Tag Archive | "Child Support"

Father’s Child Support Arrearage Still Not Dischargeable after 20 Years

Family Law Case Review

Case: Derek H. Elwood v. Wendy A. Parker
by Mike Kohlhaas, Bingham Greenebaum Doll

HELD: Father’s child support arrearage of more than $150,000 was not dischargeable (or entitled to any relief at equity) even though Mother made no effort to enforce the support obligation for 20 years, which was approximately two years after the younger child’s emancipation.

FACTS AND PROCEDURAL HISTORY:  Mother and Father were married briefly in the 1990s, they had two children together, and then divorced in 1995. As part of the dissolution, Mother was awarded custody of the children and Father was ordered to pay child support of $169 per week. After making four months of support payments, Father stopped paying child support, moved away, disappeared, and never made another support payment.

Father had no relationship with the children during this period. Mother remarried and Mother’s new husband stepped into the de facto role of the two children’s father.  The children were not aware of Father’s existence until Mother told them as teenagers. Mother made no effort during this period to locate Father or to collect his growing child support arrearage.

In 2015, two years after the younger child’s emancipation and 20 years after the divorce, Mother located Father and filed to determine his support arrearage. After a hearing, Father was ordered to pay an arrearage of $157,555, plus interest of $20,434, plus Mother’s attorney’s fees of $2,800. Father appealed.

On appeal, Father advanced an argument that he was entitled to some type of relief given the amount of time that had passed, and that Mother had made no effort to enforce the arrearage in a more timely manner. Father also argued that Mother’s new husband stepping into a role of a father figure for the children, also warranted some relief on the arrearage.

The Court of Appeals underscored that a retroactive modification of a child support order – which is effectively what Father was requesting – is appropriate in only very limited circumstances, none of which applies here. The Court also noted that Father provided no authority, and the Court found none on its own, to support any argument that step-father assuming a father figure role for the children could have the effect of relieving Father of his child support obligations.

The trial court’s arrearage order was affirmed.

To view the text of this opinion in its entirety, click here: Derek H. Elwood v. Wendy A. Parker

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James A. Reed and Michael R. Kohlhaas of Bingham Greenebaum Doll represent clients in a wide spectrum of relationship transition and wealth planning matters, including premarital agreements, estate planning, cohabitation, separation, divorce (especially involving high net worth individuals and/or complex asset issues), custody, parenting arrangements, adoption, and domestic partnerships. Bingham Greenebaum Doll, a multidisciplinary law firm serving regional, national, and international clients, is the fourth-largest law firm in Indiana. The firm’s main practices include corporate, property, litigation, labor, government law, and personal services law. Visit the firm’s website at www.bgdlegal.com.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

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Trial Court Infringed upon Mother’s Custodial Rights

Family Law Case Review

Case: In the Paternity of J.W. Bailey R. Dailey v. Justin L. Piersimoni
by Mike Kohlhaas, Bingham Greenebaum Doll

HELD: Trial court’s phase-in parenting time order infringed upon Mother’s custodial rights by delegating decision-making power to a social service provider.

HELD: Trial court erred when it held Mother in contempt for not doing enough to arrange supervised parenting time and therapy sessions with the social service provider, because the order that required same did not place any specific, unambiguous scheduling obligations upon Mother.

FACTS AND PROCEDURAL HISTORY:
Child was born to Mother and Father in 2009. Paternity was established in 2012. At the time, Father was in prison for battering Mother, and Mother was granted sole legal custody of Child.

After his release from prison, Father sought parenting time with Child. After a hearing, the trial court issued a supervised, phase-in parenting time order to be overseen by the “Family Ties” program in Angola.

Father and Child’s initial supervised parenting time sessions were therapeutic in nature, supervised by a Family Ties therapist. However, Mother then requested that the parenting time sessions be supervised by someone else. Mother and Family Ties worked to schedule sessions with a different supervisor, and when that scheduling process was unsuccessful, the director of Family Ties wrote a letter to the trial court stating that Mother was non-compliant. A contempt petition by Father against Mother followed.

Though Mother testified as to the conflicts and other circumstances that made scheduling Family Ties sessions very difficult, the trial court found Mother in contempt “for denying parenting time.”  Mother was sentenced to 30 days in jail, which Mother could purge by paying $750 towards Father’s attorney’s and demonstrating immediate compliance with the trial court’s orders. Mother appealed.

On appeal, the Court concluded that the trial court had improperly delegated to Family Ties. As the sole legal custodian, it was Mother’s decision whether child would receive mental health care and, if so, from whom. When the trial court enforced Family Ties’ assignment of Father’s therapist to also provide therapy to Child, it usurped an authority that belonged to Mother and gave it to Family Ties. This was error.

As to the contempt finding, the Court found that Mother’s apparent conflicts that did not allow her to schedule Family Ties sessions (e.g, Child’s gymnastics) were in good faith. Because the trial court’s parenting time order imposed only broad and ambiguous obligations upon Mother, Mother had not failed to do anything that was specifically required of her. Therefore, the finding of contempt was error.

In a 2-1 decision, the trial court’s order was reversed.

Judge Robb’s concurrence and Chief Judge Vaidik’s dissent discussed that Mother never appealed the original May 2016 parenting time order that allowed Family Ties the discretion in question and, thus, whether Mother should be required to live with its consequences as a result.

To view the text of this opinion in its entirety, click here: n the Paternity of J.W. Bailey R. Dailey v. Justin L. Piersimoni

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James A. Reed and Michael R. Kohlhaas of Bingham Greenebaum Doll represent clients in a wide spectrum of relationship transition and wealth planning matters, including premarital agreements, estate planning, cohabitation, separation, divorce (especially involving high net worth individuals and/or complex asset issues), custody, parenting arrangements, adoption, and domestic partnerships. Bingham Greenebaum Doll, a multidisciplinary law firm serving regional, national, and international clients, is the fourth-largest law firm in Indiana. The firm’s main practices include corporate, property, litigation, labor, government law, and personal services law. Visit the firm’s website at www.bgdlegal.com.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

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When Going Through a Mediation, Divorce, Child Support, or Paternity Action Make Sure You or Your Attorney are Aware of These Issues

By Richard Mann, Richard A. Mann, P.C., Indianapolis

People going through divorce, paternity, or child support matters may make decisions that unknowingly have significant financial affect upon them. Under Indiana Law child support orders are required to address the dependency exemption for children.   See I.C. 31-16-6-1.5 which states” (a) A court shall specify in a child support order which parent of a child may claim the child as a dependent for purposes of federal and state taxes.

(b) In determining which parent may claim the child as a dependent under subsection (a), the court shall consider the following:

(1) The value of claiming the child as a dependent at the marginal tax rate of each parent.

(2) The income of each parent.

(3) The age of the child or children and the number of years that the child or children could be claimed as a dependent or dependents.

(4) Each parent’s percentage of the costs of supporting the child or children.

(5) If applicable, the financial aid benefit for postsecondary education for the child or children.

(6) If applicable, the financial burden each parent assumed under the property settlement in a dissolution proceeding.

(7) Any other relevant factors.”

Many people think the custodial parent receives the exemption.  That is the default under federal law if the order is silent.  Along with the dependency exemption there are other considerations such as head of household status especially in cases with equal parenting time, lifetime learning credits, child care creditunder 17 child credit, etc. As far as the child care credit, a number that goes into the child support calculation is the cost of child care.  A little known or used provision of the Indiana Child Support Guidelines states as follows: In circumstances where a parent claims the work‑related child care credit for tax purposes, it would be appropriate to reduce the amount claimed as work‑related child care expense by the amount of tax saving to the parent.  The exact amount of the credit may not be known at the time support is set, but counsel should be able to make a rough calculation as to its effect See commentary 3E1. What this means is that number could be reduced by the tax benefit by the custodial parent therefore reducing the child support. This may be fair as the non-custodial parent’s support includes a percentage based upon the relative income and pays the child care with no tax benefit.

I regularly am involved, when I mediate, when one or both parties are not aware of these provisions or the effect upon their case.  Many lawyers have not taken a tax course or it has been many years since they did.  In today’s family law setting you must be aware of many areas of law, since as explained above, tax could have a significant effect on your case, understanding of pensions and retirement may be a part of divorce, businesses may need dividing, social security benefits (the difference between SSI, SSD and SSR), food stamps, vouchers, employer provided health insurance, and bankruptcy is often a possibility in such matters.

The following article is an article from the IRS outlining many tax considerations.  Summer Camp may even qualify for the child care credit.

Many parents send their children to summer day camps while they work or look for work. The IRS urges those who do to save their paperwork for the Child and Dependent Care Tax Credit. Eligible taxpayers may be able claim it on their taxes in 2018 if they paid for day camp or for someone to care for a child, dependent or spouse during 2017.

Here are a few key facts to know about this credit:

  1. Qualifying Person. The care must have been for “qualifying persons.” A qualifying person can be a child under age 13. A qualifying person can also be a spouse or dependent who lived with the taxpayer for more than half the year and is physically or mentally incapable of self-care.
  2. Work-Related Expenses. The care must have been necessary so the taxpayer could work or look for work. For those who are married, the care also must have been necessary so a spouse could work or look for work. This rule does not apply if the spouse was disabled or a full-time student.
  3. Earned Income. The taxpayer — and their spouse if married filing jointly — must have earned income for the tax year. Special rules apply to a spouse who is a student or disabled.
  4. Credit Percentage/Expense Limits. The credit is worth between 20 and 35 percent of allowable expenses. The percentage depends on the income amount. Allowable expenses are limited to $3,000 for care of one qualifying person. The limit is $6,000 if the taxpayer paid for the care of two or more.
  5. Care Provider Information. The name, address and taxpayer identification number of the care provider must be included on the return. The childcare provider cannot be the taxpayer’s spouse, dependent or the child’s parent.
  6. IRS Interactive Tax Assistant tool. Use Am I Eligible to Claim the Child and Dependent Care Credit? tool on IRS.gov to help determine if eligible to claim the credit.
  7. Dependent Care Benefits. Special rules apply for people who get dependent care benefits from their employer. See Form 2441, Child and Dependent Care Expenses, has more on these rules. File the form with a tax return.
  8. Special Circumstances. Since every family is different, the IRS has a series of exceptions to the rules in the qualification process. These exceptions allow a greater number of families to take advantage of the credit. For more information, see IRS Publication 503, Child and Dependent Care Expenses.

Even if the childcare provider is a sitter in the home, taxpayers may qualify for the credit. Taxpayers who pay someone to come to their home and care for their dependent or spouse may be a household employer. They may have to withhold and pay Social Security and Medicare tax and pay federal unemployment tax. Find more on that in IRS Publication 926, Household Employer’s Tax Guide.

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Richard A. Mann has been practicing Family Law for more than 37 years in the Indianapolis area and throughout the State of Indiana. He is a Certified Family Law Specialist as certified by the Family Law Certification Committee, a Registered Family Law and Civil Law Mediator and Guardian ad Litem and Parenting Coordinator. Mr. Mann and his firm, Richard A. Mann, P.C. Attorneys at Law, are proud to have been one of the firms who represented Same-Sex couples who were successful in overturning Indiana’s ban on Same-Sex marriage. He continues to fight discrimination in the law.

While a large portion of Mr. Mann’s practice is in the Family Law area he also represents several corporations on contract, personnel and other matters. He also has a varied General Practice in wills, estates, juvenile matters, collections, probate throughout the state of Indiana. Mr. Mann has tried murder cases as well as a death penalty case.

Mr. Mann has been selected for inclusion in Super Lawyers SuperLawyers Edition for 2009, 2010, 2011, 2012, 2013, 2014, 2015 & 2016.

Follow Richard Mann on FacebookTwitter, or read more blogs by him here.

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Trial Court Erred in Imputing Both Parties Incomes

Family Law Case Review

Case: Karen B. Salser v. Gregg A. Salser
by Mike Kohlhaas, Bingham Greenebaum Doll

HELD: Trial court erred when it imputed Mother to full-time employment as a nurse practitioner, even though her history for the previous five years had been to work about half-time and Mother’s testimony was that no additional hours were available through her current employer.

HELD: Trial court erred when it failed to include Father’s irregular bonus income, which has the potential to equal 28% of his annual base income, in any part of the child support calculation.

HELD: Trial court erred when it ordered the parents to contribute equally to post-secondary educational expenses. Because the equal division was premised upon the erroneous imputation of Mother to full-time employment, then the post-secondary educational expense division was also error.

FACTS AND PROCEDURAL HISTORY:
The parties married in 1993 and filed for dissolution in 2014. At the time of the dissolution proceedings, the parties had one child in college and one in middle school.

Mother was a nurse practitioner who worked part-time and hourly for a physician. For 2012 through 2015, her income varied from $39,946 to $49,786 per year.

Father was a pharmaceutical rep. He earned a base salary of $95,000 per year, but with bonus opportunities of up to another $27,000 per year.

Following the final hearing, the trial court issued its Decree, which included the following pertinent provisions:

1.     The child support order was based upon imputing Mother to full-time employment at her current hourly rate.

2.     The child support order disregarded Father’s potential bonus income altogether.

3.     Because Mother’s imputed income level was comparable to Father’s income level, the trial court’s post-secondary educational expense order provided that the son should pay 34% of his college expenses, with the remainder divided equally between Mother and Father.

Mother appealed.

The Court of Appeals agreed with Mother that imputation was error. The Court relied primarily upon part-time employment by Mother having become established practice during the marriage, coupled with the evidence that no additional hours were available through Mother’s current employer. There was also no evidence that Mother was attempting to reduce her income to avoid a child support obligation.

The Court also agreed with Mother that it was improper for the trial court to completely disregarding Father’s potential bonus income. The Court specifically noted the percentage calculation set forth in the Guidelines that can be developed to provide that a specific fraction of each bonus payment is paid as child support.

Finally, because Mother was improperly imputed to full-time earning potential, the post-secondary educational expense order — which was derived in part from Mother’s imputed income level — was also erroneous.

The case was remanded for a recalculation of child support and the post-secondary educational expense order, consistent with the Court’s opinion.

Judge Bradford dissented, noting the great deference that the Guidelines and case law afford to trial courts, not just in family law matters generally, but in deciding whether to impute income and how to handle bonus income in particular. “Mother, a licensed nurse practitioner, has the ability to work full-time but simply chooses not to, numerous opportunities are available in Mother’s line of work within the community, and Mother would make the same hourly rate ($50 per hour) or higher if she were to accept a full time position.” 

To view the text of this opinion in its entirety, click here: Karen B. Salser v. Gregg A. Salser

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James A. Reed and Michael R. Kohlhaas of Bingham Greenebaum Doll represent clients in a wide spectrum of relationship transition and wealth planning matters, including premarital agreements, estate planning, cohabitation, separation, divorce (especially involving high net worth individuals and/or complex asset issues), custody, parenting arrangements, adoption, and domestic partnerships. Bingham Greenebaum Doll, a multidisciplinary law firm serving regional, national, and international clients, is the fourth-largest law firm in Indiana. The firm’s main practices include corporate, property, litigation, labor, government law, and personal services law. Visit the firm’s website at www.bgdlegal.com.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

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