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Who gets to claim the child tax exemption? March 10, 2008

Posted by margolinlegal in Child Custody, Child Support, Dissolution, Myths, settlement.
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istock_000004891591xsmall.jpg Clients often come to me asking whether they or their ex-spouse/unmarried parent of their child can claim their joint child as a dependents for tax purposes and receive the dependent tax exemption. They often think that this is a decision that is up to them and attorneys often use it as a bargaining chip.

In a divorce or custody case I am representing clients in state court. The United States Congress, through the tax code, has determined how the child/dependent tax exemption should be awarded. The supremacy clause of the United States Constitution prevents state courts from deciding issues of federal law. This means that a state court cannot properly award the exemption to a parent who otherwise would not qualify for the exemption under federal law.

The qualifying parent under IRS rules is the “custodial parent,” which is defined as “the parent having custody for the greater portion of the calendar year.” The award of “legal custody” has no effect on this definition, rather the custodial parent is “the parent with whom the child resides for a greater number of nights during the calendar year.” In cases where the child resides an equal number of overnights with each parent, the parent with the higher adjusted gross income for the calendar year is awarded the exemption.

Parties can agree to share the exemption or to have the parent that does not qualify receive the exemption. This is usually accomplished by a provision in the parties’ judgment. In order to provide the non-qualifying parent with the exemption, the qualifying parent must sign a written declaration and the declaration must be attached to the non-custodial/non-qualifying parent’s income tax return. This can be completed using IRS tax form 8332, which can be found here http://www.irs.gov/pub/irs-pdf/f8332.pdf.

A decision to allocate the dependent exemption to the non-qualifying parent should not be taken lightly. In addition to the exemption, the non-qualifying parent will also receive the child tax credit. Therefore, an agreement to deviate from IRS rules can have significant tax impacts for the qualifying parent and creat a tax windfall for the non-qualifying parent. If the agreement will be included as a provision in a judgment, the decision to do so should be carefully discussed with your attorney.

The IRS faq located at http://www.irs.gov/faqs/faq-kw46.html provides detailed information on this question.

Here come the brides: the Oregon Family Fairness Act February 17, 2008

Posted by shelleycm in Child Custody, Child Support, Dissolution, Domestic Partners.
3 comments

With the Oregon Family Fairness Act (OFFA) now in effect, registered domestic partners now have some of the same rights as a married couple, at least in Oregon and any other state which chooses to recognize these partnerships.* This post explains what a domestic partnership is, both for heterosexual and same-sex couples, and what the benefits of registering are for same-sex couples.

Let’s start with what seems like the easy part: what are domestic partnerships? Under OFFA, same-sex couples over 18 may register as partners. However, heterosexual couples may not register as partners (primarily because they already have the ability to receive these benefits through marriage). Because the Oregon Constitution limits marriage to heterosexual couples, a separate mechanism for uniting families was required. (Check out the Basic Rights Oregon website for a wonderful guide to the legislation.)

But what are these automatic rights married couples get that unmarried and unregistered domestic partners don’t have?

Some rights are obvious: for example, to make medical decisions for a partner when the partner is unable to make those decisions him or herself or to automatically inherit property if a partner dies without a will. Others aren’t as obvious, like the ability to claim wrongful death benefits or crime victim survivor benefits if a partner is killed.

Some rights are provided by the state, like the automatic inheritance of a partner or how custody would be determined in a partnership dissolution, because inheritance and family laws are set by the state. Other rights are federal, like the ability to file jointly on federal income taxes. Oregon’s domestic partnership law can only affect state-provided rights. Subsection 9 of the legislation provides that “any privilege, immunity, right or ben3efit granted by statute, administrative or court rule, policy, common law or any other law to an individual because the individual is or was married….is granted on equivalent terms, substantive and procedural, to an individual because the individual is or was in a domestic partnership…”

It doesn’t get more equal than that in Oregon, save in name alone. Additionally, registered partners also have all the same responsibilities as married couples!

But since this is a legal blog, we’re mostly concerned about the juicy bits – those rights dealing with estate planning, wrongful death claims, adoptions, custody, and, of course, dissolution of the partnership.

But first, a little history. Some readers might be surprised to learn that domestic partnerships in family law courts aren’t new in Oregon. In fact, Oregon family law courts have dissolved an increasing number of heterosexual domestic partnerships. In doing so, the court would look back and determine whether or not the parties actually intended to form a domestic partnership: even though these are relationship dissolutions, frequently one party argues it was not a partnership (usually the party with assets) and the other argues that it was (usually the party with fewer assets). To find out what the parties intended, the court uses a test usually used in the context of business partnerships – did the parties intend to pool resources and share liabilities? If the answer is yes, then the court tries to find an equitable way to divvy up the parties’ resources. If no, then the parties keep their separate property.

Sounds easy, right? But it’s not. The court can’t order spousal support. Custody of children is very complex, because for a non-biological parent to receive custody or visitation, another action must be filed (although in fairness, it may be joined to the dissolution of domestic partnership action). Basically, in the absence of a clear statute, the family law court exercises its equity powers — basically, whatever the court thinks is fair on that day. This means results can vary even more widely than they can with the assistance of statutes.

What OFFA does for same-sex couples is give the court all of the well-developed tools the legislature has enacted over the years for the dissolution of marriage cases, as well as providing more options for determining custody of children in a partnership dissolution. (If you want to know just how busy the legislature has been in developing and honing those family laws, take a gander at ORS 107 and ORS 109!)

We hope domestic partnerships thrive. However, if you have registered a partnership and wish to dissolve it, think carefully about your next steps and consult with an attorney well versed in dissolution of marriage procedures. Due to the sensitivity of the subject matter, don’t be shy about asking your attorney what he or she thinks of your lifestyle. It does matter. It’s important that there be an open and trusting atmosphere in your dealings with your dissolution attorney.

*Although states are supposed to give each other’s laws “full faith and credit” under the US Constitution – and this includes honoring marriages – states do not have to do so when another state’s laws violate public policy in that state. This was, generally, the way the law was practiced before the enaction of the so-called “Defense of Marriage Act” (or DOMA) in 1996, but it’s now the law of the land. So, for example, if a couple marries at the age of 14, and that is legal in the state in which they reside, but is illegal in another state, the question of the marriage’s validity in the second state is up for grabs, depending on the policy implication of 14 year olds marrying. If thinking about this makes your head hurt, you’re not alone: the topic of marriages alone took up weeks in my Conflicts of Law class.

Top 10 list: Top 10 questions to ask a divorce lawyer in the first consultation. February 10, 2008

Posted by csstephens in Child Custody, Child Support, Dissolution, Out of State, Property Division, settlement, Spousal Support, Top 10 List.
3 comments

first meeting with lawyer If you are contemplating divorce, you should consult with an experienced family law attorney. Once you set up a consultation, be prepared for the first meeting, and have a list of questions to ask the lawyer. The following questions should help you understand the divorce process, how your lawyer’s office operates, and if the lawyer is a good fit for you and your case.

  1. How experienced are you in family law? All lawyers have law degrees, but many lawyers practice in several fields other than family law. You don’t want a generalist. Family law is a specialized field, and you will likely be better served by a lawyer who focuses on family law. Make sure that most of their cases are family law cases. Ask the lawyer if they have handled cases like yours before.
  2. What steps are involved in the divorce process? Your lawyer is there to educate you and guide you through the process. Have the lawyer clearly explain the process to you, from filing the petition, negotiating temporary orders, and the trial process.
  3. How will you charge me? If you hire the lawyer, you should expect to sign a retainer agreement that covers how you will be charged. Ask about the hourly rate, and how often you will be billed. Ask if you will be charged for time spent with paralegals and other staff in the office, and at what rate. Ask what will happen if you cannot pay your bill in full every month. Ask if you can pay by credit card, and if payment plans are available.
  4. How will we communicate? Ask your lawyer if they prefer phone contact over email, and how long you should expect to wait for a return call. Is your lawyer tech savvy enough to email you draft documents as PDF files? Is your lawyer’s office set up to scan and email incoming and outgoing correspondence? Do you automatically get a copy? The last three are essential if you live out of state, or a distance from your lawyer’s office. Lawyers ta
  5. How long will the process take? Ask your lawyer about what is their estimate for how long the case will take depending on if you settle quickly, settle after protracted negotiations, or have a trial.
  6. Can you estimate the cost of my divorce? This is an important question, but a very difficult one to answer. Don’t worry if your lawyer is hesitant to answer. The cost of a divorce depends on what you ask the lawyer to do, the level of conflict between you and your spouse, and the reasonableness of your spouse and their lawyer. Many of the cost factors are outside your control.
  7. What kind of resources do you make available to clients to make the divorce process less difficult and painful? Divorce is a difficult time, and good lawyers provide information and resources to help deal with the human side of the impact. Does your lawyer provide information about the process for self education? Are they patient with you? Do they offer referrals to other professional services if you request them? Our firm provides information through this blog, and educational articles on our website. We also maintain a list of recommended reading materials, and a list of qualified counselors and therapists for those who ask.
  8. Do you recommend mediation? Ask your lawyer if your case is appropriate for mediation. Ask about private mediation, and about how often the lawyer uses private mediation with clients. Good lawyers try to settle their cases once they have analyzed the case. A lawyer that does not use private mediation or other alternative dispute resolution tools may be doing you a disservice.
  9. What fees and costs can I expect other than charges for your time? Your local county (Multnomah, Washington, Clackamas, etc.) will charge a filing fee to open a case. You will likely have to pay a process server to server your spouse with divorce papers. Your case may require experts, such as appraisers, actuaries, accountants, social workers, or psychologists. Ask your lawyer what costs to expect, what experts may be needed, and how you will be charged for these additional services.
  10. How would you predict a judge would rule on the issues in my case? While no lawyer can guarantee specific results, listen closely to the analysis behind the lawyer’s answer. Understanding the facts that would make a favorable ruling more likely will help with strategy during the case.

News: How not to pay child support November 21, 2007

Posted by shelleycm in Child Support, News, Out of State.
1 comment so far

The Oregonian reports that a Washington man has been accused of running an Internet prostitution ring in order to make payments on his child support — for his eight children (by seven women). The man allegedly advertised on Craigslist.

While it’s good to see that he was taking his child support obligation seriously, we here at the Oregon Divorce Blog urge anyone struggling to make child support payments to avoid committing felonies to support your kids. Instead, contact an attorney to request a modification of the amount owed each month. It’s a much better bargain in the long run — plus, no jail time!

Baby you can drive my car, or: how would an Oregon family law court handle the McCartney-Mills split? November 5, 2007

Posted by shelleycm in Child Support, News, Property Division, Spousal Support.
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The Paul McCartney/Heather Mills divorce action is all over the tabloids (and some of us at the Oregon Divorce Blog just love our celebrity gossip). It’s no wonder, though – Sir Paul’s fortune is in the hundreds of millions, and his soon-to-be-ex-wife is, under British law, entitled to a large chunk of that fortune.

While perusing the newest gossip, we found ourselves wondering that if this case had arisen in Oregon, however — and if either Sir Paul or Heather had resided in Oregon for the six months prior to filing the action, it could have — how would one of our courts have handled the case? Just take a look… (more…)

New Resource for Divorcing Women October 15, 2007

Posted by shelleycm in Child Custody, Child Support, Dissolution.
2 comments

Check out the Modern Woman’s Divorce Guide for wonderful interviews with attorneys, articles, and resources!

The perfect client May 25, 2007

Posted by csstephens in Child Custody, Child Support, Dissolution.
6 comments

What a lawyer thinks of as a “perfect client” in the domestic relations sense is a client who helps the process of the dissolution, custody, or support matter along. We know how hard this process is to be going through, but it can be a much more difficult process the longer it drags on — and a much more expensive one for you. (Although we like getting paid as much as anyone else, we believe we should be problem-solvers, not problem-creators.)

Good attorneys will always treat their clients — all of their clients — with the same professionalism and respect they treat any other client. However, by helping us help you, you can make the process smoother, lower your costs, and get a better result! Here are some things you can do to help your attorney in your domestic relations case, to make things run more smoothly.

  • Tell us everything — the good, the bad, the ugly. We want to know the nastiest things the other side might throw at us, true or not. If you have hidden sources of income, a stake in Anna Nicole Smith’s love nest in the Bahamas, or a rare coin collection, we need to know and plan accordingly.
  • Provide us with your tax, banking, investment, insurance, titles to cars and whatnot, and any other requested information quickly in the process (if you can bring this stuff to your first meeting, we might very well cry with joy). If you’re not in a place where you can get the information, sign a release that allows the attorney to request the information on your behalf.
  • Keep in contact with us. We’ll provide you with frequent updates, but there are times when we need to get in contact with you quickly, too.
  • Similarly, let us know the best way to contact you. If you’re one of those people who hates checking her voicemail but lives on her computer (wait, that would be me when I’m at home), let us know your email address and if that’s a better way to stay in touch.
  • Understand that a contested divorce may take a while, even if it ultimately settles. We want closure for you as soon as we can get it, too, but not at the expense of a good settlement for you.
  • If your case involves child custody, parenting time, or support, sign up and follow through with the mandatory education classes as soon as you can.
  • Remember that your attorney is there to give you expert advice and recommendations, but isn’t going to be able to make the final decision about whether or not you should take a settlement. He can and will tell you if it’s a good idea or a bad idea, and what the benefits and pitfalls of an offer might entail, but the ultimate decision is going to be yours.
  • Also, if you don’t like the way negotiations may be headed, if you change your mind about the way the case is going, or if you’re just generally unhappy about something, please say so. We’d much rather know about it (and fix it) than to find out much, much later that you’d been unhappy for a very long time.

Advice aside, we know that this may be the, or one of the most difficult times of your life. We treat all of our clients as we would hope to be treated under the same circumstances: with diligence to their case, courtesy, the utmost respect, and the highest level of customer service possible.

Filing costs for dissolution, custody, and other family law matters May 21, 2007

Posted by shelleycm in Adoption, Child Custody, Child Support, Dissolution, Modification.
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Everyone wants to know how much their family law matter is going to cost. Your legal fees — well, that’s a matter between you and your attorney. Do you need a custody evaluation ? That requires a professional, and will cost between $500-3000. If your case is complex, you might need experts to testify.

But here’s some good news: your filing fees can be easily quantified, because they’re set by the circuit courts each year.

The circuit you file in depends on where you (if you’re the party who is filing) reside in. So, for example, if you’re in Washington County, you or your lawyer will hoof it out to Hillsboro to file your paperwork, even if you’re way out in King City. Barring unusual circumstances, your case will stay in that circuit until it’s resolved.

Here are some of the common filing fees in the Portland Metro Area for 2007.

Clackamas County Circuit Court:

adoption (petition): $100
adoption (objecting party): $78
annulment (petition): $320
annulment (response): $215
child custody or support (petition): $320
child custody or support (response): $215
child custody or support (motion to modify): $45
child custody or support (response to motion): $35
dissolution of marriage (petition): $371
dissolution of marriage (response): $215
dissolution of marriage (motion to modify): $105
dissolution of marriage (response to motion): $70
family abuse prevention act (all): $0
filing/docketing foreign child custody determination: $39
paternity/filiation (petition): $320
paternity/filiation (response): $215

Multnomah County Circuit Court

adoption (petition): $100
adoption (objecting party): $78
annulment (petition): $370
annulment (response): $206
child custody or support (petition): $370
child custody or support (response): $206
child custody or support (motion to modify): $200
child custody or support (response to motion): $100
dissolution of marriage (petition): $371
dissolution of marriage (response): $206
dissolution of marriage (motion to modify): $250
dissolution of marriage (response to motion): $135
family abuse prevention act (all): $0
filing/docketing foreign child custody determination: $39
paternity/filiation (petition): $370
paternity/filiation (response): $206

Washington County Circuit Court

adoption (petition): $100
adoption (objecting party): $78
annulment (petition): $320
annulment (response): $215
child custody or support (petition): $320
child custody or support (response): $215
child custody or support (motion to modify): $55
child custody or support (response to motion): $55
dissolution of marriage (petition): $321
dissolution of marriage (response): $215
dissolution of marriage (motion to modify): $105
dissolution of marriage (response to motion): $90
family abuse prevention act (all): $0
filing/docketing foreign child custody determination: $39
paternity/filiation (petition): $320
paternity/filiation (response): $215

How is Child Support Calculated? May 15, 2007

Posted by shelleycm in Child Support.
1 comment so far

One of the first things a prospective client in a case involving child custody wants to know is “how much child support will I get?”

(The real answer is “what the judge orders,” but clients understandably aren’t fond of that sort of answer. I wouldn’t be, either.)

Here’s the long version: child support in Oregon is based on child support guidelines promulgated in the Oregon Administrative Rules. Whenever a case is filed involving child custody and support, calculations must be made according to the guidelines and submitted with the petition. (There’s a web worksheet you can fill out to get an idea of how it all works.)

The calculations take a number of factors into consideration: the number of overnight visits the child spends with each parent, the gross income of each parent (although even an unemployed parent’s income will be presumed to be what someone would make working 40 hours/week at minimum wage), whether a party is paying or receiving spousal support, if either party has non-joint children, what child care costs are, or the child’s medical costs, or the child’s insurance costs. The calculations can be very complex (which is why every family law attorney in the state has the Division of Child Support’s Child Support Calculator bookmarked in their web browsers).

Based on these numbers, you’ll get a “presumptive” amount of child support. This isn’t the end of the calculation, though, because there are a number of rebuttal factors listed in the Oregon Administrative Rules that could apply in your case. For example, a rebuttal factor could be if either parent has resources that aren’t reflected in his or her gross income, or if either parent has special circumstances (both good or bad) that could affect the outcome. Sometimes parents have excessive financial obligations that can inhibit their ability to pay, or there are serious tax considerations the court should take into account.

The judge will take all of the evidence — the rough calculations based on gross income and overnight stays, plus all of the rebuttal factors — into consideration when he or she rules in your case. So, while the real answer still remains “what the judge decides,” it’s possible to get a good idea of what child support will look like based on the numbers in the worksheet.

New Case Law: Honesty is the best policy May 4, 2007

Posted by csstephens in Child Support, Dissolution, Legal Developments, Spousal Support.
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In Oregon, when going through any sort of support proceeding (child or spousal), the parties are required to complete what’s known as the USA, short for Uniform Support Affidavit. Completing this can be about as much fun as doing your taxes (maybe even more, because finishing it involves itemizing out all of your monthly expenses, as well as your income and liabilities), but it’s necessary for the court to know the financial situation of the parties to make a fair ruling.

This week, the Oregon Court of Appeals sent a warning to parties who might be tempted to fudge numbers on a USA. In Sugar and Sugar, 212 Or App ____, ____ P3d ___ (2007), the court upheld a trial court who penalized a woman who underreported her income on a USA she filed during an initial dissolution of marriage proceeding. Partially as a result of those numbers, the trial court ordered her husband to pay spousal support. Eight months later, her husband filed to terminate the support.

In Oregon, a spousal support order can be modified, but only where the court finds there has been a “significant, unanticipated change in circumstances.” Basically, this means something big changed, and it wasn’t something the parties foresaw at the time of the initial action.

In this case, the wife’s circumstances didn’t necessarily reflect significant changes that couldn’t have been foreseen at the time of the dissolution. Although she underreported her income in the first proceeding, in the modification proceeding she filed a new, more accurate USA. The husband argued that her increased income and better financial situation reflected a substantial, unanticipated change, and that his support order should be terminated. The wife argued that nothing much had changed, and that the trial court should have figured out her accurate level of income because she attached a paystub to her USA.

The trial court ruled that the wife was not allowed to represent her income hadn’t changed because she’d previously represented her income at a lower level (she was precluded from making this argument because of a doctrine called “judicial estoppel”), and the court ultimately ruled the wife’s support should be terminated completely. In Sugar, the Court of Appeals agreed.

For litigants in Oregon, what does that mean? Be completely forthcoming and don’t be too sharp — it can and will be used against you later!

Do I need a lawyer for my divorce? May 1, 2007

Posted by csstephens in Child Custody, Child Support, Dissolution.
2 comments

I’m asked all the time: “Do I need a lawyer for my divorce case?” There’s no simple answer to this question.

Oregon doesn’t have a law that forces you to hire a lawyer in a divorce case. You can get divorced even though neither of you hires an attorney. While a judge might tell you in a contested case (where your spouse officially responds to your petition with a pleading of his or her own) to get a lawyer, the court won’t stop you from proceeding if you decide to represent yourself.

There are some types of cases where it’s probably OK to go it alone… (more…)