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.

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.

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.

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?

Harrison & Hannah: Two With An Interest In Taxation

Tax season is in full swing. Thanks to Jeanne Hannah, Michigan divorce lawyer, for her summary of the IRS tax resourcesthat may be of interest to current, and former, divorce litigants.

Hannah’s recent post provides links to the IRS forms and publications that address an individual’s filing status, exemptions, tax interceptions and claims for innocent spouse relief:

Of course, our favorite tax-related link – the Beatles “Taxman,” from their 1966 Revolver album. A breakthrough songwriting effort for George Harrison, with the guitar solo, ironically, played by Paul McCartney.

When And How Can A Spousal Maintenance Award Be Modified?

Once an award of spousal maintenance (alimony) is ordered by the court, it may be modified if certain criteria are met. In order to modify and award of alimony, the party seeking modification obtains a court date and serves and files motion papers. Keep in mind that the modification, if granted, is usually only retroactive to the date that the motion papers are served on the other side. For that reason, it is important to obtain legal assistance at the earliest possible time, rather than allowing arrears to build up, if you are unable to afford the maintenance obligation as ordered.

Any of the following provide a basis for the judge to modify an existing alimony order:

  • Substantially increased or decreased earnings of either party;
  • Substantially increased or decreased needs of either party;
  • Receipt of public assistance benefits;
  • Change in cost of living, as measured by the federal government; and
  • Significant medical expenses incurred on behalf of a child that are not otherwise addressed in the judgment and decree.

Additional factors for consideration include the initial standards the court addresses in awarding spousal maintenance:

  • Financial need of each party relative to their income;
  • The ability of one party to pay the other spousal support;
  • The length of marriage;
  • The mental and physical health of the parties;
  • The role each party played during the marriage, in terms of working or raising children;
  • Financial assets available to each party to supplement their income;
  • The educational background of each party; and
  • The age of each party.

While the issues involved in modifying spousal maintenance are usually addressed in motion papers alone (such as affidavits and exhibits), some judges will order an evidentiary hearing (trial) to determine whether the request for modification is appropriate.

Podcast: Spousal Maintenance: Factors Considered By The Court

The Family Law Show returns with an overview of spousal maintenance (alimony) awards under Minnesota law.

Alimony is an emotionally-charged issue, with significant financial implications for both parties. The spouse asked to pay rarely wants to, while the spouse asking for support usually needs it. What is the Court going to do?

Topics discussed in this podcast include the role fault plays in an alimony award, the factors the court will examine in determining how much alimony is appropriate, the factors the court will examine in determining how long alimony should be paid, and the tax implications of spousal maintenance payments.

Run Time: 13:18

 

Judge Stephen Halsey’s Minnesota Family Law Blog Highlights Alimony Award In Light Of Non-Marital Pension Benefit

In December of 2009, Minnesota Judge Stephen Halsey (chambered in Wright County) launched his Minnesota Family Law Issues Blog, a terrific resource for both lawyers and litigants. As I understand, Judge Halsey’s blog is the first of it’s kind in Minnesota (from the judiciary). His unique perspective provides an interesting addition to the exchange of family law information online – including podcasts.

Judge Halsey’s post entitled Post-Decree Modification of Maintenance: Pension as Income or Property caught my attention as I was reviewing the posts of others today. Judge Halsey writes:

A recent unpublished Court of Appeals decision, Hemp, 2010 WL 1657024, is worthy of review by family law practitioners and judges as it considers once again which portions of a maintenance obligor’s pension may be considered as income or property when a motion to modify maintenance is brought. The Court discusses Lee, 775 NW2d 631 (Minn.2009), which held “a district court may include in its calculation of an obligor’s ability to pay maintenance the portion of an obligor’s monthly pension payment exceeding the amount the obligor is entitled to receive each month as marital property.”

The Court of Appeals in Hemp approved the district court’s apportionment of the monthly pension benefit between what is marital property and what is not. The district court, however, erred in its interpretation of the valuation method used in the original dissolution decree.

I think one lesson to be learned is that counsel and the court should make detailed findings of fact in the original decree as to the valuation method agreed-upon by the parties or as ordered by the court so that such method is clear to the court hearing post-decree motions on maintenance.

In a good number of the cases we handle, the issue of spousal maintenance is front and center. From my perspective, the most important part in settling a maintenance claim involves agreeing to a specific timetable for payment. A client may pay a bit more than they like, but the fact that there is a cap on their future liability is usually worth it. The benefit to the recipient? These timetables usually accompany a non-modifiable (even if their ex’s income drops significantly) maintenance award.

How Does The Court Determine An Appropriate Amount Of Alimony?

Spousal maintenance, formerly known as alimony, is one of the more difficult issues to tackle during the dissolution process.  With the exception of child custody, no other issue is as personal or emotionally charged to divorce litigants.

It is quite difficult to predict exactly how much spousal maintenance the court will award a particular party.  The court will examine a host of factors, and each play a part in the decision-making process.  For that reason, alimony is decided on a case-by-case basis.

The court will examine the standard of living established during the marriage.  Based upon that standard, it will take into account the anticipated ongoing monthly expenses of each spouse. The question for the court involves whether these alleged expenses are reasonable under the circumstances.  The court will compare the expenses against the income of each litigant.  If a litigant faces a monthly shortfall, the party will have a need for spousal support. If a litigant faces a monthly windfall, they will have the ability to pay spousal maintenance.  These elements are measured against the length of the parties’ marriage, the age of the parties, the educational background of the parties and the mental and physical health of the parties.

Once all of the elements are considered, the court will determine whether an award is appropriate, how much the monthly award should be and the length of time paying party will be obligated to support their former spouse. The longer the marriage, the more likely a permanent award of spousal maintenance will be granted.  With shorter marriages, the court may consider an award of temporary spousal maintenance so that other party has an opportunity to reeducate themselves, reestablish their career path and become self-supporting.

“I’ll Quit My Job” Says My Spouse. Can They Get Out Of Paying Child Support Or Alimony To Me?

The court will “impute” income if your spouse is voluntarily underemployed. Rest assured, you have nothing to fear.

Let’s suppose your spouse is trained as a physician and decides, for the time being, to work as a waiter at a local restaurant. The court can take an individual’s education, work history, job opportunities in the local market and earnings associated with those jobs into account in calculating appropriate child or spousal support. Assuming your spouse is reasonably assured of obtaining a position as a doctor with a six-figure salary, a doctor’s salary will be attributed to them.

One of the more common discussions we have with new clients involves a spouse’s claim (with laughter) that they will quit their job and our client will receive nothing. “I’ll quit my job” they say. Wrong strategy. Your spouse is free to work in whatever capacity they wish. At the end of the day, however, the amount of support they pay is based on what they actually earn or have the potential to earn, whichever is greater.