happened in Europe, Australia and South Asia.

ONLINE PEER MEDIATION PLATFORM (OPMP)

For the reasons listed above, in December 2014 the JAMS Foundation funded this Online Peer Mediation Platform (OPMP), a 2-year project initially managed by the Association for Conflict Resolution, and now managed by the Association of Peer Program Professionals

OPMP GOALS

The four goals of the Online Peer Mediation Platform are:

1-Resources

­Provide extensive resources to anyone interested in peer mediation: useful links

2-Online Training in Basic Peer Mediation Skills

­ Show how middle and high school can teach their students basic peer mediation skills online . Peer mediation simulations

3-Online Peer Mediation Skills Development

­ Teach middle/high schools how students can practice their peer mediation skills by participating in online peer mediation simulations with other students and their trainer. Each simulation consists of four parts:

  1.         1- (Co)mediation of a typical school-related conflict between two or more students.
  2.         2- Debriefing, to reflect on what happened during that peer mediation: what worked well or not-so-well, and why.
  3.         3- Video Recording.
  4.         4- Online Survey, to collect all students’ feedback: e.g. what they liked about their simulation, what the learned.

In 2015 OPMP ran and video recorded six online mediation simulations. The results were very positive (students loved them). OPMP is now seeking 10 middle or high schools in the USA that are interested to learn in 3 hours (for Free) how to set up, run and video record online simulations with their own students and trainer. To watch the video recordings of the six simulations and learn how middle/high schools can participate in the 3-hour “Train the Trainer” program, click here.

4-Online Peer Mediation Services

­Show how middle/high schools experienced in peer mediation can deliver online peer mediation services to schools that don’t have a peer mediation program: useful links

OPMP TEAM

The team is a group of experts in peer mediation, online mediation, Internet and mobile technology.

Judy Tindall – President, National Association of Peer Program Professionals

Dr. Cynthia Morton – Chair of Education Research and Teaching Section, ACR

Prof. Karen DeVoogd – MA, Director Mediator Mentors, California State University Fresno, Fresno CA

Jay Edwards – Website Consultant,­ ReelFire Productions

Giuseppe Leone – Founder, Virtual Mediation Lab

Kristen Woodward – Conflict Resolution Specialist, Fairfax County Schools

For more information about their Online Peer Mediation Platform, send an email through their Contact page.

Amrita Mallik on The Modern Era of Diversity and Inclusion in the Workplace

Check out Amrita Mallik’s (ACRH Board Member and a Mediator on the Distinguished Panel of Neutrals at Dispute Prevention and Resolution) latest post:

The Modern Era of Diversity and Inclusion in the Workplace: What Google’s Project Aristotle Teaches Us About High Functioning Teams

Amrita Mallik’s practice includes:

Mediations * Facilitations * Workplace Investigations * Coaching * Effective Communication Skills Training * EEO and Diversity and Inclusion Consulting and Training

See Amrita Mallik’s profile

 

From Mediate.com – Promoting Online Dispute Resolution in Africa – A Simple, Pragmatic Approach

*Article originally published at Mediate.com.  See the original article here.

by Giuseppe Leone

December 2015Giuseppe Leone

During Cyberweek 2015, an annual conference on Online Dispute Resolution (ODR), I attended a webinar titled “The African Union and Prospects of ODR in Africa”. Ijeoma Ononogbu, Morenike Obi-Farinde and Ayo Kusamotu, three attorneys and ADR practitioners in Nigeria, presented the challenges and opportunities for ODR in their continent.

In short, the good news is that more and more people in Africa now use every day mobile devices (e.g. iPad, iPhone, Android tablet or smart phone) in their home or office. The bad news is that only few people know what ODR means, and how it can help them resolve disputes quickly and inexpensively.

During the webinar Q&A session, I made some comments related to online mediation – one form of ODR and a field that I have some experience in, having run hundreds of online mediation simulations in 9 languages with mediators from 30 countries. I pointed out to the webinar presenters that, in my view:

>>If the idiom “Seeing is Believing” applies to Africa as well, it is much better to show what online mediation means and how it works – rather than just talk about it.

>> Online mediation should be shown in as many languages (or dialects) as possible. In Nigeria, for example, in addition to English, their “official” language, there are three other major languages: Hausa, Igbo and Yoruba.

A few days after Cyberweek, during a video conference with Morenike Obi-Farinde and three other Nigerian mediators interested in online mediation, we came up with a 2-step plan.

STEP 1 – I will set up, run and video record an online mediation simulation of a commercial case in English, with the participation of 3 mediators playing the mediator’s and the parties’ roles.

The purpose of that simulation is dual. First, letting those mediators see for themselves what online mediation means, how it works, and how they can do online what they are used to do face-to-face. Second, asking the mediators who participated in our simulation: how did you like what you just did? The reason why their answer is so important is simple – how can mediators possibly convince other people that online mediation works and makes sense, if they are not fully convinced themselves?

After our simulation, I will also produce a short video, which can be used to promote online mediation in Nigeria. For example, it can be posted on the  “ODR Africa Network” and Virtual Mediation Lab websites, shared through the social media (Twitter, Facebook), or shown during their presentations to community, professional and business organizations.

STEP 2 – I will then teach Morenike Obi-Farinde and a group of other ODR Africa Network mediators how to do by themselves what we did for our simulation in English. From that point on, they will be able to set up, run and video record online mediations simulations in different languages – Hausa, Igbo and Yoruba – and for different kind of cases: for example, for commercial, family, workplace, International, bi-lingual disputes.

On December 3, 2015 we carried out Step 1 of our 2-step plan, and it worked great. As you can see in this 2-min video  our online mediation simulation of a commercial case went well, proving that today’s technology in Nigeria is sufficient for offering online mediation services.

More importantly, all mediators who participated in our simulation loved it, and can’t wait to participate in Step 2 of our plan – a 2-hour Training in Online Mediation.

Granted, before online mediation becomes a reality in Nigeria and other African countries it will take a while and a lot of effort. Our  1-hour simulation, however, has already accomplished two important goals. First, the Nigerian mediators who participated in it now truly believe in online mediation. Second, they can now show other people – in just 2 minutes – what online mediation means and how it works.

How Agatha Christie Helped Me Be A More Effective Mediator – by Elizabeth Kent

elizabeth_kent

Mediate.com has published How Agatha Christie Helped Me Be A More Effective Mediator –  an interesting article written by ACR Hawaii member Elizabeth Kent.

Elizabeth is a facilitator and mediator, teaches a graduate class at the University of Hawaii in systems design, and provides training in dispute resolution. She is also former Director of the Hawaii State Judiciary’s Center for Alternative Dispute Resolution.

The Future of Mediation – A Mediate.com Project

In celebration of their 20th year, Mediate.com has launched an interesting project, called “The Mediation Futures Project”. In short, they are gathering future-focused thinking from mediation leaders, practitioners and programs in these mediation sectors.

  • Mediation Generally
  • Civil
  • Commercial
  • Community
  • Divorce & Family
  • Elder
  • Health Care
  • International
  • Online Dispute Resolution
  • Public Policy
  • Workplace
  • Youth

Contributions to the Mediation Futures Project are accepted in the form of articles or videos. Here are some contributions posted on the Mediate.com website:

ARTICLES

VIDEOS

To learn more about this Mediate.com project and how you can submit your own article or video click here

Predicting the Future of Mediation – New Article by Peter Adler

peter_adlerMediate.com has recently published Predicting the Future of Mediation, an interesting article that Peter Adler wrote because he could not possibly “resist an invitation from Mediate.com to opine on the future of something near and dear to my heart and happily rekindle some old quarrels with colleagues”.

Peter Adler directs ACCORD3.0, a group of independent consultants specializing in foresight, fact-finding and consensus building. He is the former President and CEO of The Keystone Center and has held executive positions with:

  • The Hawaii Supreme Court
  • The Hawaii Justice Foundation
  • The Neighborhood Justice Center of Honolulu (later known as the Mediation Center of the Pacific)

Peter is also the author of Eye of the Storm Leadership and is a member of ACR Hawaii.

Brain Science and Conflict – Article by ACR Hawaii Member Thomas DiGrazia

Tom_DiGrazia

ACR Hawaii member Thomas DiGrazia is a Peacemaker, Lawyer and Director of the Mediation Center—Windward Oahu. He is an Adjunct Professor at Hawaii Pacific University, teaching graduate classes in Mediation and Conflict.

To read or print his “Brain Science and Conflict” article, which is taken from his soon to be published new book (Chapter 4) “Light On Peacemaking”, click here