Articles Posted in Child Support

Child Support Woes of the 1%

There aren’t many whose earnings can make those of the Buffets, Kochs, Adelsons, Waltons and the like look paltry. But according to filings in his divorce case, billionaire hedge fund manager Ken Griffin may be one of them. Griffin’s ex-wife, Anne Dias, said his monthly gross income “approaches $100 million,” and his net monthly income after taxes “averages over $68.5 million.”

For those of us to whom such numbers do not even compute, that works out to $2.2 million a day, or upward of $90,000 per hour.

Dias’ filing is certain to escalate their ongoing dispute over child support, where she is asking for $1 million a month in child support. Griffin argues that amount is excessive and includes expenses such as private jets, $450,000 vacations and $6,800 a month for groceries that are mainly for Dias’ “opulent lifestyle.” He has told the court he will only fund expenses he deems “reasonable.”

Dias says she’s following Illinois law, which requires a parent to fund the children’s lifestyle in a way that is consistent with the lifestyle during their parents’ marriage. According to Dias, the expenses such as the jets and groceries are simply an accounting of all the couple’s child-related expenses while they were married.

“Ken’s false incredulity as to the cost of his children’s lifestyle—a lifestyle which he established and continues to enjoy with the children—is pure hypocrisy. “In her filing, Dias acknowledges the family’s large spending habits. But she says Griffin funded and created the lifestyle, so he has little reason to object.

“It’s a silly exercise to pretend the day-to-day living expenses for the Griffin children even remotely resembles the norm,” she said. But she adds, “Typical American families do not have a father with a net monthly income of just shy of $70 million.”

In California, child support is determined based on statutory guidelines that took effect in 1992. The Guideline is an algebraic formula and the factors used to determine child support are primarily based on income of both parties, the number of children and the time sharing arrangement – custody and visitation.

The Guideline result is deemed to be presumptively correct in all cases, but may be rebutted by evidence of various factors including that “the parent being ordered to pay child support has an extraordinarily high income and the amount determined under the formula would exceed the needs of the children.” Family Code, Section 4057(b)(3).

Individuals who earn an extraordinarily high income and are subject to child support payments may find that proportionally, their child support payments exceed the necessities of the child.  California law allows for exceptions to the child support calculations if an individual is able to prove their high-income status.

California Family Law §4055 sets forth the ordinary guideline for calculating child support payments.  However, §4057 provides the special circumstances under which this guideline can be set aside to account for high-income earning parents who are subject to a child support order.  Under this section, the individual being ordered to pay child support can ask for the ordinary guideline for child support to be put aside if he or she can provide evidence of the high income and show that the amount determined under the guideline formula would exceed the child’s needs.

Although California statutes provide the possibility of taking into consideration high-income earning parents when calculating child support payments, case law has not yet determined an exact number that qualifies an individual as a “high-income earning parent.”  The California Court of Appeals has ruled in previous cases that anywhere from $1 million to $12 million in annual income is considered an extraordinarily high income.  In the 1994 case of Estevez v. Superior Court, an income of “not less than $1.4 million per year” was considered an extraordinarily high income.  In 1996, the court found a similar guideline in McGinley v. Herman.  In 1998, in Johnson v. Superior Court, a professional athlete conceded his annual income to be $1 million, whereas his wife stated she believed his income to be $12 million.  Regardless, the court considered the athlete to be a high income earner.  In 2001, the court decided that an annual income of $1.7 million was extraordinarily high, from In re Marriage of Wittgrove.  Also in 2001, from In re Marriage of Hubner, the court found $1.175 million after taxes to be extraordinarily high.

The range of income levels from the court’s previous decisions goes to show that determining whether a parent’s income is considered extraordinarily high to qualify as an exception or whether those payments would exceed the necessities of the child is ultimately up to the court’s discretion.

In the event that the court determines the parent’s income to be extraordinarily high, it is up to the trial court’s discretion to determine the amount it considers to meet the needs of the child.  §4056 requires that the court state in writing or on the record the following: “(1) the amount of support that would have been ordered under the guideline formula, (2) the reasons the amount of support ordered differs from the guideline formula amount, and (3) the reasons the amount of support ordered is consistent with the best interests of the children.”

The time involved and the resulting costs in litigating such cases, with the extensive discovery and litigation about discovery, are immense. And really, so unnecessary if the parents are willing to put their children’s interests by reducing the conflict and working together to create a mutual and reasonable resolution. And it should cost no more than a couple minutes of Mr. Griffin’s alleged hourly pay rate.

With offices throughout the Bay Area, California divorce lawyer Lorna Jaynes provides innovative legal tools to resolve family law disputes without the bitterness, acrimony and excessive costs engendered by the adversarial process.

 

Child support payments are intended to help cover kids’ basic costs, including money for food, clothing, and shelter. Sometimes, other costs come up. As California’s Fourth District Court of Appeals recently explained, any healthcare-related costs that arise along the way are usually considered additional child support costs to be split evenly between divorced parents.

tightened-100-dollar-roll-1377964-mHusband and Wife separated in 2007. A court awarded Husband primary custody of the couple’s daughter in 2012 and ordered Wife to pay him $540 in monthly child support. The court also ordered Husband to pay Wife $1,800 in monthly spousal support. In reaching the decision, the court found that Wife was making about $2,000 per month, while Husband was bringing in roughly five times that amount.

Father went back to the court about five months later, informing it that a juvenile court had ordered the couple’s daughter to spend four months in an inpatient substance abuse program in juvenile hall or be placed in an inpatient rehabilitation facility. Father asked that Wife be ordered to pay half of the $8,000 per month it was going to cost to send Daughter to the out-of-state facility. He said Wife had insisted on sending Daughter to an inpatient facility and had agreed to foot half of the bill. Husband added that his savings were rapidly depleting and that he could no longer afford to pay spousal support, since he was paying for Daughter’s care.

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Many divorcing couples who wish to resolve the issues in their divorce with their personal and economic dignity intact, preserve or create a positive co-parenting relationship for the benefit of their children, save money and preserve assets, or for a host of other good reasons, choose mediation or Collaborative Divorce rather than litigation and traditional attorneys. Such folks tend to see divorce as a problem to be solved rather than a battle to be won.

But whatever process is used, divorce in California requires that a Petition for Dissolution and Summons be filed by one spouse and served on the other spouse in order to commence the dissolution process and to establish the court’s jurisdiction to terminate the marriage.

The Summons, in particular, can be problematic. The first page states, “You are being sued” and “you have 30 days to respond” and the second page sets forth numerous rules called automatic restraining orders. It is not uncommon for spouses who are trying to work together in a civil and respectful process to be shocked and somewhat hurt when faced with a document telling them they are being sued by their spouse.

The restraining orders prohibit either spouse from doing any of the following:

  1. Remove the minor child or children of the parties, if any, from the state without the prior written consent of the other party or an order of the court;
  2. Cashing, borrowing against, canceling, transferring, disposing of, or changing the beneficiaries of any insurance or other coverage, including life, health, automobile, and disability, held for the benefit of the parties and their minor child or children;
  3. Transferring, encumbering, hypothecating, concealing, or in any way disposing of any property, real or personal, whether community, quasi-community, or separate, without the written consent of the other party or an order of the court, except in the usual course of business or for the necessities of life; and
  4. Creating a nonprobate transfer or modifying a nonprobate transfer in a manner that affects the disposition of property subject to the transfer, without the written consent of the other party or an order of the court. Before revocation of a nonprobate transfer can take effect or a right of survivorship to property can be eliminated, notice of the change must be filed and served on the other party.

Parties must notify each other of any proposed extraordinary expenditures at least five business days prior to incurring these extraordinary expenditures and account to the court for all extraordinary expenditures made after these restraining orders are effective.

The principles and policies underlying the restraining orders generally make sense and are rules that should be followed by divorcing spouses for all of the right reasons. For example, assets should not be hidden, new debt should not be created, and insurance should stay intact until there has been adequate disclosure and agreements made.

Fortunately, divorcing couples using mediation or Collaborative divorce processes need never step foot inside the courtroom, but must comply with the requisite judicial paperwork, some more useful than others, to obtain a divorce. Issues of property division, child custody and child support, and spousal support can all be resolved by gathering all of the financial disclosure information and brainstorming and creating optimal outcomes for the entire family.

But there should be a way for those folks who are willing and able to resolve the issues with respect and civility outside of the courts, to obtain a divorce without the harsh and decidedly uncivil service of a summons. And furthermore, those folks who can solve their problems without the aid of the courts should have substantially reduced filing fees and not have to pay $435 for filing a Petition and another $435 for filing a Response.

However, since the state of California is unlikely to see the wisdom of this anytime in the near future, the best that divorcing couples can do is work with professionals who will explain the process to them together so that both can hear and understand at the same time and have their questions answered. It is very helpful in reducing the fear and anxiety that normally arises when one is served with a document that says, “You Are Being Sued.”

With offices throughout the San Francisco Bay Area, Collaborative divorce attorney and mediator Lorna Jaynes provides innovative legal tools to resolve many family law disputes without the bitterness, acrimony and out of control costs engendered by the adversarial process.

 

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baby-clothes-1406945-m.jpgChild custody and support are often common issues in California divorce proceedings, both for children born during the marriage, as well as those born prior to one or both spouses prior to their marriage.  In In re Marriage of Abbate, the Fourth District Court of Appeals explains the circumstances where a divorcing spouse may be required to pay support even if he or she isn’t the natural parent.

Ms. Camarata had a three-year old son when she married Mr. Abbate in 2005 and the parental rights of the biological father of the boy were terminated one year later. Abbate agreed to assume the role as the boy’s father, and the couple filed a petition for Abbate to become the child’s adoptive father the same year, but they divorced before the petition was approved.

In 2007, Camarata took her son to a hospital for treatment, asserting that that he’d been sexually molested. The boy was sent for therapy, which the court said continued until at least June 2010. Believing it was Abbate who had molested her son, Camarata left the marriage and filed a petition for divorce. She named Abbate as the child’s adoptive parent and asked for child support. A court granted a dissolution of the marriage in 2010, but denied the request for child support.

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If you’ve previously read this blog, you may already know that we generally advise divorcing spouses to avoid the court system as much as possible and to strongly consider alternatives to traditional divorce litigation, including mediation and collaborative divorce. A recent case out of California’s Fourth District Court of Appeals is a good reminder of one of the major drawbacks of the traditional system:  the significant possibility for unreasonable delay and improper judgments.

courthouse-1330873-mIn this particular case, the spouses’ divorce was assigned to a court commissioner. Since the judiciary is flooded with work, the powers that be have devised a system in which non-judge commissioners act as “temporary judges” to hold hearings and render decisions in divorce and other matters. However, this particular commissioner was not qualified to render a decision.

Husband and Wife divorced in 2004 and entered into a marital settlement agreement in which the couple agreed to split child care and health care expenses for their children, and Husband pledged to pay child support on a sliding scale that eventually increased to more than $800 per month. In March 2011, the San Diego Department of Child Support Services levied money from Husband’s bank account for unpaid support and filed two motions against him:  one seeking to modify the payments and require Husband to look for a job and the other asking a court to determine the amount that he owed Wife in past due support payments.

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Decisions about whether and how much child support a divorcing spouse or co-parent should pay often depend on both how much money he or she makes or could make. The latter factor, usually referred to as “earning capacity,” can be difficult to quantify in many cases, and even more so when the parent’s immigration status prevents them from legally working. The state’s First District Court of Appeals recently considered one such case.

money-trap1-771882-m.jpgHusband filed for divorce from Wife in 2011, and the parties agreed the following year to a stipulation where Wife retained sole physical custody of the couple’s only child. The stipulation also gave Husband visitation rights but didn’t require him to pay child support. In 2013, Husband filed a motion seeking shared physical custody and for the Wife to pay him child support. Husband explained to the court that he was an undocumented immigrant who had overstayed his visa. Because of this status, Husband said he wasn’t able to work as a traditional employee. Nevertheless, he said that he’d worked as a carpenter for roughly 20 years and was planning to be a self-employed carpenter.

At the time, Husband said he was making about $750 per month. Opposing the child support request, Wife said the trial court should impute to him an income of $2,600 per week based on past earnings. She pointed to a 2011 income declaration in which Husband said he was making $65 an hour as a carpenter and working 40 hours per week. Instead, the court imputed a “minimum wage earning capacity” to Husband and awarded him 15 percent custody of the child. The court also ordered Wife to pay Husband $54 a month in child support. Husband appealed the decision.

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“These are some of the dirtiest hands we have seen.”

nail-brush-2-340183-m.jpgCalifornia’s Second District Court of Appeals wasn’t talking about  in In re the Marriage of Boswell  was not referring to literal dirty hands, but about the family law doctrine of “unclean hands,” a principle that in this case cost a divorced spouse more than $92,000 in unpaid child support. As the Court explained, a person who has acted unethically can’t seek legal redress in a family law court for a situation that the unethical action helped create.

After Husband and Wife divorced in 1985, a trial judge awarded physical custody of the couple’s two children to Wife and ordered Husband to pay $70 per month in child support. Just two months after this ruling, according to the appeals court, Wife moved with the children out of California. She also changed their names and didn’t inform Husband of their new whereabouts. As a result, Husband didn’t see or communicate with the kids for 15 years. That changed when Wife suddenly sent the youngest child, then 16 years old, to live with his father.

In 2013, Wife sued Husband for arrearages on the child support, claiming that he owed her more than $92,000 in child support and interest that wasn’t paid after she skipped town with the kids. Both of the children were more than 30 years old at the time. Denying the claim, a trial court ruled that Wife was judicially estopped from seeking unpaid child support because she had “unclean hands.” Specifically, the trial judge said Wife had unjustly removed the children from their father’s life.

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Trust is the cornerstone of any marriage, and the lack of it permeates a great many divorces. In In re Marriage of Vazquez, California’s Fourth District Court of Appeal explains that lying about income and other information in a divorce proceeding can be very costly.

the-truth-shall-make-you-free-1437041-m.jpgHusband and Wife divorced in 2008 and the court ordered Husband to pay Wife an unidentified amount of monthly child support. Wife returned to court four years later, however, arguing that Husband committed perjury by purposely misstating his monthly income.

During the 2008 proceedings, Husband asserted that he earned about $9,550 a month. Three years later, however, Wife obtained his 2008 income tax return while seeking an order to force him to contribute to their child’s orthodontic expenses. The trial court granted Wife’s motion to compel Husband to respond to a demand for inspection of documents relating to his finances, including the tax returns, which showed that Husband made nearly $21,000 a month in income during the time of the divorce. The trial court set aside its previous child support order and entered a new order requiring Husband to pay more in current child support as well as $25,000 in sanctions and more than $36,000 in attorney fees.

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I’ve long believed that Californians thinking about divorce and grappling with related issues like child custody and support consider avoiding the time, cost and stress associated with the traditional judicial system by exploring alternatives like mediation and collaborative divorce. But sometimes, well actually very rarely, that’s just not possible. When proceeding in court, it’s vital to remember that there are a wide range of procedural rules that you must follow closely or otherwise risk losing your case. The First District Court of Appeals’ recent ruling in In re Marriage of Kosharek is just one example of that risk.

please-stay-on-path-578462-m.jpgMs. Kosharek sought to modify her former husband’s child support obligation in November 2011. She argued that Mr. Egorov didn’t spend as much time with their two children as had been anticipated in the original custody and support order issued at the time of their divorce. The order had assumed a roughly 50-50 split of time between the parents and crafted the support award accordingly. Egorov opposed the modification.

After hearings in August and November 2012, a trial judge issued a ruling finding that the children spent only about 22 percent of the time between March and August of that year with their father and ordered that he pay additional child support for this time as a result. The judge further found that the children spent equal time with their parents going forward from September 2012 and re-adjusted the child support obligation accordingly.

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For those who must litigate and who cannot afford to hire an attorney to represent them or who want to be in control of their own case, unbundled services can be a great solution.

Unbundled legal services, also known as limited-scope services, are legal services that are broken down and offered as individualized legal services, instead of “bundled” legal services–which generally means full legal representation. An attorney offering unbundled legal services makes it possible (and financially feasible) for someone to receive vital legal assistance without incurring great financial detriment.

In limited scope or unbundled representation, an attorney and client agree to limit the scope of the attorney’s involvement in a lawsuit or other legal action to specific items, leaving responsibility for other aspects of the case to the client in order to save the client money.

There are pros and cons to this approach. The pros for the client are saving money on attorney’s fees and possibly getting the case/issue resolved at a faster pace. The cons are that there are oflten pitfalls for those untrained in the law, so if a matter is complicated or if you feel it is too complicated for you, then perhaps full representation is warranted.

TYPES OF UNBUNDLED LEGAL SERVICES

• Consultations

• Legal and Court Coaching

• Document Review

• Preparation of Documents

For example, if you are getting a divorce and you only want an attorney to help prepare the documents that you will need to file, the document preparation is an unbundled service.

Quite often, folks do their own divorce but find that the paperwork, particularly at the end of the process, is more burdensome than they had anticipated and find unbundled services to complete the process to be very helpful.

In another situation, one may derive great benefit from having an attorney draft a declaration as part of a Request for an Order or a Response to a Request for an Order. It is very important that these declarations be as clear and concise and as well written as possible while also conveying the relevant information that is important for the judge’s decision. Relevance is key, the only information a judge wants to see is information that is relevant to the issue to be decided and it is common for non-lawyers to add information that may be very important to them, but is not relevant in terms of the legal issue to be decided. Judge’s have volumes of material to read before hearing a matter and don’t like to have to read material that is not relevant and/or not well written. It is to a litigant’s benefit to provide written material that will not irritate the judge.

The Law & Mediation Office of Lorna Jaynes offers unbundled services to suit your needs and will help you evaluate whether using an unbundled service will work for you. Our compassionate services will provide you with the information you need to move on with your life, so contact us to learn more about these services.