Friday, October 14, 2005
Case Law Development: Divorcing Couples Bound by Characterizations of Property for Tax Purposes even if Sham Transactions
If families characterize transactions as gifts to one spouse for gift tax purposes, may the court characterize the nature or intended recipient of that transaction differently for purposes of determining the marital estate? In this case, Husband’s parents, in order to avoid federal gift tax liability, twice wrote $10,000 checks to their son and separate $10,000 checks to their daughter in law in order to help with remodeling the couple’s home. When Husband and Wife divorced, Husband claims that the $20,000 given to Wife was actually intended as a gift solely to Husband and so should not be included in the marital estate. The trial court agreed, but the Georgia Supreme Court held that “Although it is permissible to legitimately arrange one's affairs so as to minimize or avoid taxes, it is impermissible to engage in sham transactions designed to camouflage the actual situation. Equity will not relieve the parties from such sham agreements." (internal quotations and footnotes omitted)
Wife also argued that the trial court erred by failing to consider the value of Husband’s in-kind economic benefits as income for purposes of calculating child support. Wife argued that the value of Husband’s employer’s contributions to health insurance and pension benefits, for example, should have been included in the income calculation. The supreme court disagreed, noting that Georgia statutes allow but do not require consideration of fringe benefits in calculating the gross income for purposes of setting child support. Since the benefits in this case were not considered a part of Monson's gross income for income tax purposes, and were not for daily personal living expenses, such as automobile or housing expenses, the court held that the trial court need not have included these benefits in the income calculation. The court also noted that an amendment to the child support statute that would be taking effect in January 2006 specifically provided that fringe benefits "shall be counted as income if they significantly reduce personal living expenses. "
Hayes v. Hayes, 2005 Ga. LEXIS 659 (October 11, 2005)
Opinion on the web at http://www.gasupreme.us/pdf/s05f0738.pdf (last visited October 12, 2005 bgf)
As a side note, this case came to the supreme court as part of its pilot project to grant all non-frivolous discretionary appeals in domestic relations cases.
Wednesday, October 12, 2005
Maria Guevara, age 18, who no longer lives with either parent but has her own apartment, has sued her parents for child support. She says that she had a strained relationship with her father, who she said physically abused her when she was younger -- a charge he denies -- and she said her mother was too strict, setting an early curfew and denying her money for restaurants and fashionable clothes. Following her move from her mother’s home, she sued her parents for child support in Nassau Family Court. Under New York law, young people between the ages of 18 and 21 fall into a special category: They are old enough to move out of their parents' house, but young enough to be supported by them in most cases, according to some legal experts. Cases in New York of this kind have reportedly been decided for and against persons in Ms. Guevara’s situation. Source: Ann Givens, Newday, newsday.com. For the complete story, click here (last visited October 12, 2005, reo).
Monday, October 10, 2005
The Pennsylvania State Supreme Court recently adopted new child support guidelines that decrease the support obligation for the majority of parents, especially those in the upper income levels. The effect will be significant for some parents, with decreases of as much as 30 percent. The changes to the economic support calculations were based partly on a national study of the costs of raising children by David M. Betson, an economics professor at Notre Dame. The state also used Mr. Betson's research, developed for the U.S. Department of Health and Human Services and used by two-thirds of the states, for the previous review in 1999. When Mr. Betson updated his research four years ago, the cost of child-rearing expenses decreased …
by Mike Bucsko for the Pittsburgh Post-Gazette
http://www.post-gazette.com/pg/05283/585835.stm (last visited October 10, 2005 bgf)
Saturday, October 8, 2005
The South Carolina Supreme Court was asked Friday to overrule a lower court order requiring a biological father to pay child support for a 40-year-old mentally disabled daughter. The father was ordered in 2001 to pay $91 weekly to support his daughter. The mother had filed a lawsuit in 1999 seeking child support for her then-34-year-old daughter, who lives with her in Lexington County. The couple never married and did not have a long-term relationship. The father argued that a family court judge should have dismissed the lawsuit against him because the deadline to bring a paternity action had expired. He also claimed that the amount ordered was excessive because his daughter already receives about $775 a month through her part-time job and federal disability payments. The South Carolina Court ruled unanimously in 2003 that a divorced father must pay child support for his then-27-year-old daughter, who had a genetic disease that causes mental retardation and severe muscular weakness. Source: Associated Press, MyrtleBeachOnline.com.For the complete story, click here (last visited October 8, 2005, REO).
Sunday, September 25, 2005
A lawsuit filed Thursday claims that officials in Denton County,Texas have violated the Texas Constitution by paying for attorneys appointed in divorce cases. The lawsuit seeks to bar the county from making any more payments to attorneys representing children in cases not involving Child Protective Services or the state. It is alleged that the lawsuit was brought after it was learned that District Court Judge Vicki Isaacks was billing the county for attorneys she appointed to represent children in divorce cases. . . . Texas family law specifies that counties are responsible for paying for attorney appointments in CPS and criminal cases, including nonpayment of child support. However, Professor Jack Sampson, who co-wrote Sampson & Tindall's Texas Family Code, said the county isn't obliged to pay attorney fees in private cases. By: Dave Moore / Denton Record-Chronicle, The Dallas Morning News, dallasnews.com.Click here for complete story. (Last visited September 25, 2005, REO).
Sunday, September 18, 2005
The Mississippi courts have been working their way through the allocation of private school tuition in child support, and apparently have yet to find agreement. In 2002, the Mississippi Supreme Court held, in a 5-4 opinion, that private school tuition is, by itself, an inadequate basis for a child support award in excess of the statutory guidelines. Southerland v. Southerland, 816 So. 2d 1004, 2002 Miss. LEXIS 133 (Miss. 2002). Since then, lower courts have struggled with the scope of this holding. This past week, the courts of appeals issued two opinions on the same day that came to opposite results on whether private school tuition could be ordered separate from child support.
Striebeck V Striebeck, 2005 Miss. App. LEXIS 639 (September 13, 2005) http://www.mssc.state.ms.us/Images/OPINIONS/CO28988.PDF (last visited September 17, 2005)
and Roberts V. Roberts, 2005 Miss. App. LEXIS 638 (September 13, 2005) http://www.mssc.state.ms.us/Images/OPINIONS/CO28988.PDF (last visited September 17, 2005)
Neither case explains its decision very completely and it is difficult to reconcile the cases…
Wednesday, September 14, 2005
Survivors of Hurricane Katrina who sought shelter in Texas may call a toll-free number to arrange to get their Louisiana child support payments. Texas Attorney General Greg Abbott and Louisiana child support director Robbie Endris are urging parents to call 1-800-256-4650 to report their new addresses. . . . The toll-free number for the Louisiana Customer Service Center is available daily from 7 a.m. to 7 p.m. CDT.Parents also may access the child support payment inquiry screen at www.dss.state.la.us. But they must know their user ID and PIN to do so. By: KWTX.com.
http://www.kwtx.com/home/headlines/1842077.html (Last visited September 14, 2005, REO)
Wednesday, September 7, 2005
The Vermont Supreme Court will hear arguments on whether a former Vermont woman can avoid paying child support because of her religious beliefs. The Vermont Office of Child Support in 2003 received a court order allowing it to suspend the driver's license of Joyce Stanzione, a former Vermont resident who has not paid child support since she separated from her husband in 1991.Stanzione is a long-time member of the Twelve Tribes Messianic Community in Florida and is not allowed under church law to have an income, said Jean Swantko, her attorney. Suspending her license because she has no income violates the First Amendment of the U.S. Constitution, which protects religious freedom, said Swantko, who is also a member of the Twelve Tribes Community. Information from: The Times Argus, Boston.com news.
http://www.boston.com/news/local/vermont/articles/2005/09/05/woman_says_religion_prevents_her_from_paying_child_support/ (Last visited September 7, 2005, REO). Additional information: TimesArgus.com, http://www.timesargus.com/apps/pbcs.dll/article?AID=/20050905/NEWS/509050320/1003 (Last visited September 7, 2005, REO).
Tuesday, September 6, 2005
In an interesting case involving an attorney father who overpaid child support and then fell in arrears after he quit his high-paid position to become a public defender, the Tennessee Court of Appeals held that overpayments are to be treated as gifts unless proven otherwise. The court also found that the attorney's decision to change jobs was a voluntary underemployment which would not justify lowering child support.
DeWerff v. DeWerff, 2005 Tenn. App. LEXIS 555 (August 31, 2005)
Text of Opinion on web at http://www.tsc.state.tn.us/OPINIONS/TCA/053/DeWerffOPN.wpd
Sunday, August 28, 2005
Rodney P. v. Stacy B., 2005 Ky. LEXIS 245 (August 25, 2005)
This case of first impression, the Kentucky Supreme Court examines child support obligations for an incarcerated child. Here, Mom had custody of two children. She moved to modify Dad’s child support payments based on Dad’s increased income. Dad responded that, because the oldest child was in state custody for status and delinquency offenses, child support should be calculated based on Mom's custody of one child rather than two. Mom did not provide any evidence that she was providing support for the incarcerated child or had expenses related to her custody of him. Dad argued that, because the state could sue him to collect the costs of support for the son, if he were also ordered to pay Mom support for the son, he would end up paying twice.
The court reviews the few cases across the United States involving incarcerated children and child support, noting that, while most held that parents had a continuing duty of child support for an incarcerated child, those cases were ones in which the parent was seeking to terminate the support obligation entirely under an emancipation theory. Here, Dad was not seeking to terminate his support obligation, but rather to have support calculated as if he were the custodial parent of the incarcerated son. The court agreed with this approach.
Text of opinion at http://www.kycourts.net/Supreme/SC_Opinions.shtm
Saturday, August 27, 2005
(Column) After applauding Missouri in my column for passing a law that protects Reservists and Guard Members from child support arrears as they go from high-paying civilian jobs to lower pay on the front lines of Iraq and Afghanistan, I recently learned that Governor Arnold Schwarzenegger may soon sign a bi-partisan supported bill (SB 1082) that would protect individuals with current custody orders in addition to fair child support protection that does not punish activated or deployed parents who can no longer exercise their parenting time. . . . The pending legislation addresses both the modification of child support payments and child custody orders. Michael Robinson, a lobbyist on family court issues in California who spearheaded the bill through the California Assembly and Senate, appears to have been successful in convincing California legislators that when military personnel are sent to potentially face death in Iraq, it is grossly unfair to allow ex-spouses to take advantage of this situation by filing suit for custody of the children when deployed service members are in no position to fight for their rights in court. . . . Because of the Bradley Amendment, a child support order can only be modified retroactively to the date of a filing of a petition. In so far as many reservists are called up on short notice and are not able to file a petition for a reduction in their monthly child support amount before they are deployed, they can return with arrearages, penalties and interest that cannot be forgiven. By Captain Gene Thomas Gomulka, Military.com.
http://www.military.com/NewContent/0,13190,Gomulka_082905,00.html (last visited August 27, 2005).