Family Law Blog

The Importance of Expert Tax Advice in Divorce

2012-05-09T12:16:47Z

Most people who get divorced do so without the benefit of a tax expert.

They get tax information and/or advice from their divorce attorney. However, as this Forbes article points out, divorce lawyers are not the best tax advisors.

In fact, most divorce lawyers go out of their way to disclaim any liability for tax advice in separation agreements and fee agreements.

So, if you are getting a divorce, and you can’t rely on a divorce attorney for expert tax advice, what do you do?

Collaborative attorneys figured this out a long time ago. In a collaborative divorce case, expert tax advice comes from the financial neutral.

The financial neutral provides unbiased neutral information and advice about tax issues that relate to divorce. That way, both parties get the same information at the same time. And, they are not getting in unnecessary conflicts due to differing tax advice from either their attorneys or their own individual tax advisors.

And here’s the best part about financial neutrals in collaborative divorces: A good piece of tax advice can save tens of thousands, if not more, for the couple. One small piece of information can have a huge impact on the financial futures of both clients.

On the other hand, the absence of that information can have a huge negative impact on both clients.

Tax issues are another big reason to take advantage of the collaborative process and the financial neutrals that help clients in the process.

5 Tips for Protecting Your Kids in Divorce

2012-05-02T12:31:35Z

The vast majority of my clients with children share one huge concern: My divorce will ruin my children’s chances of being happily married.

Fortunately, the research does not support the idea that divorce, by itself, negatively impacts the odds of a child being happily married.

The research does show that the most important factor for kids of divorce is not that their parents were divorced, but the level of ongoing conflict between the parents.

So, if you want to protect your child from the negative effects of divorce, follow these guidelines:

De-escalate conflict between you and your spouse whenever possible;
Address conflict as quickly as possible so that mole hills do not become mountains;
Choose a divorce process that promotes peace and problem-solving, like collaborative divorce or interest based mediation;
Choose lawyers that promote problem solving and non-combative tactics;
Treat your spouse as the parent of your children, and not as your enemy.

These steps will not make your divorce easy for you or your child. But, they will help insulate your child from the lasting negative impacts of divorce.

Amendment One Update

2012-04-26T12:25:36Z

As an update, I have pasted below a blog post from the Greensboro News & Record from a group of Family Law Professors from the various law schools in North Carolina:

As usual, Doug, your comments are thoughtful. But family law professors from every law school in the state – including Campbell – agree with the UNC white paper on the dangers that Amendment One poses to domestic violence protection for unmarried couples. The Campbell white paper ignores a critical distinction between the Ohio amendment and Amendment One. The Ohio Supreme Court eventually concluded that the Ohio amendment did not require denying domestic violence protection to a victim unmarried to her abuser. But the Ohio amendment merely prohibited THE STATE from CREATING a legal status for unmarried relationships. Amendment One is much more far-reaching. Amendment One declares that the only “domestic legal union” that the state shall find “valid” or “recognize” is a marriage. In other words, all other “domestic unions” are “illegal,” or “not lawful.” Surely, lawyers who represent batterers who live with victims to whom they are not married will argue for this interpretation. I certainly hope that ALL the district court judges in the state who hear this argument will reject it, which seems a vain hope indeed. And I hope that when after some district court judges accept the argument, the appellate courts of this state will eventually reject it. But how much domestic violence are we willing to tolerate until that happens – assuming the appellate courts reject the argument? There is no reason to tolerate any. Marriages in North Carolina have been limited to a man and a woman for 150 years. Fifteen years ago, we passed yet another marriage statute, making clear that if same sex couples marry in a state that permits their marriages and then move to North Carolina, North Carolina will not honor their marriages. If Amendment One is defeated, which I fervently hope it will be, nothing changes. Marriages in North Carolina will continue to require the “consent of a man and a woman,” as they have for 150 years. If Amendment One passes, things change: unmarried families – some of whom are prohibited by the state from marrying – are a lot less safe. That’s why family law professors from every law school in the state – including Campbell – have joined this statement:

We are family law professors who teach at every law school in the state of North Carolina. We speak on behalf of ourselves, rather than our institutions. Based on our professional expertise, the language of the proposed North Carolina amendment is vague and untested, and threatens harms to a broad range of North Carolina families. The amendment is phrased more broadly than most similar amendments in other states, and would therefore likely be construed by courts more broadly than in other states. The amendment would certainly ban same-sex marriages, civil unions, and domestic partnerships, and would very likely ban the domestic partnership health insurance benefits that a number of municipalities and counties currently offer to same- and opposite-sex unmarried couples. It also threatens a range of other protections for unmarried partners and their children, including domestic violence protections and child custody law. We are aware that some law professors at Campbell Law School think otherwise. In our view, this disagreement simply underscores the fact that Amendment One is vaguely worded and that it is not possible to know how broadly it will eventually be construed.

April 20, 2012

Jean Cary
Professor of Law
Campbell Law School

Scott Sigman
Associate Professor
Charlotte School of Law

Katharine Bartlett
A. Kenneth Pye Professor of Law

Kathryn Bradley
Professor of the Practice of Law
Director of Legal Ethics

Carolyn McAllaster
Clinical Professor of Law
Director, Duke Legal Project
Duke Law School

Sonya Garza
Assistant Professor
Elon School of Law

Kia H. Vernon
Assistant Professor of Law
North Carolina Central School of Law

Maxine Eichner
Reef C. Ivey II Professor of Law

Holning S. Lau
Associate Professor
UNC School of Law

Jennifer Collins
Professor of Law

Suzanne Reynolds
Executive Associate Dean and Professor of Law
Wake Forest School of Law

Understanding Amendment One in North Carolina

2012-04-25T12:29:33Z

On May 8^th, North Carolina voters (that is probably you) will go to the polls (hopefully) to vote on Amendment One. Amendment One would theoretically change the North Carolina Constitution to ban same sex marriage.

The actual wording of the Amendment is as follows:

“Marriage between a man and a woman is the only domestic legal union that shall be valid or recognized in this state."

The wording is a bit confusing and a little vague legally. That has contributed to great confusion among people I have talked to as to what they would actually be voting for or against.

In an effort to help educate people on the Amendment, I have included below the Executive Summary of an article entitled “Potential Legal Impact of the Proposed Same-Sex Marriage Amendment to the North Carolina Constitution” (footnotes omitted). You can read the whole article here. This article was written by law professors at the UNC School of Law (my alma mater in the interest of full disclosure).

One thing to understand initially is that North Carolina does not recognize same sex marriage. Same sex couples cannot get married or divorced in North Carolina under current law. Perhaps that is one reason for the confusion.

My hope is that you will feel a little less confused about the Amendment and it’s potential impact before you vote on May 8^th (I strongly encourage everyone to vote!). Also, this is by no means the only view of the Amendment. But, it is the most unbiased and academic one that I could find that was not from a political based group.

EXECUTIVE SUMMARY

The proposed Amendment would not simply place this state’s current statutory prohibition of same-sex marriage into the North Carolina Constitution, as its sponsors seek.

Instead, the proposed language is problematically vague, untested, and threatens to upend years of settled law. In prohibiting state recognition or validation of “domestic legal unions,” the proposed Senate bill would introduce into the Constitution a phrase that has never been used in any prior statutory law in North Carolina, never been interpreted by its courts, and never been interpreted by courts in any other state. Taken as a whole, the bill’s language is sufficiently vague, and its

scope significantly unclear, that it would enmesh our courts in years of litigation to untangle its appropriate meaning. Moreover the eventual result of judicial interpretation of the Amendment would be uncertain. It could, however, be interpreted to upend completely the very minimal legal rights, obligations, and protections now available to unmarried couples, whether same-sex or opposite-sex.

The Amendment could be construed by courts to:

 Prevent the courts from enforcing private agreements between unmarried couples, therefore encouraging the wealthier members of couples to avoid marriage so that they will not be subject to obligations to transfer property;

 Interfere with child custody and visitation rights that seek to protect the best interests of children;

 Invalidate protections against domestic violence to members of unmarried couples;

 Interfere with end-of-life arrangements, such as wills, trusts and medical powers of attorney, executed by unmarried couples;

 Invalidate domestic partnership benefits currently offered to same-sex and opposite-sex couples by local municipalities;

 Prevent courts from enforcing private employers’ agreements to provide benefits such as health insurance to employees’ domestic partners.

The vague and untested language of the Amendment would therefore cause real harm to a broad range of North Carolina citizens. The proposed Amendment could be interpreted to strip the increasing number of unmarried heterosexual couples of their ability to order their relationships and property through contract, deny legal protection against domestic violence, and cut them off from custody of their children. By the same token, committed same-sex couples in North Carolina, who are already precluded from marrying, would also no longer have access to these minimal protections. Even if courts did not ultimately adopt a broad interpretation of the Amendment’s language, these couples’ rights would be uncertain during the inevitably long period of time that it took for these issues to work their way through the courts. The Amendment’s broad sweep would also interfere with municipalities’ freedom to determine domestic partnership benefits for their own employees. It could also undermine private employers’ efforts to attract top employees to North Carolina by providing employee benefits to domestic partners, as the courts and public medical facilities may not be permitted to recognize those benefits. Finally, the breadth of the Amendment’s language and its untested terminology will significantly tax the resources of North Carolina courts, which will be charged with interpreting its scope.

When is Divorce the Right Decision?

2012-04-19T01:49:09Z

As a collaborative divorce lawyer, I generally extoll the virtues of avoiding divorce. But, a film documentary has reminded me that to everything there is indeed a season, and a time to every purpose under Heaven.

51 Birch Street tells a powerful story. It is the story of a husband and wife that stayed married for 53 years, raised three kids, and seemed happy, but ultimately may have benefited from a divorce.

After her death, Filmmaker Doug Block discovered that his mother lived most of her marriage resenting his father, and may well have preferred to have not been married at all.

Further, shortly after his wife of 53 years died, Block’s father married his long lost former secretary.

That left Block to wonder whether his father had been in love with his secretary for decades, and whether his mother knew it.

The film raises many questions. One that sticks with me is when is it better to be divorced than to live life in misery, or pining for the person you truly love?

I watch many of my clients struggle with these questions as they go through the divorce process. Unfortunately, I can’t answer that question for them. But, 51 Birch Street will serve as a reminder to me that there may be many right answers to these questions.

Lessons from Christie Brinkley's Divorce

2012-03-28T13:44:48Z

As a collaborative divorce attorney and mediator, I spend a lot of time explaining the potential negative effects of an adversarial divorce.

But, nothing exemplifies those negative effects as well as the story of Christie Brinkley and her husband.

They have been divorced since 2008, but they are still consumed by the anger and hard feelings generated in the divorce.

Instead of moving on and finding happiness, they are emotionally chained to events that happened four years ago. And imagine what their kids’ lives have been like since!

Unfortunately, this couple’s experience is not unique. Less famous stories like theirs play out every day for many couples who choose to handle their divorce in a “win/lose”, “me versus you”, “attack mode” process like going to court or traditional negotiation process.

One of the keys to collaborative divorce is “de-escalation”, or the lowering of tensions and emotions during the negotiation process. This helps couples think clearly and productively. And, it models the blue print for a healthy future co-parenting relationship.

I can’t help but wonder what would have been possible for Christie Brinkley, her husband and her kids if they had chosen the collaborative divorce process. I suspect that her Today interview would have been about her career, as intended, instead of her divorce.

Unpredictable Alimony Awards

2012-02-23T16:14:24Z

Alimony has always been of the most unpredictable issues for spouses and attorneys. The chair of the Family Law Section of the American Bar Association indicated in a recent article “Divorce law is one of the most discretion filled areas of the law…”

In many states, including North Carolina, judges have wide discretion in awarding alimony, both in amount and duration. Compare this to child support awards that are largely determined by a formula in North Carolina.

A recent article in the February 2012 issue of the American Bar Association’s Journal highlights national efforts to create more predictable alimony awards.

The article states, “Many agree that divorcing spouses deserve more predictable outcomes” and that the current alimony process in court “has been attacked as antiquated, unbalanced and unfair.”

Here are some of the proposals and efforts that have been undertaken by other states or legal groups according to the article:

In 2011 Massachusetts passed the Alimony Reform Act. The new law created a formula for calculating alimony awards. The law also ends alimony when the paying party reaches retirement. Further there is now a 12-year limit on alimony payments in that state.
Oklahoma is trying to reduce a party’s ability to get military retirement pay as alimony.
Rhode Island generally limits alimony payments to five years.
In 2004, a Florida lobbying group tried to end alimony in that state forever.
The American Academy of Matrimonial lawyers suggests the following formula:
- 30% of the paying party’s gross income minus 20% of the receiving party’s gross income
- The receiving party should not receive more than 40% of the couples’ total combined gross income
- For example: If one spouse makes $100,000 and the other makes $50,000, the numbers look like this: $100,000 x 30% = $30,0000; $30,000 minus $50,000 x 20% ($10,000) = $20,000. So, the receiving spouse would get $20,000 a year in alimony.
- And, the duration would be calculated by multiplying the length of the marriage by a fraction.

These efforts clearly indicate that there is a big problem for divorcing couples using the courts to determine alimony awards.

Their outcomes are highly discretionary and therefore very difficult to predict. Of course, couples always have the option to opt out of the unpredictable alimony system currently in place. They are free to resolve alimony issues in whatever way they choose in processes such as collaborative divorce and mediation.

As the current alimony system comes under further attack, wise couples may elect to do just that.

New Protections Against False Paternity and Child Support Claims in North Carolina

2012-02-13T14:00:50Z

As of January 1 of this year, men in North Carolina have some new protections from false paternity claims.

Since the beginning of this year, new laws have been in effect that provide new procedures for men who want to dispute that they are the father of a child.

The legislature amended or created three laws that give fathers a clear-cut process for asking a court to officially declare that they are not the father of a child.

Specifically the new laws provide a way to ask a court to overturn a paternity order, an affidavit of parentage or a child support order if the father believes he is not the father of the child.

However, the alleged father has only one year from the time he knew or had reason to know that he was not the father to challenge paternity under these new laws.

The new laws for overturning paternity orders or affidavits of parentage require two showings: First, a father must prove that the paternity order or affidavit was created by “fraud, duress, mutual mistake, or excusable neglect.” If a father files a motion alleging sufficient facts, then the court has to order genetic testing of the mother, child and alleged father to determine whether the alleged father is the actual father.

If the alleged father can prove fraud, duress, mutual mistake or excusable neglect AND the genetic tests show that he is not the father, then the court can set aside the paternity order or affidavit.

Further, a new statute allows men to ask a court to let them out of child support if they can prove by clear and convincing evidence that:

1. He has not acknowledged paternity of the child, or that he acknowledged paternity without knowing that he was not the actual father (“acknowledgement” includes public acknowledgement and supporting the child while married to the mother, sworn statements and affidavits claiming to be the father, consent orders, voluntary child support agreements, or any other legal agreement to support the child, and admissions of paternity in open court); and

2. He had not adopted the child; and

3. He has not legitimated the child; and

4. He is not the child’s legal father under N.C.G.S. 49A-1; and

5. He has not done anything to prevent that actual father from asserting his parental rights to the child; and

6. Genetic testing shows that he is not the actual father.

If the man can show all of the above facts (no juries are used in these cases), then the court is required to cancel the child support obligation. However, the man generally does not get any money back that has already been paid. (The man can get any support that he has paid from the filing of this motion until the cancellation of the support obligation if he can prove that the mother conned him into believing he was the father). The man cannot get any money back if he has been making payments to anyone other than the mother. The court also has to order that the birth certificate be changed to remove the man’s name.

Men and their attorneys have long cried out for a better way to challenge false paternity claims. They now have relatively clear processes for defending themselves from these claims.

Why You May Want a Pre-Nup

2012-02-06T18:28:03Z

Pre-nuptial (also “pre-marital”) agreements are what everybody calls “pre-nups”.

Pre-nups have a mixed reputation in our society. Some people see them as smart protection from gold digging prospective spouses. Others seem them as cold-hearted unromantic acts that stand in stark contrast to what you’re supposed to be feeling before you get married.

But, most people don’t know about another more positive use of a pre-nup: An antidote to an ugly divorce™.

You and your future spouse can create a pre-nup in which you agree to try to avoid an ugly divorce if the marriage doesn’t last forever.

You can sign a pre-nup in which you both agree to attempt to resolve any future divorce, custody, child support, alimony, and property division issues through collaborative divorce or mediation before you go to court.

This kind of pre-nup doesn’t determine the terms your ultimate resolution. You don't have to figure it all out ahead of time. It simply determines the first process that you’ll use to figure out the details if things don’t work out.

A pre-nup cannot prevent a court from ordering financial support to a child. And, in North Carolina, a court always has the right to enter an order for the custody and support of a child if and when the court finds it necessary.

However, North Carolina courts will enforce pre-nups under current law.

There are many potential benefits of a pre-nup that requires a couple to attempt a collaborative divorce or mediation before going to divorce court. What are they?

EMOTIONAL BENEFITS: From an emotional standpoint, you would be committing to each other that even in the unfortunate event that things don’t work out, you do not want to put each other through the ringer in a divorce.

Some people have are afraid to get married. Many of those people have a fear of divorce, instead of a fear of marriage. And that fear is usually based on their understanding of what a bad divorce looks like. Maybe they have been a party to a bad divorce as either a spouse or child.

A pre-nup that requires you to first try to handle a subsequent potential divorce with dignity, grace and respect may take a lot of the fear of divorce away. And, that, in turn, may take some of the fear of marriage away. And, less fear seems like a very good thing for the health of any marriage.

FINANCIAL BENEFITS: Financially, this kind of pre-nup commits you to processes that seek to preserve your financial well being in the divorce process. Both collaborative divorce and mediation are based on the idea that people don’t want to spend their life’s savings on divorce attorneys and court battles.

LEGAL BENEFITS: Legally, collaborative divorce and mediation open an almost limitless range of options for resolving divorce issues that are frequently not available in court. These options often serve families far better than the limited options that a judge faces.

Nobody wants to think about divorce when they are thinking about getting married. But, we do it anyway. Rather than letting it be a scary idea that sits in the back of your mind, you can plan for that “what-if” before you get married.

After all, agreeing in a pre-nup not to go to war in the event of a future divorce is an act of love in itself. And, it may be a good step towards ensuring that your pre-nup never matters.

Update: Family Financial Settlement Mediation Certification

2012-01-10T21:45:02Z

I am happy to announce that I have been certified to mediate court-ordered Family Financial cases by the North Carolina Dispute Resolution Commission (NCDRC).

While I have mediated family financial issues by for families that selected me in the past, I am now certified for court appointed mediations in the family law field.

This means that judges in Wake and surrounding counties can appoint me to mediate equitable distribution, alimony and other financial issues in family law matters.

I look forward to continuing to help families resolve their financial problems as a NCDRC Certified Family Financial Settlement mediator.