Common Minnesota Child Support Questions

chxOf the issues involved in a divorce in Minnesota, child support is generally recognized as the simplest to resolve. That does not mean, however, that the determination of basic support, medical support and daycare support is necessarily easy in every case.

Here are some of the more common questions our child support lawyers are asked concerning child support in Minnesota:

Who Must Pay Child Support?

Parents of minor children have a duty to provide for their financial support. Marital status does not matter. In other words, the same standards apply in a paternity case (involving unmarried individuals) and a traditional marital dissolution action.

Who Is A Child?

Pursuant to the Minnesota child support statutes, a child is defined as an individual under 18 years of age, or 20 years of age who is either: (1) still in high school; or (2) incapable of self support because of physical or mental impairment.

Can I Be Ordered To Pay Support For An Adult Child?

If a child has emancipated, or reaches the age of majority (18) , the Court loses jurisdiction over the issue of child support – again, unless one of the exceptions noted above is triggered.

What Is Basic Child Support?

Basic child support is the more traditional form of child support – a cash payment made from one parent to the other for the needs of the minor child (such as food, housing, clothing, education, and transportation).

What Is Medical Support?

Under Minnesota law, parents are obligated to divide, in proportion to their income, the cost for medical and dental insurance premiums for a child. They are also required to divide uninsured medical and dental expenses in proportion to their income (known as the PICS).

What Is Childcare Support?

Pursuant to Minnesota’s child support statutes, parents will be ordered to divide, pursuant to the PICS, the work-related childcare costs associated with minor children.

Can Parents Waive Child Support?

Because the Court considers child support to be “the child’s money,” it will not permit an outright waiver of child support. Instead, a “reservation” of support may take place. A reservation simply allows the parties to have no order on the issue in the moment, but return to Court later to address it, if they choose to do so.

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Minnesota Divorce Basics: Invading Non-Marital Property

propertydivIn terms of dividing the assets and liabilities of the parties following divorce, the first step in the analysis involves determining which assets are “marital” and which assets are “non-marital.”

Simply stated, marital assets are those acquired during the marriage, through marital efforts. Non-marital assets are those that one spouse: (1) brings into the marriage; (2) inherits during the marriage; (3) receives as a gift during the marriage; or (4) acquires through the sale of other non-marital property.

The general rule is that non-marital assets are awarded, in their entirety, to the spouse who demonstrates that their property interest is, indeed, non-marital. There are, however, exceptions.

In some situations, the Court may determine that it is appropriate to divide a non-marital asset. Pursuant to Minn. Stat. Sec. 518.58, Subd. 2:

If the court finds that either spouse’s resources or property, including the spouse’s portion of the marital property … are so inadequate as to work an unfair hardship, considering all relevant circumstances, the court may, in addition to the marital property, apportion up to one-half of the property otherwise [non-marital] to prevent the unfair hardship. If the court apportions property other than marital property, it shall make findings in support of the apportionment. The findings shall be based on all relevant factors including the length of the marriage, any prior marriage of a party, the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities, needs, and opportunity for future acquisition of capital assets and income of each party.

The practical reality is that the Court will rarely invade non-marital property. There are two common situation in which the Court will do so: (1) if one spouse will be left insolvent; or (2) if non-marital interests represent the entire estate of the parties.

If the estate of the parties contains some marital and some non-marital interests, the Court may unequally allocate marital property in lieu of a division of non-marital interests.

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Key Concepts In Dividing Property During Divorce In Minnesota

homAt the end of the day, the vast majority of divorces in Minnesota result in an equal division of the marital estate (those assets and liabilities incurred, or accrued, during the marriage.

“Equal division,” however, is not the relevant standard. Pursuant to Minn. Stat. Sec. 518.58, the Court must make a “just and equitable division of the marital property of the parties.” What constitutes a “just and equitable” allocation? Well, usually equal – but not always.

In Minnesota, the family law judge has the ability to consider a number of statutory factors in dividing property unequally, including:

  • The length of the parties’ marriage;
  • Whether either party has been married before;
  • The age, health, occupation and sources of income of each party;
  • The vocational skills of each party;
  • The employability of each party;
  • The income of each party; and
  • The nature of the marital estate (both assets and debts).

Does this happen very often? No – except for cases involving a dissipation of assets.

“Dissipation” is described by statute as “without the consent of the other party…in contemplation of divorce, separation or annulment…” transferring, encumbering (creating debt against), concealing or disposing of marital assets, except in the usual course of business or for necessities of life.

Here are a few examples of dissipation:

  • Selling a motorcycle to a family member for $1.00, knowing it will be bought back for $1.00 following divorce;
  • Placing large amounts of debt relative to an extra-marital affair (hotel rooms, restaurants, airline tickets) on a credit card;
  • Incurring significant gambling losses;
  • Destruction of items of personal property (electronics, furniture or clothing);
  • Investment losses relating to an obvious scam; or
  • Spending large quantities of money on drugs or alcohol.

Should dissipation occur, the Court will likely allocate assets in such a way that the non-offending spouse is put back in the position they would have been, but for the dissipation – usually by allocating other assets to them. The party claiming dissipation bears the burden of proving that it occurred.

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Hennepin County Divorce Resources

henAbout one-half of the divorce and family law cases our lawyers handle are venued in Hennepin County. Located in downtown Minneapolis, the Hennepin County Family Justice Center provides a central hub for all sorts of resources for litigants doing through a divorce, custody dispute, or domestic abuse proceeding. The nice thing about Hennepin County is that there are a number of terrific resources available outside the four walls of the courthouse as well.

Here’s our “best of” list of helpful Hennepin County divorce and family law links:

If you have an idea for an additional link, I invite you contact our office with the relevant information.

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Methods Utilized By Real Estate Appraisers During Divorce

propertyIn the vast majority of the divorce cases we handle, the parties own real property. Sometimes that property is a primary residence, while other times the property takes the form of a lake cabin, vacation home, investment property or business property.

Generally speaking, the equity resting in each piece of real estate is subject to equal division among the parties. It is, therefore, appropriate to determine how the parties will realize their equity. Will they sell the property and split the proceeds? Do they agree on the value of the property? Or, is an appraisal of the real estate necessary because one party wishes to keep the property and “buy the other side out.”

When an appraisal becomes necessary, there are a number of approaches utilized by the professional hired to value the property. They are characterized as the:

  • Cost Approach;
  • Market Approach;
  • Income Approach;
  • Investment Value Approach; and
  • Development Cost Approach

The cost approach involves a determination of what it would cost to rebuild the same property from scratch. This includes not only the structure itself, but also the improvements to land that would be necessary to complete the sale and take ownership. This approach is typically reserved for relatively new construction.

The market approach involves a comparison of similar properties that have recently been sold. Comparable sales offer a measuring stick based on recent economic activity. So as sufficient data is available, the market approach is most often relied upon in determining the value of a traditional home.

The income approach involves market value being determined as a multiple of profits derived from the use of the property. What would a willing investor pay to receive a return of “x?” Naturally, the more earned from the property, the higher the value of the property itself. This approach is often used to value investments, such as apartment buildings, commercial office buildings and shopping centers.

The investment value approach (rather uncommon) applies to property with sophisticated metrics for measuring the benefits, both short and long-term, associated with a piece of real estate. The more highly unique a piece of property, the more likely the investment value approach will be utilized.

Finally, the development cost approach may be utilized in a situation in which the parties own raw, undeveloped land. Questions involving future use and development potential, and then profits that may arise therefrom, are taken into account.

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Minnesota Child Support & Alimony: How Will The Court Measure Income?

taxThe question most commonly asked of our divorce (and sometimes custody and paternity) clients involves how much support (either alimony or child support) they may receive, or pay, as part of their case.

The the answer to that inquiry can be rather complex, but the starting point in either situation involves a determination of “income” for each side.

Often overlooked by the litigants, “income” includes more than straight wages; it also involves unearned income, retained earnings, self-employment income, gifts, imputed income, housing benefits, per diem payments, and perks received as the owner of a business, or highly compensated individual.

For individuals who are W-2 employees, the determination of income is relatively straightforward. More digging occurs, however, when an individual is self-employed.

We often think of litigants as landing in one of four broad categories of earners: (1) W-2 employees; (2) self-employed individuals who run a “legitimate” business; (3) self-employed individuals who run a business haphazardly – often working for cash under the table; and (4) individuals who are not earning any income at all.

For the W-2 employee, a simple review of payroll records usually answers all questions.

A “legit” business owner typically employs an accountant, manages cashflow accurately, and files taxes on time. An interview the accountant and review of the relevant profit and loss statements and tax returns will typically result in a solid income figure.

Individuals who are unemployed will have income “imputed” to them at 150% of the state or federal minimum wage, whichever is larger.

The most difficulty arises in trying to determine the income of a business owner who is hiding money – either from their spouse, or the IRS. We often rely on a “lifestyle” argument in that situation, by presenting the Court with the basic facts about how large his/her home is (we’ve argued with “broke” parents who live in a $900,000 home), and what kind of car they drive, clothes they wear and vacations they take.

In general, the relevant statutes define income as “any periodic payment to an individual.” These types of payment can include:

  • Wages;
  • Tips;
  • Commissions;
  • Bonuses;
  • Workers’ Compensation Benefits;
  • Unemployment Benefits;
  • Annuity Payments;
  • Pension Payments;
  • Spousal Maintenance from a Prior Order;
  • Child Support from a Prior Order;
  • Social Security Benefits; or
  • Veteran’s Benefits.

Our clients also regularly ask about overtime pay. The law generally disfavors the inclusion of overtime pay (or other moonlighting earnings), unless overtime is required for employment, and was regularly worked during the relationship of the parties.

For more answers concerning alimony and child support, check out our spousal maintenance podcast and child support podcast.

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Minnesota Child Support Guidelines: Emancipation Standards

maintenanceWe’re often asked about how long child support payments must be made. Pursuant to Minn. Stat. Sec. 518A.39, Subdvision 5, a “child support obligation in a specific amount per child terminates automatically and without any action by the obligor to reduce, modify, or terminate the order upon the emancipation of the child.”

The answer, accordingly, is “until a child emancipates.” But what, exactly, is “emancipation?”

The emancipation of a child occurs in a number of ways.

The most typical form of emancipation involves a child graduating from high school, or reaching 18 years of age, whichever is later. In other words, if your high school graduate doesn’t turn 18 until August of the year they graduate, support payments will continue beyond high school for a few months. Well over 99% of the child support cases involve this type of standard.

There are situations in which a child qualifies for support until age 20 – usually when a minor has a disability of some sort. Support payments, however, need not continue beyond age 20, regardless of the circumstances.

Further, a minor can emancipate by agreement of the parties. If the facts and circumstances justify, the Court may approve an agreement to terminate child support prior to age 18, or high school graduation. The critical issue in such a situation involves whether parents have relinquished control and authority over a child’s upbringing. You should know that it is extremely rare for a judge to terminate support payments – even if agreement on this issue has been reached.

Emancipation may also take place if a child moves from a parent’s residence, and assumes responsibility for themselves. The child, in that circumstance, gives up the right to financial support by a parent.

There is no formal court process for determining whether a child is emancipated under the law. The concept of emancipation applies in a number of situations, including juvenile court and family court.

In the family court area, the simplest way to seek a finding that a child has emancipated involves filing a motion with the Court. Once you have presented all of the relevant information to the judge, s/he will be in position to determine whether, in fact, your child is self-supporting.

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Minnesota Divorce Lawyers Rely on New Judicial Resource: Pendleton’s Blog

mosMinnesota divorce attorneys have an emerging resource to rely upon in preparing their cases, and it’s coming straight from the bench. Anoka County District Court Judge Alan Pendleton’s blog, entitled “Pendleton’s Judicial Training Updates,” has now captured national attention from legal commentator and author Robert Ambrogi – and for good reason.

Whether custody, child support, personal property disputes, the involvement of children in a court proceeding, or family law motions in general, Pendleton offers the analytical framework utilized by the bench, in a rather user-friendly format. The nice thing is that the issues he addresses tend to be those causing some confusion for lawyers.

For example, our attorneys routinely debate how, and whether, to involve a child within a particular case. Pendleton provides insight relative to a highly sensitive question.

In addition to family law proceedings, Pendleton’s blog provides insight concerning domestic abuse proceedings, appeals, contempt, and the rules of evidence. Most posts provide an easy-to-navigate summary of a particular legal issue. The information provided certainly doesn’t dive into the minutia but, rather, offers a starting point for analysis.

Moreover, Pendleton offers links to the most common resources relied upon by lawyers and judges, including the Minnesota Rules of Civil Procedure, the Minnesota Rules of Evidence, and the Minnesota Rules of Appellate Procedure. Attorneys should strongly consider bookmarking the blog for that reason alone. Frankly, new lawyers should read every post on his site.

Pendleton’s work is one of a small number of blogs authored by District Court Judges in Minnesota. Anyone can subscribe, either by e-mail or RSS feed. Cutting-edge stuff, and a trend this author hopes continues.

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The Latest Family Law ADR Trend: Moderated Settlement Conferences

mediation1Moderated settlement conferences have become a bit of a trend in Minnesota, creating an easier, and more affordable way to resolve a divorce. Many family court judges are encouraging litigants to engage in this form of alternative dispute resolution (ADR).

A moderated settlement conference usually occurs after the “pretrial” hearing, but before the couple has a formal trial. It is a last opportunity to allow the parties to make decisions regarding the remaining issues in their family court case. Even if the parties have attempted mediation or an early neutral evaluation, the relevant information in their case may not have been as well-developed at the time.

The types of cases that are usually perfect for a moderated settlement conferences are those that are relatively close to resolution. A conference may be needed, however, because some key issue remains in dispute, such as child custody or alimony.

A third party moderator is hired to manage the conference. They are typically an experienced family law attorney, or retired judge, tend to act the part of both a mediator and an evaluator. The scope of the moderator’s responsibilities is outlined by the parties, and their attorneys, based on the issues and the facts that are causing conflict.

Conferences are typically held at the courthouse, depending on the availability of the judge. If held at the courthouse, referees or judges will make themselves available to immediately approve agreements that have been reached by the parties, preventing the litigants from “undoing” things.

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The Law on Annulment v. Divorce in Minnesota

annulThe two ways to end a marriage, voluntarily, are annulment and divorce. An annulment is the legal procedure that treats a marriage as if it never existed. It is legally erased. A divorce, however, is the legal dissolution of the marriage. Both parties are returned to single status.

The avenue a couple can pursue depends on the circumstances surrounding the marriage. For instance, annulments are typically granted because the marriage was never valid in the first place. In Minnesota, litigants may seek an annulment if any of the following exist:

  • Coercion – This is also known as “forced consent” and it occurs when one spouse was forced into the marriage under duress;
  • Bigamy  – One party may have already been married to someone else;
  • Mental incapacity – One spouse was under the influence of drugs or alcohol at the time of the nuptials and was not able to provide informed consent;
  • Mental illness – One spouse was emotionally or mentally ill at the time of the marriage;
  • Familial relationship – If the couple was related, then the marriage is prohibited by law;
  • Fraud – One spouse aggress to the marriage based on misrepresentations made by the other;
  • Inability to consummate – Either spouse was not physically able to have sexual relations to consummate the marriage; or
  • Underage spouse – One spouse may have been too young to legally enter into the marriage without the consent of the court, or a parent.

Annulments typically conclude soon after marriage occurs, so there are typically no spousal maintenance or child custody issues involved – as in many divorce cases. Divorce can also involve the division of marital assets and debts, which makes the case more complicated, and longer to resolve

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