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Family Law Q+A

Welcome to Family Law Q+A, a legal blog providing answers to your Colorado family law questions.  This blog is meant to entertain and generally inform readers about interesting issues in Colorado family law.

 

Nothing in these blog posts represents legal advice or creates an attorney-client relationship.  The views here do not represent the formal legal opinions of Carrigan Law, LLC.

 

Furthermore, since the law is constantly changing, any particular discussion of a legal issue may presently be outdated or erroneous.  Readers are directed to contact a Colorado family law attorney regarding the specifics of any case.

 

Email your questions to office@carriganlawllc.com and include “Family Law Q+A” in the subject!

Extraordinary expenses and child support

QUESTION

What is included as “extraordinary expense” in child support calculations?

ANSWER

Under the child support statute, basic expenses for a child are built into the guidelines which are purposed to provide a child support amount “reasonable or necessary for the child’s support  . . . under the circumstances.”[1]  However, the guideline amount is based on the parties’ incomes, and not directly on actual expenses related to a child.  When both parties provide physical care, the statute “presumes that certain basic expenses for the children will be duplicated.”[2]  Thus, basic needs for the children (shoes, clothes, bed, food, etc.) are included in the physical care and custody of the child, for purposes of child support calculations or adjustments.

Expenses that are not basic are “extraordinary.”  What kinds of expenses fall under the category of extraordinary expenses?  The child support guidelines provide that “reasonable and necessary” educational and travel expenses incurred on behalf of a child may be included as adjustments in the calculation of child support.[3]  These items can be included by agreement of the parties or by court order, and are to be calculated in proportion to the parties’ income.  While the statute contemplates adding these amounts to the monthly child support obligation, it is generally more practical to handle apportionment of these expenses as they are incurred, unless the expenses are incurred on a regular basis.  Of course, parties may always agree to divide and/or include other kinds of “extraordinary” expenses not contemplated by the statute, as long as the court is not deprived of its ability to ensure that the division of support for the child is not contrary to Colorado law.  If ordered by a court (i.e., pursuant to a contested hearing), the addition of any extraordinary expenses to a parent’s basic child support obligation must be supported by the court’s findings and evidence in the record.   IRM Finer, 920 P.2d 325 (Colo.App.1996).[4]

 Educational expenses and extracurricular activities

It is the “educational” expenses category that gives rise to the most flexibility, and thus, dispute.  It is noteworthy that the current statute is focused on private or special school costs, as opposed to costs related to public education.  The Court of Appeals has ruled that inclusion of expenses for extracurricular athletic lessons (e.g., ice skating) for a child “participating in an extended and ongoing competitive program” is warranted as a reasonable and necessary educational expense.  IRM Laughlin, 932 P.2d 858 (Colo. App. 1997).  The Laughlin Court noted that such determinations must be made on a case-by-case basis after considering factors “related to a child’s standard of living and additional needs . . . include[ing] recreational costs.”  Id.; see also IRM West, 94 P.3d 1248 (Colo. App. 2004) (“ . . . particular needs and pre dissolution standard of living are among the factors to be considered by the court”).   Thus, fees associated with athletic activities may qualify as educational expenses.

Fees associated with athletic activities may alternatively provide a basis for deviation from the presumed amount of support.  See IRM Ansay, 839 P.2d 527 (Colo. App. 1992).  However, the Ansay opinion goes against the automatic inclusion of extracurricular activities such as cheerleading, driver’s education, sports, and debate, under the rubric of “educational” expenses under an older version of the child support statute.  Id.

A more difficult question is raised by the issue of costs of public full-day kindergarten.  Public school tuition is not contemplated by the child support statute.  Most courts would probably view this cost as child care, much like after-school care.

Travel expenses

An extraordinary expense adjustment to the child support worksheet may be made for “[a]ny expenses for transportation of the child . . . between the homes of the parents.”  C.R.S. § 14-10-115 (11)(a)(2).  This is typically for interstate travel costs but may also include local transportation expenses such as gas.  See In re L.F., 56 P.3d 1249 (Colo. App. 2002) (providing for reimbursement of mileage but not compensation for driving time).  It is appropriate to include transportation expenses in the child support calculation even before those expenses are actually known.  In re Marriage of Andersen, 895 P.2d 1161 (Colo. App. 1995).

A court might even extend the statutory language to cover expenses to transport a child to school, under certain circumstances, if this represents the parenting exchange location (instead of the parent’s homes).  Or, transportation costs to and from school could be allocated under the child support guidelines as a “reasonable and necessary cost” of a child attending school.  See In re Marriage of Wells, 252 P.3d 1212 (Colo. App. 2011) (trial court did not abuse its discretion by allocating costs for a child’s car as a reasonable and necessary cost of attending school).  However, expenses such as the addition of a child to an automobile insurance policy has been held to be not an “extraordinary expense.”  In re Long, 921 P.2d 67 (Colo. App. 1996).

 

Adding to the confusion about what expenses can be included in any category, the Colorado Court of Appeals has historically ruled that extraordinary expenses need not be “absolutely necessary,” but only “reasonably necessary.”  IRM Elmer, 936 P.2d 617 (Colo. App. 1997).

Litigating reasonability is sometimes reasonable, but usually not as reasonable as working it out privately.  Judges are quick to chastise parents who spend considerable sums of money fighting over how to calculate child support, when the differences of opinion amount to very little in terms of the ultimate support amount changing hands each month.  Parents are wise to remember that even if the money is flowing from one parent to the other, leading payors to sometimes feel like they are wrongly being ordered to give money to their estranged partner, the child support laws are designed to provide for the needs of the children.

 

“Family Law Q+A” is meant to entertain and generally inform readers about interesting issues in Colorado family law.  Nothing in this blog post represents legal advice or creates an attorney-client relationship.  The views here do not represent the formal legal opinions of Carrigan Law, LLC.  Furthermore, the law is constantly changing, so any particular discussion of a legal issue may presently be outdated or erroneous.  Readers are directed to contact a Colorado family law attorney regarding the specifics of any case.

 

[1] C.R.S. § 14-10-115(2).  Also see Wright v. Wright, 182 Colo. 425, 514 P.2d 73 (1973); In re Van Inwegen, 757 P.2d 1118 (Colo. App. 1988) for the proposition that the “needs of the children” are of paramount importance in determining child support obligations.

[2] C.R.S. § 14-10-1158(b)

[3] C.R.S. § 14-10-115(11)(a) (providing for “[a]ny expenses for attending any special or private elementary or secondary schools to meet the particular educational needs of the child” and “[a]ny expenses for transportation of the child, or the child and an accompanying parent if the child is less than twelve years of age, between the homes of the parents”).

[4]  If the court’s findings were prepared by the attorney for the successful litigant, the appellate court will “scrutinize them more critically and give them less weight than if they were the work product of the judge himself, or, at least bear evidence that he has given them careful study and revision.” Uptime Corp. v. Colo. Research Corp., 420 P.2d 232, 235 (Colo. 1966).

Collaborative Law and Civil Unions

web-cover-125x145Carrigan Law, LLC is a proud member of Out Front Colorado’s legal directory.  Last month, associate John C. Hoelle was the contributor there of the following brief article on the benefits of “collaborative law,” which is applicable to LGBT or straight couples.

 

 

 

Collaborative Law and Civil Unions

 

Now that LGBT individuals in Colorado may enter into (and dissolve) civil unions, one choice among many is whether to use lawyers or other professionals to assist with certain aspects of the process.

 

For example, no lawyers are necessary to help cut the cake at the ceremony, but legal advice may be particularly important for same-sex couples entering into a legal relationship with each other that has complex and shifting ramifications under federal and state law.  A “prenuptial agreement” can lay out certain rights and shared understandings between the individuals, during the relationship and upon any subsequent dissolution (divorce).  If the couple ultimately decides to dissolve their civil union, lawyers and other qualified people may need to help the couple understand their legal and financial obligations to each other, as well as potentially navigate the territory of “co-parenting.”

 

The Benefits of Collaborative Law

 

At either the beginning or end of a relationship, there is a growing trend for intimate partners to utilize practitioners trained in “Collaborative Law.”  This formal process is designed to avoid the otherwise adversarial nature of resolving a dispute at the end of relationship or arriving at an agreement at the beginning.  Each party has the advice of counsel as to his or her legal position, and win-win outcomes are negotiated using good-faith, respectful, transparent, “needs-based” techniques at settlement meetings involving both clients and both lawyers.  In addition to the attorneys, other neutral experts are often called in to facilitate, such as a mediator, accountant, mental health consultant, property appraiser, and/or child expert.

 

In the prenuptial context, the process can provide each person with confidence because someone is looking out for his or her legal rights, while focus remains firmly on reaching outcomes that feel right to both parties together.  The same is true in the divorce context, and in addition, if either client threatens to take the dispute to a judge, the collaborative lawyers are disqualified from further participation.  The disqualification agreement is a strong incentive on the part of both clients and lawyers to make the process work.

 

In divorce cases where the parties are prepared to work together, the collaborative process is often quicker, less costly, more creative, more individualized, less stressful, and more satisfying in its results than what occurs in most conventional settlement negotiations.  Perhaps most importantly, particularly for dissolution cases involving children, the collaborative process can provide an education for parents in how to resolve future conflicts.  For those parties who want to keep conflict low for the good of the children, and so that they can sit in the same room at their children’s graduation or civil union (nay, wedding!) ceremony, going through a collaborative divorce is basic training in avoiding an acrimonious and possibly litigious future.  And that’s healthy and financially wise for everyone involved.

 

John C. Hoelle is trained in the collaborative process.  Get more information about collaborative law at http://www.boulderlawyerdivorce.com/resourcepage/faq/collaborative_law/ and find other collaborative lawyers in Colorado at http://www.coloradocollaborativedivorceprofessionals.com

 

(Digital version of Out Front’s January 1, 2014 issue available here.)

Polyamory and Family Law

Courtesy of the New York Post

Courtesy of the New York Post

Alternative relationships and various forms of non-monogamy are on the rise.[1]  The population of people practicing these relationship forms need competent legal services related to their families.  In order to serve this population, in the fall of 2012 Carrigan Law, LLC put together an informational slideshow and presentation regarding how family law intersects with one form of non-monogamy: “polyamory.”

Interested parties may view or download a PDF of the slideshow below.

Polyamory and Family Law

In the spring of 2014,  Associate Attorney John Hoelle and Alexis Neely of the Family Wealth Planning Institute guided Rocky Mountain Poly Living conference participants in thinking about how to structure their legal and financial affairs within a poly context:



[1] Tricia Romano, 3 no longer a crowd as open relationships see a boom, New York Post (Oct. 2, 2013), http://nypost.com/2013/10/02/polyamorous-relationships-may-be-the-new-monogamous-marriages/

 

Employment or disability settlements – marital or non-marital?

QUESTIONMoney_Cash5_by_2bgr8STOCK

Are employment or disability settlements occurring during the marriage marital property?

ANSWER

Probably not, to the extent the settlement covers post-divorce loss of earnings. However, there may be arguments if there is a lump sum settlement awarded during the marriage.

Generally, an ex-spouse’s earnings after divorce are not marital property, and benefits compensating for loss of those earnings are not subject to division. This theory relies on a case concerning a workers’ comp permanent disability award, in which the Colorado Court of Appeals ruled that since such an award compensates for future loss of earning capacity, a husband’s pending claim for permanent disability benefits is marital property only to the extent it compensates for lost marital wages or for medical care and other related expenses incurred during the marriage. Other cases concerning workers’ comp or disability benefits have followed suit, using the “analytical method” to separate out what represents marital income and what is future income.

By way of analogy, to the extent an employment dispute settlement package compensates for post-marital lost wages, such settlement is not subject to division even if the settlement itself occurred during the marriage.

However, if a settlement is pending or awarded during the marriage, it could be considered marital income or a marital asset. For example, if a spouse has an unliquidated workers’ compensation claim pending on the date of dissolution, The Court of Appeals has ruled that a trial court may reserve jurisdiction to apportion the marital interest “upon receipt of the award.”

CONCLUSION

Under current case law, a final or pending employment settlement, similar to a workers’ comp award that is pending or has been issued, should be viewed under the “analytical approach” that allocates any proceeds meant to compensate for future lost earnings to the earning spouse, and thus allocate the settlement to the employee. It should be noted, of course, that the earner’s future wage replacement could be considered by a court in determining his ability to pay maintenance and/or child support.

 

“Family Law Q+A” is meant to entertain and generally inform readers about interesting issues in Colorado family law.  Nothing in this blog post represents legal advice or creates an attorney-client relationship.  The views here do not represent the formal legal opinions of Carrigan Law, LLC.  Furthermore, the law is constantly changing, so any particular discussion of a legal issue may presently be outdated or erroneous.  Readers are directed to contact a Colorado family law attorney regarding the specifics of any case.

Intellectual Property Rights and Divorce

QUESTION

Are intellectual property rights divisible in a divorce?

ANSWER

Intellectual rights themselves, if created by only one party and absent any related contractual right establishing a value of the rights, while negotiable between parties in a settlement, are probably not divisible by a family court in Colorado.  For example, copyright to a book completed by one spouse during the marriage but not yet under any contract to be sold or published, is probably not marital property.  Intellectual property rights, in order to generate monetary value, generally require further effort or investment; so a bare copyright, trademark, patent, or trade secret, without more, has no fixed value for a court to allocate at permanent orders.  While contractual rights (e.g., publishing agreements) entered into during the marriage are generally able to be valued and divided, it is settled law that contractual rights regarding future services or commitments are not divisible.[1]  Additionally, courts attempt to sever all possible legal ties between divorcing spouses, which means that a court will not maintain joint or split ownership of an ongoing concern, such as a partnership or joint venture that holds intellectual property rights.

Applying the law as laid out above may lead to unfair results if one spouse supports another in creating intellectual property “on spec,” and later receives nothing from the eventual sale or license of the property.  Colorado courts have dealt with similar inequity in the context of one spouse supporting the other in obtaining an educational degree.  The Colorado Supreme Court has repeatedly ruled that educational degrees are not property for purposes of division in divorce.  As the Court of Appeals has noted:

Often a spouse’s pursuit of higher education during marriage represents a common goal of both parties to increase their economic standing.  Both marital partners may expect to share in the rewards of such education, and it is not unusual for one spouse to assist the other in the accomplishment of that goal by providing a level of financial support as well as assuming responsibility for the tasks of everyday life.[2]

REMEDIES & LIMITATIONS

Even if a work of intellectual property is not subject to division, one spouse’s contributions (i.e., through support) to the other spouse’s development of intellectual property can and should be considered in both the general equitable division of property and in the awarding of any maintenance.

Maintenance.  In an important case called In re Marriage of Olar,[3] the supreme court emphasized that a trial court has broad discretion to fashion an equitable award of maintenance, and established a flexible approach to maintenance, encouraging trial courts to consider the contribution of one spouse to “the increased earning potential of the other” when dividing marital property and awarding maintenance.

Where divorce occurs shortly after the degree is obtained, traditional alimony analysis would often work hardship because, while both spouses have modest incomes at the time of divorce, the one is on the threshold of a significant increase in earnings.  Moreover, the spouse who sacrificed so the other could attain a degree is precluded from enjoying the anticipated dividends the degree will ordinarily provide . . . .  In such cases, alimony analysis must become more creative to achieve fairness, and an award of ‘rehabilitative’ or ‘reimbursement’ alimony, not terminable upon remarriage, may be appropriate.”[4]

The ruling in Olar indicates that a maintenance order comprised at least in part to “reimburse” one party for material sacrifices made during the marriage may be proper.

Limitation: In the maintenance context, if a party made sacrifices in supporting the unpaid creative efforts of his spouse, it is almost certainly a necessity to establish that there were reasonable expectations regarding the “appropriate employment” of the spouse.[5]  For example, if a wife began writing a book or inventing a machine during the marriage, without any contracts in place, the goal of the parties may have been to generate revenue, but this expectation would likely have to pass the reasonableness test before a court would consider placing a monetary value on the sacrifices of either party.

Property division.  Colorado case law provides that a spouse’s “contribution to the professional education and career of the other spouse must be considered in the distribution of property.”[6]  Limitation: If the creation of any particular work of intellectual property doesn’t fit within “the professional education and career” of the spouse, a party’s contributions probably will not be considered by the court.

Final note.  If you contributed to the creation of your ex-spouse’s intellectual property during a marriage that became, after dissolution, a best-seller or the next iPhone, you might have a remedy outside the family law courtroom.  “Unjust enrichment” claims may be pursued as a civil action by a party who has parted with something of value, yet receives less than a fair reward or compensation in return.

 

“Family Law Q+A” is meant to entertain and generally inform readers about interesting issues in Colorado family law.  Nothing in this blog post represents legal advice or creates an attorney-client relationship.  The views here do not represent the formal legal opinions of Carrigan Law, LLC.  Furthermore, the law is constantly changing, so any particular discussion of a legal issue may presently be outdated or erroneous.  Readers are directed to contact a Colorado family law attorney regarding the specifics of any case.



[1] IRM Anderson, 811 P.2d 419 (Colo.App. 1990) (holding that a contractual right for future services and commitments is not marital property, but “mere expectancy”).

[2] IRM Speirs, 956 P.2d 622 (Colo.App. 1997).

[3] 747 P.2d 676 (Colo. 1987).

[4] Olar, 747 P.2d at n.3 (quoting a foreign case) (emphasis added).

[5] See IRM Marshall, 781 P.2d 177 (Colo.App. 1989).

[6] IRM Speirs, 956 P.2d 622 (Colo.App. 1997).