Tag Archive | "Paternity"

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 when Child Support Arrearange Calculation Failed to Credit Intercepted Money from Father’s Bank Account

Case: In re the Paternity of D.M.Y., et al., M.R. v. B.Y.
Case Summary by Mike Kohlhaas, Bingham Greenebaum Doll

HELD: Indiana Supreme Court holds that trial court erred in a child support arrearage calculation when its calculation failed to credit Father for $7,025 that was intercepted from Father’s bank account and disbursed to Mother.

FACTS AND PROCEDURAL HISTORY:
In 1999, Father’s paternity of two children was established, and he was ordered to pay support of $146/wk. In 2010, the trial court determined a support arrearage of $21,337. The trial court further released $15,000 to Mother that had been attached from Father’s bank account.

In 2011, another $7,025 was intercepted from Father’s bank account and, again, disbursed to Mother — but not until early 2012.

Father subsequently moved to determine his arrearage. At a hearing, there was an issue over a summary exhibit that purported to calculate Father’s arrearage as of December 31, 2011. Father objected that the exhibit was inaccurate because, while it was accurate as to December 31, 2011, it did not credit Father for the $7,025 that was released to Mother in early 2012. Nevertheless, after the hearing, the trial court found Father to be in arrears of $6,483 as of December 31, 2011 – technically correct, but it did not credit Father for the $7,025 released to Mother prior to the hearing.

Mother later sought to have Father held in contempt. Following another hearing, the trial court found Father’s arrearage to then be $13,055 as of the hearing, a sum which, again, did not credit Father for the $7,205 attachment. Father appealed, but the Court of Appeals, in a 2-1 memorandum decision, affirmed the trial court’s order.

After granting transfer, the Indiana Supreme Court largely adopted Judge Robb’s dissent in the Court of Appeals opinion, concluding that the arrearage was miscalculated by the trial court. The Court rejected Mother’s argument that Father’s appeal was untimely because he should have appealed the prior order that did not credit him $7,025. The Court noted that, technically speaking, that order was correct because it calculated an arrearage as of December 31, 2011, and, thus, Father had nothing to appeal after that order.

The trial court’s order was reversed, and remanded with instructions to credit Father $7,025 in its arrearage calculation.

To view the text of this opinion in its entirety, click here: In re the Paternity of D.M.Y., et al., M.R. v. B.Y.

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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 Within Discretion in Barring Putative Father from Establishing Paternity

Case: In the Matter of the Adoption and Paternity of K.G.B., E.S. v. T.B. and K.B.
Case Summary by Mike Kohlhaas and Tamara McMillian, Bingham Greenebaum Doll

HELD:  The trial court’s ruling was upheld that Putative Father failed to timely register with Indiana’s Putative Father Registry (“Registry”) which resulted in him irrevocably and implicitly consenting to Child’s adoption by Child’s maternal grandfather. The trial court was within its discretion in barring Putative Father from establishing paternity of Child.

FACTS AND PROCEDURAL HISTORY:
In August 2012, Mother gave birth to Child. In August 2013, Mother filed a request with the Registry searching for any registered putative father of Child. The Registry search results indicated that no putative father of the Child was registered and no paternity determination was on file for Child. On August 27, 2013, Child’s maternal grandfather, T.B., filed a petition to adopt Child. Mother consented to T.B. adopting Child.  T.B. and Mother agreed that Mother would retain her maternal rights to Child. Mother also intended to share in the parental responsibilities and obligations with T.B.

In September 2013, T.B. filed an amended petition to adopt Child including Mother’s consent for him to adopt and evidence that no putative father registered with the Registry and there was no paternity determination on file.

In October 2013, Putative Father filed a paternity petition and a motion contesting the adoption of Child by T.B. Although Putative Father acknowledged that he failed to timely register with the Registry, he asserted that he should have been notified of the pending adoption proceedings regarding Child. Putative Father also alleged that the Indiana statutes were unconstitutional as applied to him and his due process rights were violated. Mother moved to dismiss Putative Father’s paternity action and T.B. filed a motion to strike Putative Father’s motion. In January 2014, Putative Father filed an amended paternity petition as being brought by “as next friend for” Child and filed a motion to correct error. The trial court denied Putative Father’s motion to correct errors. Putative Father appealed.

The Court of Appeals essentially agreed with Mother and T.B. on all of the paternity and constitutional issues. The Court concluded that the trial court correctly held Putative Father was not entitled to notice of T.B.’s adoption proceedings because Putative Father failed to timely register with the Registry. Putative Father’s failure to timely register resulted in an irrevocably implied consent and he was barred from establishing paternity of Child. The court reasoned that when Putative Father failed to register within the required time period under Ind. Code  § 31-19-5-12, he waived notice of any adoption proceedings. Since Putative Father was barred from establishing paternity, the trial court appropriately held that he was also blocked from establishing paternity as next friend of a child.

The Court also held that Putative Father failed to meet his burden of establishing that the statutes were unconstitutionally applied to him. Putative Father lacked evidence that his due process rights were violated because he failed to demonstrate that he had established any substantial relationship with Child prior to T.B.’s adoption request.

The trial court’s orders were affirmed.

To view the text of this opinion in its entirety, click here: In the Matter of the Adoption and Paternity of K.G.B., E.S. v. T.B. and K.B.

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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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Dismissal of a Paternity Matter Acts to Terminate…

Case: Belinda Douglas v. Neil Spicer and L.S.
by Mike Kohlhaas, Bingham Greenebaum Doll

HELD: The dismissal of a paternity matter acts to terminate any related preliminary orders that were issued in the case, much like a preliminary order in a dissolution case terminates with dismissal of the dissolution matter.

HELD: The trial court correctly calculated a child support arrearage by looking at the time from when the preliminary child support order was issued, until the paternity case was dismissed.

FACTS AND PROCEDURAL HISTORY:
Mother and Father were unmarried and living together when, in early 1994, Mother gave birth to Child. Father was listed on Child’s birth certificate, and the parties continued living together and sharing household expenses. However, when Child was four, Father moved out.

In 2004, Mother initiated a paternity action. In early 2005, the trial court issued a preliminary child support order of $200 per week. However, eight months later — after both parties failed to appear at a status hearing — the trial court dismissed the matter. Father never made any of the $200 court-ordered payments.  But, Father continued to provide regular and consistent financial support for Child, including providing health insurance coverage.

In 2012, Mother filed a “Motion to Re-Open the Case” along with a request to adjudicate the child support arrearage. After a hearing, the trial court found an arrearage of $6,600, which the court calculated as $200 per week from the entry of the preliminary support order, through when the case was dismissed. Mother appealed, arguing that Father’s arrearage was $74,000, relying in part upon a common law support theory.

The Court of Appeals concluded that the trial court acted within its discretion in calculating the arrearage. First, the formal obligation for Father to pay $200 per week terminated by operation of law with the dismissal of the case. Second, the evidence presented to the trial court about the substantial and consistent informal financial support that Father provided for Child supported the trial court’s decision to decline finding any additional arrearage.

The trial court’s judgment was affirmed.

To view the text of this opinion in its entirety, click here: Belinda Douglas v. Neil Spicer and L.S.

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The Indiana Family Law Update is a free service provided by the Matrimonial Law Group of Bingham Greenebaum Doll, LLP. While significant efforts are made to ensure an accurate summary and reproduction of each opinion, readers are advised to verify all content and analysis with a traditional case law reporter before relying on the content and analysis offered here.
ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

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