Divorce involving equitable distribution of retirement accounts. Parties have a total of 7 retirement type accounts. Initial discovery Wife lists all accounts together and under other assets states ESOP - unvested. During mitigation OC asks if we would allow wife to reduce this figure by the max cap gains rate of 15%. I agree (wanted this over and my former atty's middle name was Settle). That was the last time cap gains was mentioned with regards to this asset. I was never able to locate a statement displaying the value or holdings in the ESOP. I has exercised options from my ESOP and due to most option plans being discriminatory they are noi qualified retirement plans. Accordingly, the plan may or may not provide statements. Knowing this, I assumed we would get into valuation issues (which can be difficult if variables are not agreed to) at a later time.
Long story shortened - Wife was a participant in an employee stock OWNERSHIP plan not Option plan. A qualified plan covered by ERISA and governed by tax code/regs which are the same as 401(k)'s, IRA's. etc. Wife/OC purposely allowed the misinterpretation to continue (both I and former atty thought asset contained options, per review of statements made in court transcripts). The asset was always segregated from other retirement accts and was the only asset of both parties to be "tax effected at 15%". Cap gain reference was made by my atty, but never from OC. Wife's ESOP was displayed, discussed and grouped with the Options I had exercised when valuating our retirement assets. Clause in paragraph regarding valuation of both parties IRA's and 401(k)'s says "No contributions to be included". Draft of agreement has a blank for number of shares/options held by Wife's ESOP. Atty asks me how many shares she has, and I say I dont know I have never seen any doc stating a figure. He says I think approx 500 shares. I say I dont know, so go with that I guess. Get draft back from OC and 500 is crossed out with a figure of 232.05 in its place. I ask, where did this come from? Did your paralegal confirm this number? He says yes. This was a non adjudicated agreement and was executed by both parties.
9 months go by after divorce decree with no discussion regarding this distribution. I call ex asking if she knew of a reason for the holdup. She says no. Call atty and they send me a calculation prepared by spouse (A licensed CPA as am I). I start ticking off the numbers corresponding to source documents and come to the ESOP, which I am unable to verify. Call atty's paralegal and request copy of documentation she used to verify this acct. She says I sent that to you months ago, look around and you will find. I said just faxing me a copy would save us both time. She refused stating I had the doc in my possession (somewhere). Called Ex with same request and got the same response i.e. No already provided.
Antennas have now risen so I go to her employer's website and discover it is an Ownership plan vs. Option. I call atty saying we have been intentionally deceived with their presentations and discussions. He claims ignorance and needs to look at file. He doesnt call so I attempt to reach him or his para to discuss. They were always out or busy. Two weeks later he disengages citing lack of cooperation on my behalf.
I am almost fine with this as I was beginning to have doubts with his in-court rep. skills anyway. I ask for my file and he says not until I pay his bill in entirety. I told him I have some issues with his billing and I dont believe he was entitled to full payment as he had given me the possible conclusion he did not have documentation for an asset he had stated was correct. I said also, I believed he was as deceived as I; so wouldnt we have a case against wife and possibly OC? He just said, pay the bill and you get the file.
I was not able to secure new representation before next hearing date and in my naivete decided per se would work just as well as former atty. It was black and white clear the deception employed and certainly the Judge would affirm. LOL Only issue I was able to have the Judge scrutinize was the provision "No contributions to be included" as the only account wife had excluded some contributions was her ESOP. ( Ownership plans are NON-contributory meaning only the employER makes contributions to the account)
Do I have a case against former atty for malpractice, breach of implied fiduciary duty or negligence?
Anyone contemplating or in the middle of a divorce I have learned a few things:
1. Dont talk to ANYONE about the divorce. Sources are anyone and everyone who will relay info back to your future ex.
2. Dont think others will be fair.
3. Dont count on your atty to make it right. This is a job for him/her not a crusade.
4. Dont think the Judge will make it right. He is there to rule on the law, and has heard stories like yours many, many times.
5. Dont sign anything until YOU can verify specific numbers and/or understand what the verbiage is stating, regardless of your or your ex's atty's
impatience.
:nuts
Long story shortened - Wife was a participant in an employee stock OWNERSHIP plan not Option plan. A qualified plan covered by ERISA and governed by tax code/regs which are the same as 401(k)'s, IRA's. etc. Wife/OC purposely allowed the misinterpretation to continue (both I and former atty thought asset contained options, per review of statements made in court transcripts). The asset was always segregated from other retirement accts and was the only asset of both parties to be "tax effected at 15%". Cap gain reference was made by my atty, but never from OC. Wife's ESOP was displayed, discussed and grouped with the Options I had exercised when valuating our retirement assets. Clause in paragraph regarding valuation of both parties IRA's and 401(k)'s says "No contributions to be included". Draft of agreement has a blank for number of shares/options held by Wife's ESOP. Atty asks me how many shares she has, and I say I dont know I have never seen any doc stating a figure. He says I think approx 500 shares. I say I dont know, so go with that I guess. Get draft back from OC and 500 is crossed out with a figure of 232.05 in its place. I ask, where did this come from? Did your paralegal confirm this number? He says yes. This was a non adjudicated agreement and was executed by both parties.
9 months go by after divorce decree with no discussion regarding this distribution. I call ex asking if she knew of a reason for the holdup. She says no. Call atty and they send me a calculation prepared by spouse (A licensed CPA as am I). I start ticking off the numbers corresponding to source documents and come to the ESOP, which I am unable to verify. Call atty's paralegal and request copy of documentation she used to verify this acct. She says I sent that to you months ago, look around and you will find. I said just faxing me a copy would save us both time. She refused stating I had the doc in my possession (somewhere). Called Ex with same request and got the same response i.e. No already provided.
Antennas have now risen so I go to her employer's website and discover it is an Ownership plan vs. Option. I call atty saying we have been intentionally deceived with their presentations and discussions. He claims ignorance and needs to look at file. He doesnt call so I attempt to reach him or his para to discuss. They were always out or busy. Two weeks later he disengages citing lack of cooperation on my behalf.
I am almost fine with this as I was beginning to have doubts with his in-court rep. skills anyway. I ask for my file and he says not until I pay his bill in entirety. I told him I have some issues with his billing and I dont believe he was entitled to full payment as he had given me the possible conclusion he did not have documentation for an asset he had stated was correct. I said also, I believed he was as deceived as I; so wouldnt we have a case against wife and possibly OC? He just said, pay the bill and you get the file.
I was not able to secure new representation before next hearing date and in my naivete decided per se would work just as well as former atty. It was black and white clear the deception employed and certainly the Judge would affirm. LOL Only issue I was able to have the Judge scrutinize was the provision "No contributions to be included" as the only account wife had excluded some contributions was her ESOP. ( Ownership plans are NON-contributory meaning only the employER makes contributions to the account)
Do I have a case against former atty for malpractice, breach of implied fiduciary duty or negligence?
Anyone contemplating or in the middle of a divorce I have learned a few things:
1. Dont talk to ANYONE about the divorce. Sources are anyone and everyone who will relay info back to your future ex.
2. Dont think others will be fair.
3. Dont count on your atty to make it right. This is a job for him/her not a crusade.
4. Dont think the Judge will make it right. He is there to rule on the law, and has heard stories like yours many, many times.
5. Dont sign anything until YOU can verify specific numbers and/or understand what the verbiage is stating, regardless of your or your ex's atty's
impatience.
:nuts