Ashby is a member of the Treasure Valley YMCA Human Resources Committee, chair of the Labor and Employment Law section of the Idaho State Bar, and a member of the Boise Chamber of Commerce Boise Young Professionals. Gustavson is the chair of the Idaho State Bar Business and Corporate Law Section, current secretary and former Especially Me! Chair of the Junior League of Boise, a member of the Idaho Women Lawyers Board of Directors, and a member of the Logistics Committee for the American Heart Association Go Red for Women Event.

The Accomplished Under 40 magazine was published in the June 14, 2013 issue of Idaho Business Review, and the recipients were honored at a dinner and awards ceremony at the Knitting Factory on June 13, 2013. Hawley Troxell was a gold sponsor of the event.

There are two aspects of human na­ture that can exacerbate the potential for conflict. First, it is easier to tell someone what they want to hear than to be forth­right. Second, we tend to hear what we want to hear. As a result, there may have been conversations between the decedent and one of the children that are contrary to the wording in the will. Even worse, a mother may have had separate conversa­tions with different children in which she “promised” the same thing to both. Add­ing to the emotional trauma of death is the short time in which funeral and burial decisions must be made. The decedent’s wishes may have changed over time, and the children may have heard different wishes from the deceased parent. Unfor­tunately, the one person who could set the record straight is no longer available to talk to. In short, it is easy to see why dis­putes often arise during the administration of an estate.

Perfect Storm

The likelihood for probate disputes is encountering a “perfect storm” due to the confluence of three recent factors. First, more wealth is being transferred from the older generation to the younger genera­tion than at any point in history. Second, we are encountering new family dynamics because the decedent’s children are often spread out around the country rather than remaining at home. Finally, the inheri­tance from one’s parents is now viewed less as a windfall and more as part of the child’s retirement plan.

Mediating a probate dispute, however, has unique challenges. There is the grief factor due to the passing of the parent(s). There are family issues not usually pres­ent in a business dispute. And, tax issues can arise and be very important. These unique challenges are discussed below.

Grief Factor

It usually takes several months after the decedent’s passing (and often longer) before probate disputes become ripe for mediation. This is because it takes some time for a Personal Representative to be appointed to administer the estate and then an additional period for the Personal Representative to start exercising his or her authority. Even so, the loss of what typically is the last surviving parent is an emotionally painful event that does not quickly dissipate.

Involvement of Family (Often from Birth)

Many business and personal injury disputes revolve around financial issues among parties that have no social relation­ship. Probate disputes are often just the opposite. Not only do the parties know each other, but they usually have known each other since birth. I have found it common among beneficiaries that there are unresolved issues relating from child­hood. Those unresolved issues may be unstated but often need to be uncovered to make progress toward a mediation settle­ment. For example, a common issue is perceived favoritism toward one child by a now deceased parent.

I vividly recall a mediation involv­ing two children from the husband’s prior marriage, two children from the wife’s prior marriage, and two children of the marriage. When the father’s daughter of the first marriage was getting married, the father drove out of state to attend. After arrival, he was told by the daughter that he was unwelcome at the wedding. The oth­er four children naturally carried a grudge toward their stepsister.

With some probing during the me­diation, I learned that the daughter would have loved to have had her father attend the wedding, but her mother told her in no uncertain terms that her father was not to attend. It turned out that the father had be­gun his relationship with his second wife while still married to the first wife. The first wife was extremely bitter and never wanted to see her ex-husband again. The daughter was closer to her mother and was put in the untenable situation of having to choose between her mother and father as to who would attend the wedding. As the mediator, I was allowed to share this with the other children and I believe this soft­ened some of the animosity that existed between them.

Multitude of Tax Issues

Many probates have significant tax issues lurking in the background. There may be income tax issues, step up (or down) in income tax basis issues, and es­tate tax issues. In certain circumstances, the parties can structure their mediation settlement in such a way as to reduce some of these taxes. In essence, it may be possible to reduce the tax burden and have that “additional money” be enough to bridge the financial differences be­tween the parties.

Benefits of Mediation

The probate court or other relevant forum needs to apply the law to the facts to reach a correct legal decision on the case. For example, there may be three roughly equal parcels of real estate to be divided among three children who do not get along, or between other beneficiaries named in the decedent’s will. The correct legal result might be that each beneficiary becomes a one-third owner of each of the three properties. This could lead to con­tinuing friction as they disagree over the management and use of the properties. By using mediation, it may be possible to have each child or beneficiary become the full owner of one of three properties, reducing the chance for conflict and let­ting each one move forward independent of the others. Similarly, the court may be constrained in some property distributions that result in higher taxes than might ap­ply if the parties were able to structure their own settlement. There is no free path to avoid taxes that normally apply, but if there is a legal basis for the settle­ment, significant tax savings may result.

Conclusion

A mediator can help guide parties to reach their own settlement. The parties in a disputed probate often carry extra bag­gage because of grief, longstanding inter­ personal relationships, and the absence of the one party who often could resolve the dispute. In addition, tax issues often per­meate the dispute. The mediator who can successfully meet these challenges may be able to achieve a rewarding experience for all included.

John McGown, Jr. is an Of Counsel attorney at Hawley Troxell and a member of the Tax, Estate Planning, and Probate group. John has particularly enjoyed the opportunity to mediate probate disputes and has been a Fellow of the American College of Trust and Estate Counsel since 1997.

*Article published in the May 2013 edition of The Advocate.

Bolinger formerly practiced law at Swanson, Martin, & Bell, LLP in Chicago, Illinois. He received his J.D., summa cum laude, from the John Marshall Law School in 2008, and his B.A. from Indiana University Bloomington in 2002. During his time at John Marshall Law School, he was a member of the Saul Lefkowitz Moot Court Team, and a recipient in 2006 of the Fred F. Herzog Scholarship for academic excellence.

Partners John Kurtz and Sheila Schwager were recognized for their work in bankruptcy and restructuring. Partners Nicholas Miller and Richard Riley were recognized for their work in the corporate and commercial areas. Partners Steven Berenter, Brad Miller, and attorney Kara Heikkila were recognized for their work in labor and employment. Partners Craig Meadows, Merlyn Clark, and Steven Schossberger were recognized for their work in general commercial litigation. Partner Brian Ballard was recognized for his work in real estate. The firm also earned recognition for the following practice groups: corporate and commercial, labor and employment, general commercial litigation, and real estate.

Chambers and Partners is a London-based company that ranks leading firms and attorneys in an extensive range of practice areas throughout America since 1990. Its team of 140 full-time researchers conducts thousands of interviews with attorneys and their clients worldwide.

GINA became law in 2008, but it has not received as much attention as other employment laws. The Equal Employment Opportunity Commission (EEOC), however, has recently signaled that it intends to ramp up its enforcement of GINA.

The EEOC just announced that it has brought a class action under GINA against a nursing and rehabilitation center, alleging that the defendant-employer “requires a class of applicants and employees to provide genetic information in response to questions about family medical history” as part of its pre-employment, return-to-work and annual medical exams of its staff. The EEOC noted in its press release concerning the case that “[o]ne of the six national priorities identified by the EEOC’s Strategic Enforcement Plan (SEP) is for the agency to address emerging and developing issues in equal employment law, which includes genetic discrimination.”

This case highlights the need for employers to be diligent and remain aware of GINA when formulating pre-hire procedures and requirements. Employers should be sure they are not requesting information regarding family medical history at any time during the hiring process or employment.

For more information about GINA contact John Ashby or call 208.388.4844.

On Friday, May 17, 2013, Busacker and attorney Kara Heikkila hosted a two-hour health care reform breakfast seminar at The Coeur d’Alene Resort regarding the information companies with over 50 employees should know to avoid health care reform penalties. CPAs, human resources executives, and other professionals were in attendance.

“The seminars provided a forum for local professionals from various industries to broaden their knowledge and network with one another. We had a great turnout and look forward to hosting them again next year,” said Quade who is located in Hawley Troxell’s Coeur d’Alene office at 401 Front Street, Suite 212.

Space is limited, so please RSVP here or call 208.388.4919 to reserve your seat.

The Department of Labor (DOL) recently provided guidance on this notice, required under the Patient Protection and Affordable Care Act (also known as Health Care Reform). Under this guidance, employers subject to the Fair Labor Standards Act (which generally includes all employers) must provide a notice to employees with the following information:

1. An explanation of the health insurance exchanges, including contact information and a description of the services provided.
2. The potential availability of premium tax credits for insurance coverage purchased on a health insurance exchange.
3. A statement that if the employee purchases coverage on a health insurance exchange, he or she will lose any employer contribution available through employer-sponsored coverage and that employer-sponsored coverage is paid for on a pre-tax basis.

Employers should note the following:

• The DOL has provided two model notices. One of the model notices is for employers with health plans (http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf) and the other notice is for employers without health plans (http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf).
• The model notices include blanks for employers to insert information about the employer and any employer-sponsored coverage available to the employee. This information is not required to be provided but will be helpful for employees who consider obtaining coverage from a health insurance exchange.
• The notice must be provided to all employees, regardless of part-time or full-time status.
• The notice may be provided in writing or, in some circumstances, it may be provided electronically to employees who either consent to electronic delivery or who use the electronic delivery system (e.g., email) as an integral part of their work.
• New employees hired on or after October 1, 2013, must receive the notice within 14 days of the employee’s start date.
• The DOL has also provided a revised model COBRA election notice. Employees and their dependents that become eligible for COBRA coverage are required to be provided a notice explaining that they may elect COBRA coverage. The DOL has revised its model election notice to include an explanation of the availability of the health insurance exchanges.

Beginning in 2014, shared responsibility penalties could apply to large employers based on inaccurate information reported by employees applying for exchange coverage. The exchange notice is a good opportunity for employers to provide accurate information regarding employer-provided coverage so that employees are less likely to report inaccurate information to an exchange. We suggest employers customize the notice to provide the information that will be requested by the exchange and to clearly explain whether employer-provided coverage will prevent an employee from obtaining subsidized exchange coverage. Please let us know if we can help you customize your notice.

For more information about this article or any other health care reform issues, please contact Bret Busacker or Bret Clark or call 208.344.6000.