Hardship Factors in Child Support Cases

Posted April 24, 2017 in Family Law by Michael Lonich.

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April 24, 2017
Hardship Factors in Child Support Cases
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May a parent claim a child from a different relationship as a hardship on their income when figuring in the guideline amount of support? The short answers is yes, you can claim a minor child from a different relationship as a hardship deduction if you meet the requirements.

Hardship deductions from income for supporting other children only apply to a child who is either a natural or adopted child of the party involved in the child support case. For example, if you were married and had two children from the marriage, then get divorced and later have another child form a second marriage, the child from the second marriage could potentially considered as a hardship on your income when calculating support for the two children from your marriage.

However, it is important to note that stepchildren cannot be considered as a hardship deduction, only natural or adopted children. The reason is that it only applies to children where there is a legal obligation to provide support. Also, the hardship child needs to reside with the parent. A child from another relationship that doesn’t reside with the parent involved in the child support case would not qualify, although child support paid for other children can be considered separately from hardships in calculating guideline child support.

Another important element to understand is that the maximum hardship deduction for a hardship child cannot exceed the amount of support allocated to each child covered by the child support order. This puts a limitation on how much hardship can be claimed, with the intent to protect the children who already are due support by the parent.

California Family Code sections 4070-4073 regulate the hardship claims that can be made in a child support case. Something to keep in mind is that the hardship deduction for another child may not affect the amount of support as much as the parent thinks it will. For a person paying support, a hardship child deduction will lower the support, but since there usually is also a benefit from the extra tax deduction that another child provides, it often does not lower it as much as people expect.

Many courts, such as the Santa Clara County Superior Court, use a computer program when calculating support called Dissomaster. A Dissomaster report is often attached to any child support order, and shows the breakdown of each parent’s income, and automatically calculates the guideline support. If using this software, the hardship child would usually be given either a factor of .5 or 1.0 in the hardship deduction section, depending on if the hardship child is fully or partially supported by the parent. When the factor is entered, the program will automatically calculate the amount of the hardship deduction, and apply it to the child support guideline calculation.

Because getting a hardship child to be figured into the child support amount can be complicated, it may be necessary for a parent to obtain the assistance of a family law attorney to ensure that the parent gets the proper deduction credited to them.

If you are considering a divorce or legal separation and would like more information about hardship factors, please contact the experienced family law attorneys at Lonich & Patton. We can help you understand and manage any support issues that may arise.

Lastly, please remember that each individual situation is unique, and results discussed in this posit are not a guarantee of future results. While this post may detail general legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

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The More The Merrier Revisited: Tri-Custody in New York

Posted March 31, 2017 in Family Law by Michael Lonich.

As we have discussed on this blog before, California allows a child to have more than two legal parents.  With the rise of assisted reproduction and wider recognition of non-traditional family units, it is growing apparent that children may receive substantial physical and emotional care from more than two people.

In California, the Martinez v. Vaziri case concluded that a child’s biological mother, biological father, and third person—the man who cared for the child and was the child’s only father figure—could all claim legal parentage.  The case’s holding was grounded in a California statute (Family Code Section 7611) that allows children to have more than two legal parents if recognizing only two parents would be detrimental to the child.

Now, New York has stepped up to the plate in a case involving a polyamorous family.  After a lengthy custody battle, a judge awarded custody of a child to three different people.  When the child was born, the three people had been involved in a longstanding intimate relationship.  Two of the people were married, and the remaining person lived next door.  The married woman (Wife) could not conceive, so the family decided that the married man (Husband/Father) would impregnate the third woman (Mother), and the family would raise the child together.  Ultimately, Mother gave birth to a boy, but then, Wife and Husband/Father got divorced while Wife and Mother continued their relationship.  Even though Wife continued to see her son during his custodial time with his biological mother, Wife wished to formalize her own legal link to the boy.

Concluding that the child viewed both women as his mothers and would be devastated if any of his three parents were removed from his life, a New York judge granted parental rights to Wife, Husband/Father, and Mother.  Unlike in California, this decision is not grounded in a statutory right to have more than two parents, but the case evidences an emergent shift in the judiciary’s interpretation of what constitutes a family unit.

If you have any questions about establishing your child’s legal parentage, please contact the experienced family law attorneys at Lonich & Patton—we can help you understand and secure your and your child’s legal rights.

Lastly, please remember that each individual situation is unique, and results discussed in this post are not a guarantee of future results.  While this post may detail general legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship.

SOURCE:

http://www.cnn.com/2017/03/14/health/three-parent-custody-agreement-trnd/

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Understanding the Impact of the Spousal Fiduciary Duty on Estate Planning

Posted March 21, 2017 in Estate Planning, Family Law by Michael Lonich.

We have outlined the spousal fiduciary duty on this blog before; now, we’re delving a bit deeper to discuss the impact of the spousal fiduciary duty on estate planning.  Traditionally, California courts rely on a common law burden-shifting framework when confronted with the possibility that a spouse has unduly influenced his/her spouse’s estate planning decisions.  However, a 2014 case from a California Court of Appeal—Lintz v. Lintz— took a different approach, and instead, relied on the statutory spousal fiduciary duty articulated in California Family Code section 721 to resolve an estate planning/undue influence claim.

The common law framework provides that the person alleging undue influence bears the burden of proof.  However, the challenger can shift the burden to the proponent of a testamentary instrument by establishing, by a preponderance of the evidence, three elements: 1) a confidential relationship, 2) active procurement of the instrument, and 3) an undue benefit to the alleged influencer.

Departing from the common law, the Lintz court—faced with an allegedly abusive wife who intimidated her husband into amending his trust to her tremendous benefit and to the extreme detriment of her stepchildren—looked to Family Code section 721 when it decided in favor of the husband’s estate.  Section 721 creates a broad fiduciary duty between spouses that demands a duty of “the highest good faith and fair dealing.”  Further, neither spouse may take unfair advantage of the other.  As a result, if any inter-spousal transaction advantages only one spouse, a statutory presumption arises under section 721 that the advantaged spouse exercised undue influence.  The presumption is rebuttable—the advantaged spouse can demonstrate that the disadvantaged spouse’s action was freely and voluntarily made, with full knowledge of the facts, and with a complete understanding of the transaction.

California Family Code section 850 describes three categories of inter-spousal transactions: 1) community property to separate property, 2) separate property to community property, and 3) separate property of one spouse to separate property of other spouse.  Notably, the section does not consider transferring community or separate property to trusts.

The court concluded that section 721 applies because section 850 does include property transferred to revocable trusts—in Lintz, Wife’s undue influence caused Husband, via his trust, to transmute a large part of his separate property to community property.  Accordingly, the court held that Family Code section 721 creates a presumption of undue influence when one spouse names the other as a beneficiary in a revocable trust.

Criticism of the decision abounds—all estate plans that name a spouse as a beneficiary, by their very nature, benefit one spouse.  In turn, use of the Family Code undue influence presumption threatens to disturb all testamentary instruments, and litigation may flood the family courts as spouses seek to rebut the seemingly automatic presumption that Lintz creates.  On the other hand, some commenters believe Lintz does not indicate a new paradigm, but rather, showcases a court’s eagerness to remedy the serious injury inflicted by a spouse’s egregious influence.

At the very least, the Lintz case does demonstrate that estate planning and family law are deeply intertwined.  Consulting with an attorney to learn how a marriage or divorce can impact your testamentary wishes is always wise.  If you have any questions about your family law and/or estate planning needs, please contact the experienced attorneys at Lonich & Patton—we offer free half-hour consultations.

Lastly, please remember that each individual situation is unique, and results discussed in this post are not a guarantee of future results.  While this post may detail general legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship.

SOURCES:

California Family Code section 721

California Family Code section 850

Lintz v. Lintz (2014) 222 Cal.App.4th 1346.

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Lonich & Patton In The Community!

Posted February 9, 2017 in In the Community by Michael Lonich.

Mock trial is a great way to learn the practical tools of the legal trade.  Just ask Lonich & Patton attorney, Bobby Khalajestani, who competed in several moot court competitions during law school and was a member of Santa Clara Law School’s Trial Team!  Now though, Bobby is taking a seat at the judges’ table–in early February, he judged the 2017 Santa Clara High School Mock Trial Tournament.  In a mock criminal trial, over 400 participating students had to get several statements in during pretrial motions, make objections based on the Evidence Code, conduct direct and cross examinations, and give opening and closing statements.  Bobby reports that everybody competed at a very high level and displayed great court room skills!  The tournament is ongoing as the students progress through multiple rounds, so be sure to check out the competition schedule if you would like to watch these future lawyers in action.

Congratulations to the tournament’s participants, and good luck to everybody still in the game!

For more information about Bobby or any of our firm’s attorneys, please contact Lonich & Patton—we offer free half-hour consultation appointments to assess your family law and estate planning needs.

Please remember though, that each individual situation is unique, and results discussed on this site are not a guarantee of future results.  While our blog posts may detail general legal issues, they are not legal advice.  Use of this site does not create an attorney-client relationship.

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Trust Administration: How a Trustee Can Collect Reasonable Fees

Posted January 24, 2017 in Estate Planning by Michael Lonich.

Although trusts do avoid the complication and expense of probate proceedings, a trustee—the person given power to hold legal title to and to manage trust assets—is not necessarily spared the administrative burdens that can accompany estate management.  Trustee responsibilities can include clearing title to property held in the decedent’s name, the preparation and filing of estate and income tax returns, and the collection of insurance proceeds—essentially any task necessary to administer the trust as the trust instrument instructs.  Typically, the creator of the trust—the settlor—will appoint a trustee in the trust instrument and provide compensation from his or her estate for the trustee’s services.  However, if the trust instrument does not specify any compensation, California Probate Code § 15681 allows a trustee to receive “reasonable compensation under the circumstances.”

In re McLaughlin’s Estate defines “reasonable.”  First, the trial court has wide discretion when making a fee determination, but it should consider the following factors:

1) The gross income of the trust estate

2) The success or failure of the trustee’s estate administration

3) Any unusual skill or experience which the trustee may have brought to his/her work

4) The fidelity or disloyalty displayed by the trustee

5) The amount of risk and responsibility assumed by the trustee

6) The time spent by the trustee in carrying out the trust

7) Community customs as to fees allowed by settlors/courts or as to fees charged by trust companies and banks

8) The character of the administration work done

9) Whether the work was routine or involving skill and judgment

10) Any estimate which trustee has given of his/her own services.

In McLaughlin, the appeal court concluded, after considering the above factors, that the trial court justly allocated reasonable fees—the trustees had profitably and with special skill managed the trust property, had accurately summarized receipts and transactions, and had committed a large amount of time to the trust’s administration.

Estate of Nazro provides another example of the above factors in action: Here, although the trustee received dividend checks, made bank deposits, wrote checks, prepared quarterly accountings, and reviewed trust assets, the work did not consume much of the trustee’s time.  Further, the court noted that corporate trustees in the area customarily charged management fees based on a schedule of percentages of the value of the various trust assets.  Therefore, the court held that $2,500 was an appropriate amount of compensation for the trustee’s services.

Ultimately, managing a trust estate is not always a walk in the park—if not otherwise provided, trustees should not be afraid to ask for compensation for their services.  However, keep in mind that compensation must reasonable and proportional to the work done on behalf of the trust.

If you have recently been named or appointed as a trustee or you are interested in creating a trust, please contact the experienced attorneys at Lonich & Patton.  We can help you understand what being a trustee entails, and if you want to create a trust, how you can properly compensate your chosen trustee.

Lastly, please remember that each individual situation is unique, and results discussed in this post are not a guarantee of future results.  While this post may detail general legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship.

Sources:

California Probate Code § 15681

In re McLaughlin’s Estate (1954) 43 Cal.2d 462

Estate of Nazro (1971) 15 Cal.App.2d. 218

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