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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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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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 Rights of Unwed Fathers in Minnesota

Paternity-2You may wonder what happens if you are an unwed father to a newborn. Being a father means, naturally, taking on responsibility for your child, and making sure that you do what’s best for him or her. But what rights do you have as a father if you are not married to the mother of the child?

PATERNITY

The term “paternity” refers to the “legal” father of a child under Minnesota law. Once paternity is established, a father has the responsibility to support their child financially. He may also seek a court order concerning parenting time and custody.

Of course, every child will have a biological mother and biological father. But, a child may not have a “legal” father. Under Minnesota law, if a newborn’s mother and father are not married to each other when the child is born, the father will not be considered the “legal” father until the necessary steps are taken.

An unwed father will have no legal rights to the child until he becomes the “legal” father. Even if the father’s name is on the newborn’s birth certificate, that is insufficient to declare him as the “legal” father.

HOW DOES AN UNWED FATHER BECOME THE “LEGAL” FATHER OF THE CHILD?

A man (not married to the child’s mother) can become the “legal” father a child either through a signed “Recognition of Parentage” (ROP), or by court order.

Establishing paternity is the first step to gaining rights to access and decide issues surrounding health care, school issues, adoption, benefits, parenting time, financial support, and many other needs and issues surrounding a child.

HUSBAND’S NON-PATERNITY STATEMENT

In a case where the mother is married to a man who is not the biological father, a ROP form will not be enough to establish the biological father as the “legal” father. The husband of the mother must also sign a form known as the “Husband’s Non-Paternity Statement” within one year of the birth of the child.

Once these two forms are completed, it will finally establish a “legal” relationship between the biological father and child.

ROP DOES NOT GRANT CUSTODY OR PARENTING TIME

Once a ROP is signed, a father becomes responsible to support the child. However, under Minnesota law the mother of the child will have sole physical and legal custody. The ROP does not give any custody or parenting time to the father. In order to gain custody or parenting time, an action must be filed in family court.

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What are the Differences Between Judges, Family Law Referees and Child Support Magistrates?

gavjuIn Minnesota, family law matters are typically handled either by a family court judge, referee, or child support magistrate.  There are minor variations in the legal authority and responsibilities of each such official, and there is also some variation in the types of cases that they preside over. 

Most family court hearings in Minnesota are presided over by judges. A family court referee may get involved, but only in certain counties that allow referees to preside over proceedings – for instance Hennepin County or Ramsey County. Because of the volume of cases these counties experience, a family court referee may be hired at the discretion of the county itself. The referee is not appointed by the governor.

There is no major difference between a family court referee and a judge, and a family court referee has, more or less, the same kind of legal authority that a judge has.  Yet, when the family court referee signs an order, it must also be approved by a judge.  There is no need to appear at a separate hearing before the judge for approval of the referee’s order.

Child support magistrates, as the term suggests, are only involved in those cases where the issue revolves around child support and enforcement of child support payments. In the State of Minnesota, all counties have child support magistrates.

If you have a question about your rights in a divorce or family law case, call (763) 323-6555. Our attorneys will speak with you free of charge, and provide you with the best information possible.

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Contempt in Minnesota: Consequences of Ignoring Court Orders

The court is responsible for controlling the conduct that occurs within its doors, but also has to deal with issues outside of the courtroom when it comes to family matters.

It is typical for a contempt motion to be made in a family law case when one party has violated an order of the court, such as an order to pay child support, spousal maintenance, or a parenting time arrangement.

The contempt rules are rather strict, in an effort to motivate individuals to comply with court orders. A particular action (or inaction) may constitute contempt if the following criteria are met:

  • The court must have jurisdiction over the case in order to file a motion; and
  • It must be properly alleged by the non-offending party that offending party has violated the directive of the judge.

When a contempt motion is filed against a litigant, that person must show up to a hearing and prove that they did comply with the court order, or have an adequate explanation as to why they violated it. An “Order to Show Cause” mandates such an appearance.

If the individual is found in contempt of court, a conditional penalty may be handed down by the judge. Sanctions can include fines, fees, transfer of property, jail time, or any penalty that the court deems appropriate.

Our Minneapolis divorce lawyers routinely represent clients in contempt cases – either pursuing contempt, or defending against a contempt claim. We invite you to contact us at (612) 767-4404 to discuss your situation free of charge.

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The Parties, The Lawyers, The Judge And Uncle Sam: The Key Players In Most Divorces

Many divorces involve alimony, child support and the division of assets – all of which involve taxation issues. Litigants tend to overlook the impact that these provisions will have on their taxes. As lawyers, however, we consistently take the tax consequences into account in determining what is fair and equitable under the circumstances.

Alimony payments are considered income for the person to whom the payments are made, and are deductible to the person who’s making the payments. If the parties are in different tax brackets, the government may wind up subsidizing part of the alimony payment.

In contrast to alimony, child support payments are not considered as income to the person receiving the payments, nor are payments deductible to the person making the payment. As a result, child support payments do not have any tax consequences at all. Important, however, if alimony is also an issue, to run the child support numbers and compare available cash – as opposed to gross income – in determining need versus ability to pay.

The sale of the marital homestead does not typically involve a taxable event. Capital gains up to $500,000 from the sale of the homestead will be not subject to taxation, if you have lived there for two of the last five years.

If you choose to transfer title to the residence, allowing your spouse to retain the equity, no taxable event occurs. Many clients will opt to use the home equity as an offset against alimony payments, avoiding tax issues altogether.

However, if you want to adjust the property division in a way that allows both partners to retain equal equity in assets, there may be sizable tax consequence to consider. For example, if one spouse retains the marital homestead and offers the other a retirement account in exchange for his/her share of equity in the house, the resulting settlement may not be fair to the one who takes the retirement account. That’s because if this spouse wants to access his retirement account funds, they cannot do so without incurring a tax liability. As a result, when you factor in the tax liability, the person who received the retirement account could actually end up with a lower settlement.

Simply put, a dollar of equity in a home is worth a dollar on the street. A dollar in a 401(k) plan is worth, perhaps, 70 cents on the street. For that reason, we always consider the net value of a particular asset in creating an equal property settlement.

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What Is An FENE…And Why Do They Work?

More and more Minnesota counties are providing divorce litigants with an opportunity to resolve their financial issues through a process known as “Financial Early Neutral Evaluation.” Settlement success rates in the FENE model are astonishing – as high as 75% in some jurisdictions.

An FENE involves a half-day session (or two, or three, or four) with a court-appointed neutral. This neutral typically is an experienced family law attorney, or a CPA familiar with the financial issues involved in a divorce. The parties, and their lawyers, sit down with the evaluator very early in the case – in an effort to catch people before they become too embroiled in conflict, or stuck in their position.

The process begins with the exchange of information, to ensure that there has been a full and fair disclosure of all income, assets and liabilities. A balance sheet is often created, which defines the universe of assets and debts, attributes value, provides a basis for the value, carves out any non-marital claims, and then allocates the relevant item to one of the parties. Once all allocated assets and debts are added up for each litigant, the cumulative value for each should be equal. This is typically the least controversial portion of the FENE, but can take some time.

The more controversial portion of the FENE involves the issue of spousal maintenance. With the assistance of the evaluator, the income and budgets of the parties will be scrutinized. A range of possible outcomes may be discussed, and recommendations may be made by the evaluator concerning the amount, and duration, of alimony in the event that the judge is left to decide the issue. Settlement discussions begin with that opinion as a backdrop.

Why does FENE work so often? A few points:

  • The parties have direct conversation with one another, and the evaluator, in a natural way. A far cry from the robotic “question and answer” method of introducing evidence during a trial.
  • The rules of evidence go out the window at an FENE. Any issue is up for discussion, empowering participants to voice their real-life concerns.
  • Emotions may be taken into account at an FENE. Issues concerning “fairness” and “hurt” may be addressed as part of the process. Frankly, the law of “no-fault divorce” precludes alot of this in the courtroom.
  • The process can be therapeutic. People feel like they can speak their mind, and they are listened to. Sometimes all a party needs is to be heard by someone.
  • Spouses have to look each in the eye as they discuss the issues. Very different from sitting 25 feet apart in the courtroom, facing front.
  • There is a real sense that the parties can “get it done” during the process. Litigants believe that closure has real value, and may be worth a compromise.
  • The process is a respectful one. Most evaluators know how to keep tempers from flaring.
  • The evaluators, not the lawyers, control the agenda. Both parties feel they are on a level playing field.
  • Opinions matter. Litigants afford substantial weight to the perspective of the evaluators. They know the evaluator has no stake in the outcome, and the experience to back up their opinions.
  • The neutrals are forced to “show their work.” What I mean is that the parties are literally walked through each of the elements of the case, together, and hear the same thing at the same time. They see how the opinions of the evaluator are created right before their eyes, giving them more credibility.
  • The surroundings are comfortable. There are no robes, no gavels, no court reporters, and no security. Just people sitting around a table, with their favorite beverage, talking.

As time goes on, we suspect the FENE process will gain statewide acceptance. Most of the counties in the Twin Cities metro area have adopted such a program. Why wouldn’t they? With a 3/4 reduction in divorce litigation, everybody wins….except those lawyers whose practice model is based on “dog fight” mentality. But, who’s feeling sorry for them anyway?

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