Mother’s Cancer Prognosis Results in Difficult Decision in North Carolina Custody Case

Posted May 31, 2011 in Family Law by Lonich and Patton.

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May 31, 2011
Mother’s Cancer Prognosis Results in Difficult Decision in North Carolina Custody Case
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A judge’s difficult decision in a North Carolina custody case is garnering national attention and criticism and raising questions of what it means to be an unfit parent.  Durham County Judge Nancy Gordan ruled that because Alaina Giorano has Stage IV breast cancer and her prognosis is uncertain, her children, 11 year old Sofia and 5 year old Bud, must move from Durham to Chicago to live with their father.   She wrote: “The course of her disease is unknown.  Children who have a parent with cancer need more contact with the non-ill parent.”  The judge also noted that she ruled in favor of the father because he is employed in Chicago and is the family’s sole breadwinner.  Theoretically, Ms. Giordano could also move to Chicago to live closer to the children since she is unemployed, but she is undergoing treatment at Duke University and is not inclined to look for a new treatment team since her health is currently stable.

Ms. Giordano is appealing the ruling, and is gathering support from many across the country.  Over 7,000 people have signed an online petition urging North Carolina Governor Bev Perdue to overturn the decision.  Ms. Giordano has also appeared on the Today Show, where she told Matt Lauer,”I think it is a dangerous ruling for me and my children and how it will affect us, but also for people all over the world with cancer. This is a bad precedent.”

This ruling is sparking a heated debate between commenters on online articles about the case.  Many feel that it is unfair to use a cancer patient’s diagnosis against her to deny custody of her children and feel that the children will be traumatized when taken away from their mother during her time of need.  Others believe that the ruling is in the children’s best interests, so that they are shielded from the difficulty of their mother’s illness.

Although the above case was decided in North Carolina and of questionable wisdom, the issue of a parent’s physical health and disabilities can be a factor in custody cases and has been addressed by California courts as well. The most prominent Supreme Court case on this issue, In re Marriage of Carney (l979) 24 Cal. 3d 725, 598 P.2d 472, provides that a parent’s disability cannot be the sole basis upon which custody is denied.

However, Carney has been repeatedly cited by non-disabled parents who continue to argue that the court can still consider the health or disability of a parent as one of the many factors in considering whether a child should be in the custody of disabled parent.

To bolster the rights of disabled parents, in late August 2010 California Governor Arnold Schwarzenegger signed SB 1188 into law (effective January 1, 2011 and now California Family Code Section 3049). This law shifts the burden of proof onto the parent who raises the disability. It is hoped that Family Code section 3049 will afford disabled parents greater protection in California family law cases by making it more difficult to use their disability to alter custody or visitation orders.

If you have questions about child custody or visitation and would like to speak with an experienced Family Law Attorney, please contact Lonich & Patton for further information.  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 include legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship.

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There’s No “Hiding the Ball” in Family Law Cases: The Importance of Understanding your Fiduciary Obligations to your Spouse or Domestic Partner

Posted May 6, 2011 in Family Law by Eric Despotes.

The California Family Code incorporates the rules of civil discovery that are generally applicable in all civil cases.  Discovery is the process by which the parties to a legal dispute obtain information about the other side’s case so that the parties can engage in informed settlement negotiations and prepare their case for trial.  Discovery devices include interrogatories (written questions to the other party requiring written responses under oath), depositions (taking oral testimony under oath from the other party), and inspection demands (requiring the other party to produce documents and/or tangible things for inspection).

In an ordinary “arm’s length” civil case (a contract dispute, for example), it is crucial to utilize these procedures effectively, as they are often the only means available to obtain information about the other side’s case.  Parties in “arm’s length” civil disputes ordinarily have no independent duty to give the other side any information outside of the discovery process.

While discovery sometimes has its purpose in family law cases, there is an important distinction that makes family law cases unique.  Under the Family Code, spouses owe one another fiduciary obligations both during the marriage and after separation.  In other words, spouses must act “with the highest fairness and honor” in their dealings with one another.  This is the highest duty known to the law.  It is akin to the duty an attorney owes to his or her client and the duty owed to a business partner.

Why is this significant?  It is significant because it means spouses have an independent obligation to disclose all material facts and information regarding the existence, characterization, and valuation of assets and debts, and all information about income and expenses, without request.  This duty applies both during marriage and after separation until the date the asset or liability in question is actually distributed and, as to support and professional fees, until a binding resolution is reached on these issues.  A spouse need not conduct formal discovery to enforce these obligations.

The consequences for violating one’s fiduciary duty can be devastating.  Emblematic of this is the landmark California Court of Appeals decision in In re Marriage of Feldman, in which the court upheld an order levying $390,000 in sanctions against the husband for the husband’s failure to disclose financial information.  The Feldman decision, issued in 2007, has generated much discussion in the legal community and is a significant articulation of the importance of this issue.

Other significant consequences can result from failure to adhere to spousal fiduciary obligations beyond monetary sanctions.  It is therefore essential that parties initiating dissolution proceedings are aware of their rights and obligations from the outset, and that they carefully abide by the rules governing fiduciary obligations to avoid adverse consequences down the road.

If you have questions regarding your fiduciary obligations or those of your spouse, please contact the experienced Family Law attorneys at Lonich & Patton for further information.  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 include legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship.

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Estate and Tax Planning for Married Couples

Posted May 6, 2011 in Estate Planning by Michael Lonich.

With the recent changes to the tax law for 2011, there is now a $5M unified tax exemption for individuals who pass away in 2011 or 2012.  This has created an opportunity to avoid the payment of Federal estate taxes over the next few years.

If you and your spouse are U.S. citizens, you can leave each other any amount with no Federal estate tax exposure.  This is referred to as the unlimited marital deduction privilege and provides a significant Federal estate tax shelter.  It is especially advantageous with the current high unified credit over the next two years.

However, if you have a large estate, leaving everything to your spouse may result in your spouse having an estate that exceeds the Federal estate tax exemption when he or she dies.  In that case, there are a number of other estate tax saving strategies you should consider, some of which are set forth below.

Giving money to charities is always an approach to lower or reduce your taxable estate.

A frequently used approach is to utilize the annual Federal gift tax exclusion ($13,000 per person) by making yearly gifts up to the exclusion amount which will reduce the taxable value of your estate without reducing your lifetime Federal gift tax exemption.  Both you and your spouse can make an annual gift of $13,000 per person.

You can contribute to the education of your children or grandchildren by making payments directly to a school as a method to reduce your estate.  Direct payments to the school will not impact your unified estate and gift tax exemption.

Appreciating assets are always a little tricky but with the relatively significant unified estate and gift tax exemption, you can give away up to $5M worth of appreciating assets (stocks, real estate, etc.) without triggering any Federal gift tax.  Your spouse can do likewise.  Although this reduces your unified exemption and is taken against your lifetime exemption, the gifts are valued on the date of the gift and if they continue to appreciate for years while you are still alive you have avoided that additional appreciation being captured in your estate for estate tax purposes.  There are other important considerations when contemplating gifting versus passing assets on your death such as utilizing stepped up basis.

An irrevocable life insurance trust (ILIT) can be an important estate planning tool and assist in paying estate taxes.  An ILIT is not in your control and thus not a part of your estate and thus is not taxable upon your death.  With a typical life insurance policy, although perhaps income tax free, the proceeds are included in your estate for Federal estate tax purposes.

If you have questions regarding estate and tax planning, please contact the experienced estate planning attorneys at Lonich & Patton for further information.  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 include legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship

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Private Judging in Marital Dissolution Cases: Not Simply “For the Wealthy”

Posted May 4, 2011 in Family Law by Mitchell Ehrlich.

There is a commonly held perception that hiring a Private Judge to handle a marital dissolution case is something that only the wealthy do.  Though there are additional costs incurred in using a Private Judge for Marital Dissolution proceedings, these costs are more than offset by other kinds of cash savings, which can be substantial.

What is a “Private Judge?”

A “Private Judge” is an attorney who meets specific legal qualifications and experience and who is appointed by the parties (by agreement).  A Temporary Judge/Private Judge generally has the same responsibilities, authority, and roles as those of the full time Superior Court Judge.

Hiring a Private Judge and Scope of Authority

The appointment of a Private Judge begins by a mutual agreement of the parties which is memorialized in a written Stipulation. The parties will agree on the scope of authority of the private judge, meaning what areas of the case the Private Judge will make decisions upon. A Private Judge can be an all purpose Judge handing all issues, or the parties can agree to limit the scope to particular issues, such as property division, support, child custody etc.

The Role of a Private Judge

A Private Judge’s ultimate role is to be a trial judge or finder of fact over disputed issues. If a matter does proceed to contested trial with a Private Judge, it will proceed in a manner identical to a trial in the Superior Court, with witness and expert testimony, documents, rules of evidence etc. except that the setting may be somewhat less formal (and therefore less intimidating, as they are often done in a conference room at the Private Judge’s office).

However, over and above that, and well prior to trial, a Private Judge can provide neutral, third party input on probable solutions and can be instrumental in settling cases short of trial through the case management and settlement conferences.

Costs and Cost Savings

Typically, Private Judges charge an hourly rate with the costs shared equally by both parties. The ultimate cost depends on how many hours are consumed and how long the case takes to come to a resolution.  However, the cost of a Private Judge is more than off-set by the cost-saving and other associated benefits.

Litigating contested cases in the Superior Court can be extremely expensive and very time consuming (which in turns lead to more expense).  Because of busy calendars and overrun dockets, a family law trial may actually occur over a series of days or half days spread out over weeks or months and possibly years. Nearly every attorney has experienced a trial that involves one day in May, another day in June and so on. With each interrupted day, additional costs are incurred through duplicative preparation, delays etc.

Even motion issues, which are disputed issues that are typically handled in under 30 minutes, are done more cost efficiently with Private Judges. In the Superior Court a motion involves substantial briefing back and forth in the 30 days prior to the hearing. On the day of the hearing, the parties may wait around for up to 2 hours or more to have their case heard.  Often the Court will run out of time and make them come back at a later date, or after 20 minutes of hearing, determine that more time is needed and make the parties come back for a second hearing. Even if the matter is heard that day, a decision may not be rendered for weeks or months given the heavy caseload that California Judges work under.

With a Private Judge, a time slot is reserved for your case. The matter is briefed in an agreed upon fashion and the briefs are fully reviewed. Often brief are shorter and less fact oriented as the Private Judge is typically very familiar with both the law and the facts. The hearing will take place at the scheduled time with little or no waiting around.  Private Judges can also engage in a teleconferences or informal hearings that often negate the need for formal hearings.

Time Savings and Other Benefits

Family Law Private Judges are typically former Family Law attorneys who are experts in the field of Family Law and are able to evaluate the facts of a case quickly and either resolve the dispute or craft out an equitable resolution.  That is not always the case with Superior Court Judges, who often move from department to department every few years (i.e. Criminal to Civil to Family).

While Superior Court Judges have extremely large case loads such that litigants often find their Judge does not remember all the details or history of their case (and may need to be repeatedly reminded of what happened previously), due to smaller case loads and more frequent case management, a Private Judge is almost always very familiar with the parties, the facts and the history and can get through the case quickly and can render decisions much sooner.

Many litigants who have been in both Superior Court and Private Judging also prefer the privacy and what some have called “more dignified” benefits in Private Judging. For example, few of the pleadings or letters ever find their way in the Superior Court file which is accessible to the public. In Superior Court cases almost everything ends up in the court file. It can also be less stressful and more calming and ultimately more “private” to have their case handled in a Private Judge’s office conference room rather than in Superior Court courtroom in from the entire courtroom staff, and tens if not hundreds of other litigants and spectators in the courtroom whom they don’t know.

If you have a family law matter and are interested in learning how using a Private Judge can assist you in resolving your issues, please contact the experienced Family Law attorneys at Lonich & Patton for further information.  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 include legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship.

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What is Income for Purposes of Support?

Posted May 3, 2011 in Family Law by Gina Policastri.

In a case of first impression, the Fourth District Court of Appeals affirmed a trial court’s ruling that two benefits received by a member of the Navy – “basic allowing for housing” (BAH) and “basic allowance for subsistence” (BAS) – can be considered income for purposes of child and spousal support.  Father argued that inclusion of these benefits was improper because under federal law they are not taxable income and the court violated the federal preemption doctrine by holding that they were income for purposes of support.  The trial court disagreed, stating that “(i)f it looks like income, it is income no matter how it’s paid to you.”  In affirming the trial court, the panel cited and quoted from sister state cases on this issue, which have held that “(t)he nontaxable status of military allowances does not suggest Congress had any preemptive intent with regard to either child or spousal support” and “the protection of certain military allowances from wage garnishment for support arrearages does not indicate Congress intended to preempt state family support law.”  It concluded that “the doctrine is inapplicable, as under United State Supreme Court authority family law support matters are within the province of state law unless ‘Congress has positively required by direct enactment’ that state law be pre-empted.’  We join in courts across the nation in holding that such allowances of are included in a party’s gross income for purpose of support when state law encompasses them.” 

For more information about California support issues, please contact us.  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 include legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship.

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