HOT TIP for PRACTITIONERS

by Mary Cushing Doherty, Esquire

High, Swartz, Roberts & Seidel, LLP

Beware of Abatement: Avoid the Malpractice Risk if Your Client Survives

 1.                  New abatement case:  In re: Estate of James A. Bullotta, Jr. v. Carolyn Bullotta, 5/7/02 – Superior Court found an enforceable agreement between the parties.  The Consent Agreement had been read on the record.  The surviving Wife asks for abatement so the entireties property due to be deeded to Husband would pass to her.  The Court upheld the Agreement even though the divorce decree had NOT issued.

 2.                  Size up every case with the death of the opposing party in mind –

1. Are the assets secure for your client like real estate held by the entireties; joint accounts the client is monitoring; retirement assets with a survivor interest

2. Beware of unprotected savings.  Obviously assets held separately should be secured.  Be persistent with request for an asset preservation Order.  Should these be routinely approved?

3. Know your Non-ERISA, Non-REA pensions – all IRA; all government employees, most small plans.  Do you ask promptly for proof of beneficiaries?  Do you ask for an Order for beneficiary designation?  Do you want 100%?  Don’t forget you may be getting an asset in your client’s column.  If non-employed spouse is younger female, consider 50%.  Know if the beneficiary designation is subject to change.  Avoid this nightmare result:

                    (1)     Sell house and split proceeds;

                    (2)     Husband’s heart problems put him in hospital;

                    (3)     Negotiations falter, Husband names son as retirement beneficiary (non-ERISA pension);

                    (4)      4-year old divorce stalls; Husband dies;

                    (5)     $500,000+ asset goes to son;

                    (6)    W goes home mad; her lawyer sad.

 HOT TIP:  Only ERISA/REA pensions require Wife be named as 50% survivor beneficiary.

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