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Monday, December 26, 2011

Add Ons to Child Support

So here you are, finalizing your divorce, and you notice that your spouse is not only asking for weekly payments for child support, but wants additional payments for other costs such as:  private school tuition, tutors, swim lessons, any and all associated medical costs of the children, and pretty much any cost that can be associated with your childen.  So you start thinking:  "Hey!  What happened to just paying regular child support checks?  What are all these other costs that I have to pay for?"  These, my friend, are called "Add Ons for Child Support."  

 

First of all, let's make sure we differentiate between "basic child support" and "add on support."  Basic child support is the percentage calculated according to New York State Domestic Relations Law for support based on a parent’s income.  However, "Add on support" is additional support for other costs such as:  health insurance and unreimbursed medical expenses, some educational costs, and daycare. 

To calculate what each parent has to pay for "add on" child support, each parent must look at each cost incurred and then apply what their pro rata share is for the expense.  For example, if each parent earns $50,000, each would pay 50% of the add on costs.  If one parent earns $20,000 and the other earns $80,000 they would pay 20% and 80%, respectively, of the add on costs.  These percentages are often included in a divorce stipulation or agreement, as they are additional costs beyond simply what a parent would have to pay under the law.  

Currently, parents can deviate from their pro rata shares of the add on child support, but their agreement or the court order must specify their reasons for the deviation.  The parties may also agree to include additional “add on” support categories, such as the cost of camps and extracurricular activities for their children. 

Domestic Relations Law §240 (1)(d) provides that the cost of the health care insurance premium must be paid by the parties in accordance with the pro rata shares.  Domestic Relations Law §240 (1-b)(c)(5) provides that reasonable health care expenses that are not covered by insurance, i.e., unreimbursed medical expenses, are allocated in the same proportion as each parent’s income is to the combined parental income.  In determining which parent should carry the insurance for the children, the Court normally investigates who is offered insurance by their employer, the comprehensiveness of the insurance offered, and the cost of such premiums.  In most cases, the children will remain covered under the better health care plan, although not in every situation.  

Domestic Relations Law §240 (1-b)(c)(4) and Domestic Relations Law §240 (1-b)(c)(6) provide that a "custodial parent who is working, is looking for work, or is in school or training which will lead to employment and incurs reasonable day care expenses, such expenses must be paid by the parties in accordance with the pro rata shares." 

For parties who agree that their children will attend private school, or whose children have been enrolled in private school prior to the commencement of a divorce action, they may be obligated to pay these educational expenses in accordance with their pro rata shares.  These often must be paid on a weekly or monthly basis, in addition to the child support payments that were ordered or agreed upon.  

 

Also keep in mind that "education" expenses will often times expand beyond just the direct costs of attending school.  As mentioned above, these include tutoring, activities, sports, or even a private driver if doing so is necessary for the safety of the children.  

The main thng to keep in mind through your divorce and when preparing your divorce agreement, is that if you allow "add ons" to be included in child support, your required payments might be much much higher than what you initially imagined.  

Lessons Learned From a Hard First Year of Solo Law Practice

I have a couple more months before I write one of these, but I'm already noticing a lot of similiarities to what I have found.  You can find the full article here:

Lessons Learned from a Hard First Year of Solo Practice

So perhaps I should just repeat some of the biggest realiziations I have had after 6 months of true full time solo practice:

First and foremost, I learned that I can do this! 

I learned not to waste money on marketing.

I learned not to waste money on other things, too. Like memberships to networking groups, ads in local home & leisure publications, and fancy extras like all the add-ons my phone company offered me or hiring a decorator to fix up my office. 

I learned where my leads actually come from. I get at least half of my clients from referral sources like other attorneys and existing clients. 

I learned how to get clients through my website. You want better SEO? Translation: do you want your website to stand out on Google? Learn some basic ins and outs of how the Internet works. Use a back-end to your website like Joomla or WordPress that automatically handles it for you.

I learned how much money I need to stay afloat. I wrapped my head around my own cash flow.

I learned that I can do it all myself, but that I don’t have to. I’m no longer a one-man band.

Finally, I learned to love my life, right now, just as it is. My life is not perfect, don’t get me wrong. It would be nice to be a little more profitable, but the firm is beginning to thrive. 

So I will certainly update this again along the way, but I think these points are great.  

You know, I recently spoke to a friend from law school about going into my own practice.  He certainly had some ambivilance and worry about how it work out and whether he could afford to do it.  I told him that I could not recommend more how easy and rewarding it is to run your own practice.  So here I am , the end of December 2011.  Back in the beginning of August, 2011, I didn't have a website, nor had I ever had more than 2 clients at a time.  Now, I have more than 25 currently retained clients in a multitude of practice areas, and every week I get more calls.  

And you know what?  Ultimately, I did it all on my own.  

Sunday, December 25, 2011

When Forensics Examiners Help Win Child Custody

When there is a disagreement over child custody, often times the family court judge or referee will order an outside forensics study be made. This is an depth examination of both parents, their jobs, living arrangements, and what may be the best interest of the child.

For a further read this article covers it pretty well :

Engaging Forensic Examiners to Strengthen Your Custody Case

It's important to remember though that forensics are supposed to be done on an independent basis, but often times who is selected and the report they give can have a huge impact on your child custody case.

Saturday, December 24, 2011

When Baby Boomers Get Divorced

From my personal experience of being a divorce attorney, I have noticed that perhaps more than 50% of my clients have been around the Baby Boomer age.  Meaning, a number of my clients are already retired, or close to retirement, and are involved in a divorce proceeding. 

Recently Abrams and Festerman posted an article discussing this new trend, which you can find here:

http://www.abramslaw.com/CM/Articles/Articles304.asp

Here are some highlights:

Now [baby boomers] are pioneering a new trend in matrimonial law - the "gray divorce," the phenomenon of couples divorcing after the age of 50.  
Several cultural changes have contributed to the baby boomers generating high rates of late-life divorce. In the past 20 years, gender roles have shifted significantly, and women have become increasingly less financially dependent on men. According to a recent survey by the American Association for Retired Persons (AARP), women over 50 now initiate two-thirds of divorce proceedings.  
Furthermore, boomers entering their retirement years are healthier than any previous generation and are projected to have longer life expectancies. As such, experts have observed a growing desire for fulfillment in the later years, as well as an inclination to leave a dispassionate marriage. Additionally, as the children of boomers enter adulthood, parents are less concerned about the impact of divorce on their offspring and are more likely to exit the marriage without worries about custody, child support and the effects of divorce on young children.
People who divorce later in life have had more time to accumulate assets and debts, which can be significant in a remarriage and subsequent divorce. Access to pensions, retirement account balances and Social Security benefits must be considered.  
Marriages and divorces later in life come with their fair share of financial ramifications. Later-in-life divorces can be problematic because individuals' future earning potentials are typically limited. When combined with the possibility of costly health problems, individuals may be unable to maintain the status quo of the lifestyle they enjoyed as married couples, and older couples may have a harder time adjusting their personal habits and money management styles.
New York is an equitable distribution state; accordingly, the marital assets and liabilities ("marital property") are divided in an equitable fashion, meaning that the marital property will be divided in such a way that fairly represents the parties' respective contributions to the marriage. In the context of negotiating a settlement agreement, it is important to consider all the assets that are subject to distribution. Parties may decide to trade off passive assets or negotiate percentages of various active assets, such as a business or professional practice, and courts typically look to indirect contributions - for example, from a homemaker spouse - in order to determine the proper percentages.  As for credit cards post-divorce, each party should remember to remove the former spouse from any credit card account held in his or her name to prevent the former spouse from incurring additional debt.
The amount of maintenance, if any, is generally determined by balancing the payor spouse's ability to pay with the payee spouse's reasonable needs. Additionally, it is imperative to secure any financial obligation. While life insurance may be cost prohibitive depending upon age and health, it is possible to secure payments through mortgages, confessions of judgment and other security devices. 
In today's troubled real estate market, the marital residence may not have retained its prior value and may remain unsold for a long period of time. Dividing the remaining equity (net proceeds) may not provide the husband or wife with enough financial wherewithal to obtain adequate separate housing.
Pensions and retirement plans are considered marital assets; typically, the amount that was earned during the marriage will be subject to equitable distribution pursuant to New York's Domestic Relations Law (DRL).   If the retirement plan is an ERISA qualified plan, such as a 401(k), 403(b) or other employer-sponsored plan, the law requires the non-participating spouse to be the primary beneficiary, unless otherwise waived in writing. It is important to obtain an accurate determination of the value of pension plans, IRAs and stock holdings, together with their concomitant tax ramifications. Taxes on retirement funds must be considered when determining the true value of those accounts.
Except as otherwise provided in DRL § 236, a husband and wife cannot contract to alter or dissolve the marriage or to relieve either of his or her liability to support the other in such a manner that he or she will become incapable of self-support and, therefore, likely to become a public charge.

So what's the lesson here?  As the article brings up several times, when couples are getting married later in life, an prenuptial agreement is more important than ever.  Couples should not feel that there is some stigma associated with signing a prenuptial agreement, especially when doing so can remove so many complications down the road.

Additionally, getting a divorce later in life, even when uncontested, still have many more assets and liabilities to work out than a divorce among a younger couple.  It is very important for both spouses to take a close look at their financial picture so that issues of distribution can be dealt with in the easiest way possible.

Thursday, December 15, 2011

Four Tips for Same Sex Couples in New York

The New York Divorce Report has come out with a good starting list of tips for same sex couples planning on getting married in New York, or those already legally married in New York :
Four Tips To Protect Same-Sex Married Couples in New York : New York Divorce Report : Daniel E. Clement: New Jersey & NY Lawyer & Attorney for Family Law & Pre-Nuptials
These tips include the following : 
1. Sign a Pre-Nuptial Agreement
- It the parties are already married, the parties could consider entering into a post-nuptial agreement.
2. Prepare a healthcare proxy for each family member.
A health care proxy enables a designee to obtain medical information to make medical decision on behalf of his/her loved ones.
3. The non-biological parent should adopt the children of the marriage
Should the non-biological parent (or in the case of adoptive children, the non-adoptive parent) be not deemed the “legal” parent of a child, the party could be denied parenting time, custody or visitation, with children of the relationship.
4. Develop an estate plan; draft a will.
As more and more same sex couples become legally married in New York, these tips will become much more vital for each couple to consider.

Wednesday, December 14, 2011

How to Know if You Need to File for Bankruptcy

Here's another great piece by the Tampa Bay Bankruptcy Blog about how to know if it's finally time to file for bankruptcy :

How to Know if You Need to File for Bankruptcy | Tampa Bankruptcy Blog

Some highlights of the article :

So if you are in any of these situations, it’s time to seriously consider filing for bankruptcy:

1. You have hired debt management companies to look into your finances and help you solve your debt problems but with little or no success. This might be for you as an individual or your business. Debt management companies will advise you on debt reducing and debt consolidation methods to ease your debt burden. But sometimes, the strategies do not work as well as you need them to.

2. Your creditors are hot on your heels and getting more persistent by the day. You are getting more notices in the mail, more phone calls, more text messages, more emails etc. And the trend is getting increasingly more disturbing to you and your family. You are not sure when any of your creditors may get mean and send debt collectors knocking on your door.

3. You are suffering mentally, emotionally and even physically. You cannot sleep well at nights, your peace is disrupted, you get headaches, and your health is impaired. You are constantly anxious and worried and your debt problems are constantly on your mind virtually 24-7.

More info is available through the link. It's a must read for anyone contemplating bankruptcy but perhaps too scared of the implications.

Saturday, December 10, 2011

Stop Getting Harassed by your Creditors

A lot of Bankruptcy clients come to me when things are down to the wire, and need the Bankruptcy filed yesterday.  Thankfully, even though the full Bankruptcy filing takes a while to prepare, we can stop all colleciton efforts while we finish your Bankruptcy petition.  Recently Skiba Law blog posted about this:

http://skibalaw.com/773/a-the-automatic-stay-of-bankruptcy/


The automatic stay is an Order issued by the ... Bankruptcy Court when you file your bankruptcy case.  It is issued automatically pursuant to the bankruptcy code, thus the “automatic” part, and it “stays” or stops all collection efforts against you and your stuff.
If your wages are being garnished, the automatic stay stops that.  Immediately.  If your house is set to be foreclosed down at the ... courthouse steps at noon today, and you file bankruptcy at 11:30, the automatic stay stops it.  If you are being sued, the automatic stay stops it.  And the one most people love – if your phone is ringing off the hook all day long – IT STOPS IT!
The automatic stay is one of the most powerful of all bankruptcy tools.  It gives you a chance to catch your breath, evaluate your position, and determine a plan forward.  It takes away much of the fear and stress of your current situation.  You will actually be able to answer your phone.  You won’t have to worry that the knock on the door is a process server dropping off the next law suit.  The automatic stay can literally help bring peace back into your life.

Wednesday, December 7, 2011

Judge prevents deportation based on gay marriage.

History as gay marriage prevents deport - m.NYPOST.com

This appears to be the first step towards the federal courts recognizing gay marriage as a basis to remain in the country.

Considering that DOMA had prevented recognition of gay marriage by the federal government, this is a very important first step federal recognition and allowing those in a same sex marriage to remain in the United States.