Articles Posted in Child Support

Marriage of Burmester highlights the disastrous consequences that can result from poorly worded or structured child support agreements and orders.

moneyShortly before Husband and Wife divorced in 1999, they entered into a marital settlement agreement / court order resolving support, property division, and other issues related to the dissolution. Husband would pay Wife $803 per month in child support–$368 in base support and a $435 child care allowance–for their two kids. That was the first mistake – including the daycare as part of the monthly child support amount. To whatever extent the parties share or pay for daycare it should be separate from the child support payment. The child support obligation would be retroactive to September 2008, the month in which Husband and Wife initially separated. Husband paid more than $48,000 in child support over the next 14 or so years.

Husband lost his job in 2013 after suffering an unknown physical injury. He wasn’t able to work at this time, and he underwent surgery and rehabilitation. And the second mistake was not going back to court to modify support and stop the daycare order when not needed. Wife also lost her job at around the same time. She eventually went back to court, seeking child support arrears from Husband. Although the parties agreed that both children became emancipated and were no longer entitled to support by 2014, the trial judge said Husband owed Wife more than $70,000 in unpaid earlier support. After adding interest in the amount of some $27,000, the trial court hit Husband with a $97,000 bill for the unpaid support.

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Divorce can result in several tax issues, including which parent will claim the child-related tax breaks. Sometimes, but not always, it is the parent that claims the child as a dependent.

Dependency Exemption

For tax purposes, the parent who has custody for the greater part of the year, ie more than 50%, is the parent who can claim that child and is called the custodial parent. The other parent is considered the noncustodial parent.

California law operates under a set of guidelines in child support cases that is used to calculate a parent’s support obligations based primarily on each parent’s income and time with the child. The overall aim of the guidelines is to set the support at an amount that attempts to equalize the living standard in both homes. The guidelines calculation is generally presumed to be correct, but there are some circumstances in which a court may choose to order support at an amount lower than the calculated rate. As the Fifth District Court of Appeals recently explained, that includes situations in which the paying parent has an “extraordinarily high income,” and the guideline amount is more than the child needs.

boarder-1536813Mother and Father’s four-year marriage was annulled in 2004, after it was found that Mother was still married to her first husband. They had two daughters:  one born during the marriage, and the other born in 2008. Mother lived in Bakersfield with the children, as well as with a son that she had with her previous Husband and another daughter that Father had from a previous marriage. Father paid Mother more than $17,500 in child support per month for his three children. As a member of the Manuel Band of Mission Indians, Father received annual distributions from the tribe based on its profits from a casino. That money often totaled more than $2 million per year, according to the Court. He wasn’t employed and didn’t have any other sources of income.

Mother went to court in 2012, asking a judge to order Father to pay her at least the guideline child support amount of about $20,000 per month for the couple’s two daughters. The court declined, setting the amount instead at roughly $12,500. It said that the amount “would adequately ensure that the children’s needs will be provided for.” Mother had been receiving nearly this amount from Father for the two kids prior to the ruling, the court said, and failed to show that it wasn’t enough to meet the children’s needs.

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Gwyneth Paltrow’s announcement on her website Goop last year that she and husband Chris Martin were divorcing presented the views of Dr. Habib Sadeghi & Dr. Sherry Sami, apparently experts on what it means to divorce. Sadeghi and Sami use evolutionary biology and the structure of the human skeleton (“Life is a spiritual exercise in evolving from an exoskeleton for support and survival to an endoskeleton”) in order to explain why a divorce might happen. Good grief. One might think that a simple press release announcing the divorce would suffice, but apparently the star feels the need to use her divorce as an occasion to enlighten us all. Regardless, the impetus and intent behind so called “conscious uncoupling” is a good one.

It is about putting the children first by minimizing conflict and supporting the child’s relationship with the other parent. A thoughtful process can help couples from regressing into immature and harmful behavior. They can be helped to understand why they chose to end the marriage and how the process can be managed without unnecessary harm to any children and without catastrophic financial consequences. Disputes about custody, visitation, and spousal support can be addressed with much less anger if the couple elects to approach the end of their marriage “consciously,” instead of trying to hurt the other person.

The term conscious uncoupling derives from psychologist Katherine Thomas Woodward and the goal is to to negotiate the end of a romantic relationship with goodwill and respect; in a way that enriches rather than wrecks lives. Katherine is a romantic and a realist; a fan of marriage and love who endeavors to explore the possibility that couples seeking her guidance in ending their relationship might actually stay together. But also, she argues that the ideal of lifelong monogamy is antiquated: researching the ‘happy-ever-after myth’, she discovered that it emerged 400 years ago and ‘had a lot to do with the life conditions of the time – many people died before the age of 40’. The Goop article also references the academic journal Evolutionary Anthropology, stating that we are living too long for marriage to one person to be a sensible choice. We are out of evolutionary synch, and shouldn’t feel wretched that we want out, it’s normal.

California courts typically look at both the kid’s needs and the parents’ ability to pay when considering child support after a divorce. The second factor often centers on the former spouses’ incomes, but sometimes that figure doesn’t tell the whole story. The Second District Court of Appeals recently considered a case in which one spouse had at least some of his money tied up in fancy artwork.

art-1419766Husband and Wife separated in March 2011, following nearly four years of marriage in which they had one child. They later entered into a marital settlement agreement, where Husband agreed to pay Wife $600,000 over a certain period of time in exchange for Wife waiving her right to spousal support, and to pay $1,500 per month in child support. The spouses agreed to share legal and physical custody of their daughter, with the child staying with Husband three nights a week.

A trial court in June 2014 granted Husband’s request to increase his time with Daughter and to give him sole legal custody for the purpose of Daughter’s therapeutic treatment. The child suffered developmental delays as a baby and had been in therapy ever since. Wife had recently been treated for alcoholism and bipolar disorder, and Husband was concerned that the child wasn’t getting to school or her therapy appointments. The court also granted Wife’s request to increase child support, but it raised the amount to just over $2,000 instead of to the $6,000 per month that Wife sought.

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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.

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.

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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