Family Law Overview Part II1

FAMILY LAW OVERVIEW PART II

Family Law - Part II LEG400 December 10, 2011

Within this paper an overview of family law will be highlighted. The impact and state

requirements by the Child Support Enforcement and Establishment of Paternity Act of 1974 will be discussed. Child support, guidelines, enforcement, duration, and tax implications will be analyzed. The difference between permanent alimony, lump-sum support, and rehabilitative support in spousal support will be examined. Classification of property, marital property division and valuation, distribution, and tax implications will be highlighted. The significance of Levy v. Louisiana and the legal framework for paternity issues will be discussed. This paper will also describe the pros and cons of artificial insemination from a sperm bank versus a known donor. The goal of the Child Support Enforcement and Establishment of Paternity Act of 1974 is to compel absent parents to become monetarily accountable for their children. Every state is impacted by the passage of the 1974 Act and the establishment of the federal Office of Child Support Enforcement (OCSE). OCSE is the national agency that requires each state to develop IVD agencies within their state to oversea and administer a comprehensive child support program. These state agencies provide assistance in locating absent parents by collaborating with their own state Parent Locator Service Agency or the Federal Parent Locator Service (FPLS) which is operated by OCSE. IV-D agencies are also required to establish and enforce child support awards; periodically review awards; and establish paternity. They must provide assistance regardless if families are receiving public assistance or not. The State IV-D agency resources must be utilized first before federal assistance can be authorized. The FPLS will then utilize an assortment of federal databases to trace the absent parent. Child support guidelines address problems of inadequate and inconsistent awards by computing specific numeric criteria. Guidelines are designed to assist parties, lawyers, and judges in creating more consistent awards of child support but not to order exact amounts in all circumstances. States must elect an approach and decide what income is subject to the support

Family Law Overview Part II3 obligation (Ehrlich, J., 2011, p. 277). Income must be defined and the relevant income base must be determined. A state may elect one out of the three guideline approaches to adopt. They may elect the percentage-of-income; income-shares; or the hybrid Melson formula approach. The benefit of the percentage-of-income approach is its ease of a flat percentage support amount of the noncustodial parent. The disadvantage of its ease is the inequitable results from multiple factors that are not considered. The theory behind the income-shares approach is the assumption that despite of the dissolution of marriage parents should continue to share the financial obligations had the family stayed together. It is criticized for ignoring the increased expenses of the custodial parent that they now have to pay and the non-economic contributions by the custodial parent to benefit the childs(rens) well being. The definition of income almost always includes investment earnings, rents, profits shares, dividends, annuities, self employment, royalties, and governmental benefits, such as social security retirement and unemployment benefits (Ehrlich, J., 2011, p. 278). Imputed or attribute income concepts are recognized in the guidelines. Imputed incomes such as jewelry or antiques are considered imputed assets that do not produce income. Instead it is an attempt to shield assets from consideration in support and forms a benefit. Voluntary unemployment or underemployment will be factored into the support equation and is considered attributed income. Support can be calculated based on gross income, adjusted gross income, or net income. The gross income base approach determines the support amount by the obligor. Income cannot be manipulated and is a simple approach, yet it does measure income accurately. The adjusted gross income base considers tax obligations, non-voluntary payroll deductions before making a support obligation determination. It is believed to be an accurate and fairest approach but does not permit

discretionary deductions. The net income base allows discretionary voluntary deductions in addition to the adjusted gross income. This approach can be manipulated to reflect a reduced income yet it is the most accurate. Child support is enforced at the state and federal levels. Federal law requires that all child support orders must include a wage withholding provision that enables support payments to be withheld by payroll deduction. States are mandated by federal law to file liens against real and personal property in the amount of unpaid support. Liens can arise without a required action by the custodial parent. Support arrears can be reported to credit bureaus by the state IV-D agency after proper notice and opportunity has been given. They can bring about criminal nonsupport or contempt actions. Criminal nonsupport is classified as a misdemeanor while contempt actions can be civil or criminal in nature (Ehrlich, J., 2011, p. 297). In general eighteen is the age of majority regarding support obligations. This age can be terminated before or extended after the age of majority. It can be determined before the age of majority through emancipation, parental death, adoption, or termination of parental rights. It can be extended after the age of majority if the child is still in high school, attending college, or is mentally or physically disabled. There are two basic rules when it comes to tax implications regarding child support awards. The first rule is that child support payments are not includible income to the recipient (Ehrlich, J., 2011, p. 302). Such payments are a tax-neutral event. The second rule entitles the custodial parent to claim the dependents for tax purposes. Spousal or maintenance support is traditionally referred to as alimony. Financial need, earning potential, age, duration of the marriage, physical and mental health, income and financial resources, the marital standard of living, and contributions to the marriage are factors judges consider when deciding alimony payments. Marital fault or wrong doings are factors that are

Family Law Overview Part II5 considered and balanced against the other factors. Numeric criteria and guidelines take the guesswork out and allow parties to negotiate their differences based on the understanding of what the courts are likely to do (Ehrlich, J., 2011, p. 329). Another approach courts consider is the unspoken acknowledgment of entitlement because it is earned and the need in the ALIs Principles of the Law of Family Dissolution is obvious. There are three approaches to structuring spousal support. They are permanent alimony, lump-sum support, and rehabilitative support. Permanent alimony provides monetary support to the spouse in the economically weaker position that is payable on an ongoing regular basis. It is not subject to duration limits but is subject to termination based on a change in circumstances. Some of the changes are the remarriage of the receiver, cohabitation, or the death of the obligator. Lump-sum support is also referred to as alimony in gross which involves the payment of a definite sum. It is either paid in a single payment or in periodic installments and is non-modifiable based on a change of circumstances. Rehabilitative support is also referred to as transitional support that allows time-limited support for the recipient spouse to grow and be financially self-sufficient. Rehabilitative support awards can be overturned and courts have become wary in long-term marriages. Spousal awards may include a wage withholding provision that enables support payments to be withheld by payroll deduction. Contempt actions are the primary enforcement mechanism and the actions can be civil or criminal in nature. They can be enforced across state lines under the Uniform Interstate Family Support Act (UIFSA). The basic rule of includibility/deductibility is that the payor is entitled to a deduction from gross income. For payments to qualify as alimony, payments must be in cash, court ordered, and the parties must not be cohabitating. The property distribution process is broken down by defining property, classification,

valuation, and distribution. Property can be tangible or intangible. Tangible property can be seen, touched, and is transferable such as a house, car, and furniture. Intangible may not be seen, touched, transferred, or difficult to value such as a professional degree, pensions, or the goodwill of a business. Classification of property is crucial because it determines the pool of assets that is subject to division and influence the approach that the judge and attorneys distribute the assets. Assets can easily be presumed as marital property and the burden of proof is placed on the party who claims it is separate property. Marital property can be distinguished by determining the time of acquisition by either the inception of title rule or the source of funds rule. It can also be distinguished by property acquired in contemplation of marriage; during cohabitation; or at the cutoff point at the date of legal separation, or initiation of a permanent separation or dissolution. The value and nature of the assets will influence the allocation of marital assets. The fair market value approach is the common approach that helps to establish the value of the marital assets. Property is divided after the property has been classified. There are two standard divisions; equal or equitable. The equal distribution standard divides marital property equally between the spouses. The equitable distribution divides the property in a manner that is described as fair, just, or equitable (Ehrlich, J., 2011, p. 376). Property transfers during or after a marriage are not a taxable event if they are incidental to a divorce. Paternity is a precondition for establishing official rights, support, and visitation rights with non-marital children. It can be determined by adjudication and acknowledgment. Adjudication is a paternity proceeding that attempts to identify the father through DNA testing. Voluntary acknowledgment is a simple procedure that enables the father to complete and sign a sworn statement identifying himself as the father. Children who are born out of wedlock must have their legal paternity established in order to preserve their benefit rights such as child support payments,

Family Law Overview Part II7 social security payments, insurance benefits, inheritances, and the fathers medical records. The significance of Levy v. Louisiana was the state of Louisianas violation of the equal protection clause. The state denied a childs right to recover after the death of his mother. The Supreme Court reversed the low courts decision based on discrimination against illegitimate children; circumstances that children have no control over. Paternity was not an issue and there was a mother-child bond. The Supreme Court recognized that the parent-child bond was not dependant on the marital status of the parents and the child suffered wrong and was entitled to his right to recovery. Some of the positive aspects of using a sperm bank for artificial insemination are: they require donors to waiver all parental rights, they test semen for diseases, and collect health and genetic information from their donors. However, sperm banks can be pricey and not covered by insurance. Other negative aspects of a sperm bank are not knowing what the donor looks like, and frozen semen is not as vigorous as fresh sperm; which may delay successful impregnation. There are very positive aspects of using a known donor for artificial insemination. With a known donor health, family history, physical and mental health, characteristics and personality is known. They may wish to be involved in the childs life and it is more cost effective. The negative aspect is the possibility of the donors right to sue for visitation or custody of the child and issues regarding parenting may occur. The goal of the Child Support Enforcement and Establishment of Paternity Act of 1974 is to compel absent parents to become monetarily accountable for their children. Child support guidelines are calculated based on gross income, adjusted gross income, or net income while alimony support is calculated by the financial need and unspoken acknowledgment of entitlement. They both can bring about criminal nonsupport or contempt actions. Property must be defined,

classified, valued, before it can be distributed following dissolution. Marital property can be distinguished by assets acquired in contemplation of marriage; during cohabitation; or at the cutoff point at the date of legal separation, or initiation of a permanent separation or dissolution. Establishing legal paternity is vital to a child in order to preserve their benefit rights to child support payments, social security payments, insurance benefits, inheritances, and the fathers medical records. There are positive and negative aspects of using a known or unknown sperm donor. One must decide the possibility of a future legal conflict or the donors wavier of all parental rights.

Family Law Overview Part II9

REFERENCES: Ehrlich, J. (2011) Family Law for Paralegals, 5th Ed., New York, NY, Aspen Publishers Introduction to the Emerging Issues in Paternity Establishment Project. (n/a). Retrieved on 12/5/2011 from http://aspe.hhs.gov/hsp/07/paternity/ch1.htm Pros and Cons of Using Sperm Bank. (n/a). Retrieved on 12/5/2011 from http://www.mamashealth.com/artificial/spermbank.asp