What To Do With Your Child’s College Fund During Divorce

Posted August 28, 2015 in Family Law by Jillian Green.

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August 28, 2015
What To Do With Your Child’s College Fund During Divorce
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With the rising cost of colleges around the nation, many parents have planned ahead for their children’s future and have started college savings accounts for their children shortly after birth. However, there is no question that tensions rise surrounding financial matters during divorce. Nonetheless, when it comes to a child’s college fund there needs to be a process of communication for the sake of the child’s educational and financial future.

In order to make communication easier, a framework should be set up during the divorce settlement process. Usually the hardest, and initial question, to address during the creation of the framework, is who will own the college savings plan (or 529).

As many parents know, a 529 plan is an education savings plan that is operated by a state or educational institution designed to help families set aside funds for future college costs. While many parties believe that a 529 plan is their child’s asset, it is actually an asset of the marriage and needs to be planned accordingly. Thus, parties need to discuss who will own the 529 plan. There are several options for the parties: 1) parents may either decide who will take individual control of the account, 2) freeze the account, or 3) split the account

1. Individual Control

If the parties decide to have one parent take individual control, that parent would be the only person who can make decisions regarding the use of the funds. It is recommended by experts for the control to go to the noncustodial parent. As certified financial planner Joe Orsolini says, “The noncustodial parent should own the 529 because the noncustodial parent’s assets and income are not included on the FAFSA. If the custodial parent owns the 529, then the value of the 529 will be included on the FAFSA, and this is especially important as the FAFSA asset protection allowance drops significantly next year.” This drop potentially means that families will be able to subtract less of their assets held in savings and investments from their net worth, which could decrease the student’s financial aid eligibility. If the non-controlling parent wants some security with the funds, he or she could be set up as an authorized user, which would allow him or her to see what is going on in the account and that parent should also be designated as the successor owner of the account.

2. Freezing the Account

Another option is freezing the funds, which would mean deposits are no longer made into the account and the money that is frozen in the account could only be designated for education purposes. Freezing the account prevents a former spouse from withdrawing money at any time for any reason. It also prevents a parent from using account funds to pay for the education of a child from a new marriage.

3. Split the Account

The last option is to split the 529 plan, which the judge can order and the state has to abide by. By splitting the plan, each half of the plan would be set up as a new account and owned by each individual spouse. However, if one party is worried about an irresponsible ex-spouse, he or she could set forth some clear language in the divorce decree that specifies funding to be used only for the child’s education. The court could also mandate the percentage that each parent will contribute toward the child’s education.

This divorce process is already difficult enough for all parties involved. Children should not be additionally burdened by the lack of a proper framework for their college education. For this reason, parents need to communicate and set up a proper plan for their child’s educational and financial future in order to ensure their child’s success for college.

If you have any questions about planning your child’s college funds during divorce or any other issue, the Certified Family Law Specialists at Lonich & Patton have decades of experience handling complex family law matters. Please contact the Certified Family Law Specialists 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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August: The Month of Child Support Awareness

Posted August 7, 2015 in Family Law by Michael Lonich.

“Children are the best part of ourselves-the sum of our past and the promise of our future, the guarantee that our lives and values and dreams will flourish long after we are gone,” said then President Bill Clinton when he made an official declaration in 1995 that recognized the month of August as Child Support Awareness Month.

Child Support Awareness Month is a time to highlight the vital role child support plays in the well-being and lives of millions of families in the United States. “Child Support Awareness Month is a time to salute parents who work hard to ensure their children grow up in stables homes and look forward to a bright future,” stated Yolo County Public Information Officer Beth Garbor. “It is also a time to help remind parents who are not always present that they are an important part of their children’s lives.”

Child support has become a widespread problem in the United States. According to the U.S. Census Bureau’s 2009 report: among the 6.9 million custodial single parents who were awarded child support in 2009, only 41.2% received all of the child support that was due- a 46.8% decrease from 2007.

When a non-custodial parent does not pay the child support order, it likely means that his or her children are missing out on income that they count on and will have to sacrifice accordingly. For many children, these monthly payments are all that stands between them and poverty.

“Children who receive support from both parents tend to do better in school and tend to have fewer behavioral problems through their lives,” said Yolo County Department of Child Support Services Director Natalie Dillon. “This support comes in many forms; emotional, mental, and financial.”

If you have any questions about child support or any other issue, the Certified Family Law Specialists at Lonich & Patton have decades of experience handling complex family law matters. Please contact the Certified Family Law Specialists 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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Ben Affleck and Jennifer Garner’s Divorce: Implications of the 10th Anniversary

Posted July 14, 2015 in Family Law by Jillian Green.

Ten years of marriage and three kids later, Ben Affleck and Jennifer Garner have announced their decision to split. The pair, who previously worked in two films together, made the announcement one day after their 10th wedding anniversary. While ten years is a significant milestone in its own respect, it may also give rise to legal implications in California.

There is a frequent misunderstanding that when a couple divorces after more than ten years of marriage, there is a law requiring the courts to order payments of long term support to be paid until a spouse dies, remarries, etc. However, this is not necessarily the case. This misconception may arise from California Family Code § 4336, which establishes a rebuttable presumption that a marriage of 10 years or more is a marriage of “long duration” for purposes of retaining spousal jurisdiction. This statute does not automatically force the courts to order long term support, rather it creates an indefinite reservation of spousal support jurisdiction that allows it to continue making decisions regarding the support if circumstances warrant such change. While the court may consider the duration of the marriage in making an order for spousal support, under California Family Code § 4320 there are also several other significant factors for the court to consider.

In Ben Affleck and Jennifer Garner’s upcoming divorce, Ms. Garner could potentially seek a bigger share of Mr. Affleck’s reported $75 million. Ms. Garner reported in March of this year that while Mr. Affleck was working on various motion pictures, she chose to stay at home for a year to take care their three young children. While Ms. Garner is eager to return to her career, as the lower earning spouse, the court may still award long-term spousal support[i] to Ms. Garner. While Ms. Garner may not necessarily receive spousal support forever, it is still likely that she will receive a large portion of Mr. Affleck’s assets.

If you have any questions about divorce or any other issue, the Certified Family Law Specialists at Lonich & Patton have decades of experience handling complex family law matters. Please contact the Certified Family Law Specialists 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.



[i] Long term spousal support is granted in order to place the supported spouse at or near the “marital standard of living” (the financial standard of living established during the marriage) after the divorce.

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The Upcoming W.N.B.A. Battle: Setting Precedent for Same-Sex Couples with Children

Posted July 1, 2015 in Family Law by Rebecca Sternbach.

W.N.B.A. players Brittney Griner, last season’s defensive player of the year, and Glory Johnson, two-time All-Star, had a controversial relationship leading up to their marriage on May 8, 2015.  Even more provocative are the actions taken by Ms. Griner a month after the couple was married and a day after Glory Johnson announced her pregnancy.

On April 22, 2015, the couple was arrested following a domestic disturbance at their home. As a result of the fight, Ms. Griner received a bite wound on her finger and scrapes on her wrist, and Ms. Johnson received a cut above her lip and a concussion. Ms. Griner pleaded guilty to misdemeanor disorderly conduct, while Ms. Johnson pleaded not guilty and her case was dismissed.

At a time of increased scrutiny of domestic violence and athletes, the league suspended both players for seven out of their thirty-four game season— the longest in league history. According to Laurel J. Richie, president of the W.N.B.A., “The W.N.B.A. takes all acts of violence extremely seriously. It is our strong belief that violence has absolutely no place in society, in sports or in this league. As president, it is my reasonability to protect the league and uphold its values. Our athletes represent the W.N.B.A., and they all must abide by the league’s standards of conduct. In this case, Brittney and Glory failed to do so, and that is unacceptable.”

Despite these troubles, the couple proceeded to marry. However, only 28 days later, Ms. Griner filed for an annulment.  Ms. Griner made the following statement, “I can confirm that today [June 5th] I filed for an annulment. In the week prior to the wedding, I attempted to postpone the wedding several times until I completed counseling, but I still went through with it. I now realize that was a mistake.” In response, Ms. Johnson’s agent, D.J. Fisher, stated that Ms. Johnson “loves Brittney and made a huge sacrifice to carry a child, put her career on hold, invest in their relationship and their future.”

It is anticipated that the couple will be heading for a battle as they have vastly conflicting opinions of Ms. Johnson’s impending motherhood. Ms. Griner claims that she does not even know when Ms. Johnson became pregnant and she has no biological connection to the baby. Ms. Johnson claims that Ms. Griner was a “willing participant, consenting and signing all the necessary documents” for the in vitro fertilization.

The law has been changing in regards to same-sex couples, most recently with the United States Supreme Court finding that the Constitution guarantees a right to same-sex marriage. Courts have been trying to navigate the waters in terms of the rights and privileges of same-sex couples. In recent years, there have also been developments relating to their child support obligations.

Courts have asserted a number of bases for “an obligation on the part of the parent’s former same-sex partner to provide financial support for the child,” including a finding of an obligation based at least in part on a contract or promise. In Karin T. v. Michael T., the parties had two children by means of artificial insemination. Before this procedure, “the partner executed an agreement stating[:] ‘a. That such child or children so produced are his own legitimate child or children and are the heirs of his body, and b. That he hereby completely waives forever any right which he might have to disclaim such child or children as his own.’” Additionally, the parties had lived together in the same household for six years and both contributed to the support of the family and the children.  The court found under these circumstances and the provisions of the agreement between the parties there was an enforceable contract. The court stressed that “the document that was signed by the partner, by which these children were brought into the world, gave rise to a situation that needed to provide these two children with remedies.” To hold otherwise, the court stated, would allow the partner to escape her responsibilities in supporting the children.

As the law continues to shift in regards to same-sex marriages, the very public Griner-Johnson separation will likely bring attention to child support obligations of same-sex partners. If Ms. Griner “fights paying child support, it could set a precedent in the state for same-sex couples.” As Arizona lawyer Claudia D. Work stated, “This is going to come down to whether the court will hold Ms. Griner to contractual promises.”

If you have any questions about same-sex marriage or any other issue, the Certified Family Law Specialists at Lonich & Patton have decades of experience handling complex family law matters. Please contact the Certified Family Law Specialists 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.

Source: Julie A. Nice, Symposium, The Descent of Responsible Procreation: A Genealogy of an Ideology, 45 Loy. L.A. L. Rev. 781, 798 (2012).

Source: Child Support Obligations of Former Same-Sex Partners, 5 A.L.R.6th 303 (Originally published in 2005).

Source: http://www.nytimes.com/2015/05/16/sports/basketball/wnba-suspends-brittney-griner-and-glory-johnson-in-domestic-violence-case.html?_r=0

Source: http://www.huffingtonpost.com/2015/06/05/wnba-brittney-griner-annul-marriage_n_7523708.html

Source: http://www.bostonherald.com/inside_track/celebrity_news/2015/06/wnba_war_the_day_after_glory_johnson_reveals_shes_pregnant

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Celebrity Prenuptial Agreements: What Is Enforceable and What Is Not.

Posted June 26, 2015 in Family Law by Lonich and Patton.

When celebrity couples get married, celebrity news outlets and magazines are always quick to report on the details of the couples’ prenuptial agreements. More often than not, these reports feature prenuptial agreement clauses that are outlandish and extreme. To some, these celebrity prenuptial agreement clauses seem laughable and ridiculous, but for others, they are right on the money and reflect the types of items we desire in our own prenuptial agreements.  Regardless of which camp you belong to and the validity behind these reports, the clauses in celebrity prenuptial agreements do offer some points to think about. For purposes of this blog, the question is not whether the reports on these prenuptial clauses are true, the question here is whether California courts will actually enforce these types of clauses.

Before we dive into specific celebrity prenuptial clauses/provisions, let’s cover some important implications related prenuptial agreements should be covered:

1. California is a “no-fault” divorce state. Many recognize the phrase “no-fault divorce” by its legal version, “irreconcilable differences.”

2. California is a community property state, meaning that spouses share 50/50 interest in property acquired during their marriage.

3. Courts faced with a prenuptial agreement with unenforceable clauses/provisions will either invalidate the entire prenuptial agreement, or will enforce the valid portions and just sever or ignore the unenforceable parts. Couples can prevent the former from occurring by including a “severability clause” or provision in their prenuptial, which provides that the invalidity of one or more provisions shall not invalidate the remaining provisions and allows the remaining provisions to be severed and enforced according to their terms.

4. Despite California being a community property state, premarital agreements may validly preserve the separate property character of premarital assets and characterize income and property acquired after marriage.

5. In California, premarital agreements that include a waiver or limitation of post-dissolution of spousal support are not per se unenforceable, as long as it was “executed by intelligent, well-educated persons, each of whom appears to be self-sufficient in property and earning ability, and both of whom have the advice of counsel regarding their rights and obligations as marital partners at the time they execute the waiver … .”

Now that we have covered some important aspects of California law as it pertains to premarital agreements, let’s look at some of the most intriguing clauses/provisions of celebrity couples’ prenuptial agreements:

  • Justin Timberlake and Jessica Biel: The “Fidelity Clause,” which states that if Justin cheats, Jessica gets a payout of $500,000.

Enforceable?

In California, this provision is unenforceable as contrary to the public policy underlying no-fault dissolution laws to the extent it imposes a penalty on one of the parties for “fault” during marriage.

  • Facebook mogul, Mark Zuckerberg and wife, Priscilla Chan: The clause that requires Mark to totally unplug and spend quality (non-wired) time with Priscilla at least once a week.

Enforceable?

An article in the ABA Journal from June 2013, refers to this as a “Lifestyle Clause.” The article explains that while most of these types of provisions are unenforceable in court, they are still useful because they help couples discuss goals and make them more likely to stick.

  • Catherine Zeta-Jones and Michael Douglas: Provisions provide that Catherine gets $2.8 million for every year they were married. Plus, another $5 million if Michael cheats.

Enforceable?

The first part may be enforceable. The enforceability of the $2.8 million per year of marriage provision depends on how the court construes the payment amount and structure. CA courts have enforced agreements that include a payment of a specified sum to one spouse when the purpose of such payment was to ensure that, if one spouse died or the marriage was dissolved, the other would be no worse off than he/she would have been had he/she remained single (typically the woman).

The amount “per year” language is also indicative of a pre-determined spousal support amount. California does permit couples to set their own spousal support agreements so long as the amount paid is at or above the state guideline.

However, if the court construes the amount to be “promotive of dissolution” then it will not enforce it. The provision at issue is not technically one lump sum payment in the event of dissolution, but rather is a one lump sum with a total contingent on the number years married. Typically, this could be considered “promotive of dissolution” as it offers Catherine a huge sum of money for dissolution, but-for two things-

(1) Catherine is a high-paid Hollywood actress, making this total amount per year less inducing of dissolution, and

(2) Catherine only stands to gain a large sum of money per this provision because the marriage has lasted over a decade, making this provision arguably more promotive of marriage.

As for the $5 million payout if Michael cheats?

Similar to the “fidelity clause” of Justin Timberlake and Jessica Biel, this is unenforceable in California.

  • Khloe Kardashian and Lamar Odom: Provisions state that in the event of dissolution, Khloe is to receive $500,000 for every year they were married, $25,000 in general support, their house, a new luxury vehicle at the end of every lease cycle, $5,000 per month for shopping, $1,000 a month for beauty care, and Lakers tickets for Kardashian’s friends and family.

Enforceable?

While to some readers these provisions may seem exorbitant, these amounts may reflect Ms. Kardashian’s level of lifestyle during the marriage. CA law recognizes premarital agreements where couples reorder property rights to fit their needs and desires, and participate in realistic planning that takes account of the possibility of dissolution, including provisions for spousal support. Thus, Khloe and Lamar were within the law to contract these post-dissolution lifestyle maintenance amounts.

Today’s review of prenuptial agreements was just an exercise. It was by no means a full review of the law on California prenuptial agreements. Further, the celebrity prenuptial agreement clauses discussed today were only used to illustrate the point of enforceability. This blog does not purport to confirm or deny the existence of the above-mentioned clauses.

If you have any questions about premarital agreements, or any other issue, the Certified Family Law Specialists at Lonich & Patton have decades of experience handling complex family law matters. Please contact the Certified Family Law Specialists 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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