Hernsberger QDRO Law September 2019
September 2019
QDRO Law Experts for Your Law Firm
We Swim in Toxic Emotions HOW TO PROTECT YOURSELF
There’s a dark side to practicing family law, and most of us in this practice never discover the darkness until it’s too late.
And so were many of my friends going back decades. They suffered through heart attacks, alcohol and drug abuse, broken marriages, suicide, disbarment, criminal convictions, humiliation, and shame. This is not a recent phenomenon. I’ve lost a lot of friends.
A True Story of Darkness
Dirty Little Secret
Let me tell you a true story that happened a few weeks ago.
Here’s the dirty little secret of family law practice: We swim in toxic emotions. All day, every day. That’s our job. But just like a fish doesn’t recognize the water it swims in, we don’t recognize the toxins we inhale just by doing our job. Eventually, emotional poison kills us.
“But just like a fish doesn’t recognize the water it swims in, we don’t recognize the toxins we inhale just by doing our job.”
It was a post-divorce dispute. I was in District Court to testify as an expert witness. Different attorneys mangled five retirement plans in a divorce plan three years ago. We were five minutes into the second day of trial. Five minutes of hell. Five minutes of mumbling
Hope for All of Us
and fumbling and stumbling through a routine cross- examination. “If I could have a moment, Your Honor,” the attorney said. He was rummaging through five stacks of papers, each two feet high, piled beside him. The judge had seen enough of this attorney: slurred speech, vacant eyes, unsteady gait, disoriented. Finally, the judge said, “We’re going to take a short break. Bailiff, please escort counsel to my chambers, alone.” The next thing we knew, the judge canceled the trial for the day. The attorney’s paralegal drove him home. The rest of the entourage for both sides had a free day. I never inquired what the problem was. Drunk? Abuse of legal prescriptions? Illegal drugs? It didn’t matter. I’d seen it too many times before. My friend lost his battle with the toxin that attacks us all.
I’ve discussed this professional epidemic with many family lawyers across Texas. The disease is widely recognized, but the antidote — not so much. I’d like to use a well-worn cliche: We are very good at ignoring the elephant in the room. Austin family lawyer Jimmy Vaught gave me the wisest counsel; I’ve never forgotten it. “Set boundaries,” he said. “We are not required to share the experience of our clients’ toxic emotions.” “Aha!” I said. Can it be true? I can choose to not be angry when my client is angry? I can choose to not hate along with my client? I can choose to be kind to the opposing counsel? I can choose to search for humanity in the opposing party? I can pursue my calling professionally, like an artist, without bullying or intimidation? I can extend courtesies without my client’s approval? I can do good? Will I not appear weak? Is this not heresy? I’m happy to confirm that there’s professional life after burnout. It seems just a distant memory for me. I’ve been fully recovered for a long time. But the pain returns every time I see a colleague go down. It’s true that family law practice has its dirty little secret.
A Professional Epidemic
But the cure is available for all of us: set boundaries.
I’m told there are only two types of divorce lawyers: those who have burned out, and those who have not burned out ... yet. I am among the former.
–Judge Stephen Hernsberger
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What Happened in Reed Springs? In 2002, the quaint town of Reed Springs, Missouri, declared bankruptcy. The hard decision came after the town was forced to pay $100,000 to Sally Stewart, a woman who sued Reed Springs after she tripped over a pothole during a shopping trip. News of a greedy woman ruining a small village to make a quick buck sparked outrage across the country. But Stewart wasn’t the real villain of this story. A little digging into this case reveals a much deeper conspiracy. in front of the pothole. However, the Missouri Court of Appeals determined the city of Reed Springs was liable for Stewart’s injuries. The court ordered Reed Springs to pay Stewart $100,000, over half the city’s annual budget. Despite the high price tag, in normal circumstances, this verdict wouldn’t have forced Reed Springs to declare bankruptcy because the town’s insurance would have covered the bill. Unfortunately, at the time of Stewart’s accident, the mayor of Reed Springs was a corrupt man named Joe Dan Dwyer.
How a Small Town Went Bankrupt Over a Pothole
Stewart had been visiting Reed Springs in 1998 when she tripped on a pothole hidden beneath some overgrown grass on the sidewalk. But this was no small stumble. Stewart tore two ligaments in her ankle and had to undergo surgery. To help pay for the medical bills, Stewart, who’d never sued anyone before, initially filed a personal injury lawsuit against the owners of the store
Dwyer left office while being investigated for insurance fraud, child pornography, statutory rape, witness bribery, and perjury, and he was later sentenced to seven years in federal prison. Among his many indiscretions, Dwyer also let the town’s insurance policy lapse. Reed Springs didn’t have insurance when Sally Stewart got hurt, which is why they had to write a check out of their own budget and ultimately declare bankruptcy. In this case, what started as a simple pothole accident quickly unveiled the lasting damage of an unscrupulous politician. Perhaps this case serves as reminder about why it’s important to vote in local elections.
QDRO Case Studies: Plan Administrators Make Mistakes Carol Nordstrom played it by the book. In her 2001 divorce from Charles Gault, the judge awarded Ms. Nordstrom 50% of Mr. Gault’s pension, valued as of the date of divorce. It was a textbook award that complied with Berry v. Berry. Everything went according to plan: Ms. Nordstrom’s attorney prepared a QDRO, the judge signed the QDRO, the attorney sent a certified copy of the QDRO to the plan administrator, and the plan administrator approved the QDRO and notified both parties. Fifteen years later, Carol Nordstrom received word that Mr. Gault had retired. So, Ms. Nordstrom contacted LyondellBasell to find out when she could expect her money. And thus began a three-month ordeal, where all Ms. Nordstrom got were evasion tactics and intentional deception. “That’s not my department.” “Let me transfer you.” Finally, LyondellBasell responded with a formal letter. “We approved your QDRO in 2001. The value of your benefit is a lump sum of $58,137.62. By mistake, we paid your benefit to Charles Gault when he retired. We suggest that you contact Mr. Gault to collect the funds from him.” Instead, Carol Nordstrom contacted us. What could go wrong?
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Gender-Neutral QDROs
The world has changed since you graduated from law school. Gender neutrality is a thing, so it’s time to review your pleadings — and your documents, contracts, correspondences, procedures, and every other form of communication in your office — in a new light. (I’m looking at you, Family Law Practice Manual.)
Shortly thereafter, the IRS issued Revenue Ruling 2013–17. The terms “husband,” “wife,” and “husband and wife” now include same-sex spouses by operation of law.
As of June 26, 2013, all qualified retirement plans must reflect the outcome of Windsor.
The trend is escalating. Futurologists predict that gender neutrality will soon become the law of the land.
In 2017, California became the first state to allow gender-neutral birth certificates. Some states are considering legislation to forbid the use of gender-specific terms. What’s another word for manhole? What will we call a ladybug? Hernsberger QDRO Law Firm has chosen to get ahead of the curve. We’re reviewing our documents and purging them of gender-specific terms. Our team is also participating in gender bias sensitivity training, and we’re searching for more things we can do to address this issue.
Family lawyers will not get a pass.
For us, it all began with United States vs. Windsor, 570 U.S.744 (2013).
The Defense of Marriage Act (DOMA) defined “marriage” and “spouse” as heterosexual unions. Windsor held that DOMA’s restrictive definition violated the Fifth Amendment’s due process clause.
It’s a new world. And we intend to stay relevant to our clients.
Be Inspired
The Goal
Our goal was to collect $58,137.62 from the retirement fund.
The Approach
We immediately contacted the plan administrator for the LyondellBasell retirement plan. Unfortunately, they responded with the same evasion and deception tactics.
We then prepared a petition alleging a violation of their fiduciary duties. Jurisdiction was in a federal court in Houston. Before filing, we mailed a copy of the petition to LyondellBasell with a formal demand. Within hours after receiving the demand and petition, LyondellBasell called us. They admitted that someone in the organization had made a mistake. They wanted to negotiate a resolution.
The Results
We engaged in an “interest-based” negotiation. It was in our interest that Ms. Nordstrom received the $58,137.62. LyondellBasell told us that they intended to collect the funds from Mr. Gault. That’s how they defined their interest. We agreed to wait 45 days before filing our petition in federal court. LyondellBasell agreed to pay $58,137.62 in 45 days or less, whether they collected from Mr. Gault or not, and there was indeed a happy ending: LyondellBasell paid Carol Nordstrom $58,137.62 just 20 days later.
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INSIDE This Issue
Toxic Emotions in Family Law PAGE 1 A Surprising Reason for Bankruptcy A Look at a Case: Plan Administrators Make Mistakes PAGE 2 Gender-Neutral QDROs PAGE 3 A Reading List for Real Success PAGE 4
Build a Millionaire’s Library BOOK RECOMMENDATIONS FROM THE ULTRA SUCCESSFUL
What does every successful person have in common? They read. Avid reading is a key characteristic of the ultra successful because, through great ideas, you can learn how to achieve your full potential. If you want to be more successful in business and in life, you should definitely add these great books to your reading list. ‘Business Adventures: Twelve Classic Tales From theWorld of Wall Street’ by John Brooks Who read it? Bill Gates, founder of Microsoft
‘It’s Not About the Coffee: Leadership Principles From a Life at Starbucks’ by Howard Behar Who read it? Katrina Lake, founder and CEO of Stitch Fix Starbucks is known for its quick coffee and seasonally controversial cups, but that’s not what turned the company into a world-conquering success. In “It’s Not About the Coffee,” Howard Behar highlights the importance of company culture and the role business leaders play in helping their team members reach their full potential. ‘Creativity, Inc.: Overcoming the Unseen Forces That Stand in theWay of True Inspiration’ by Ed Catmull With AmyWallace Who read it? Mark Zuckerberg, co-founder and CEO of Facebook Ed Catmull, co-founder of Pixar, is responsible for some of the most successful animated movies in the history of cinema. “Creativity, Inc.” explores the creative process behind such films and how this process can be replicated in any industry. Forbes has suggested that Catmull’s book “just might be the best business book ever written.”
Famously loaned to Bill Gates byWarren Buffett himself, “Business Adventures” was written and originally published
shortly after the stock market crash of 1962. In this book, John Brooks recorded the successes and failures of 12 major companies of the era, including Ford, Xerox, and General Electric.
‘Letters to a Young Poet’ by Rainer Maria Rilke Who read it? Jen Rubio, co-founder and president of Away
From 1903–1908, renowned German poet Rainer Maria Rilke wrote letters to a young, aspiring poet. These candid thoughts from one of the greatest artistic minds offer insights on life, love, and how to fully experience the world we live in. Each letter is a valuable reminder that we should never underestimate our own artistic spirit.
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