Minnesota Divorce and Family Law Blog

College Expenses and Divorce

In a divorce, the Minnesota courts cannot impose on a parent the obligation to pay for college. This is because Minnesota family law does not govern children who have reached majority.  The family court will not interfere with the application of existing college funds to tuition expenses, and cannot interfere with the provisions of an UTMA (Uniform Transfers to Minors Act) account or 529 Plan.  The family court will also enforce an agreement between parents to contribute to college expenses, but only an agreement that both parties enter into voluntarily.  The family court cannot order a parent to do so against his or her will.

The result of this situation is that many young adults of college age receive less help for college as a result of their parents' divorce compared to their peers.  In some cases, the conflict between the parents results in a bitter parent's withdrawal (or both parents' withdrawal) of support for a child's higher education.  More commonly, the economic realities (and struggles) of the parents' divorce renders both parents much less able to contribute to college expenses.

There are times when the spouse with the greater income owes the duty of paying alimony or spousal maintenance to the other spouse, but would - if given the right - make a higher priority of a child's college expenses than the other spouse's living expenses.  The family court cannot allow the needs of a child who is no longer a minor to come before the needs of a spouse unless the child is disabled or otherwise in special need.

For families with college-age children, or children nearing college age, the need for a strong financial plan and the consequences of a high-conflict divorce are important considerations when the parents' marriage is dissolved.

Divorce, and a House with No Equity (or Negative Equity)

Six to ten years ago, nearly every divorce in which the couple owned a house provided the couple some equity value to divide.  The house was an asset, and the spouses could sell the house, and divide the proceeds; or one of the spouses would buy out the other spouse's interest in the house.  In the latter case, one spouse would be given a financial settlement for the asset he or she would be leaving behind.

Then there was a housing bust that caused scores of foreclosures and short sales.  Many economists believe that we may be climbing out of that hole, and the housing market is improving.  But that does not change the reality for many divorcing couples that their house has value at or below the balance owed on their mortgage.  

In the case of a house with negative equity, if one spouse leaves the house behind, the other spouse is left, not with an asset, but with a liability.  The spouse left with the liability may believe that the departing spouse should pay something towards the debt on the house.  The problem with that idea is that the house may end up in foreclosure, or a short sale, or the spouse who stays in the house may be able to negotiate with the bank on the mortgage.  In other words, the spouse who stays may not end up realizing the entire "negative value," so to receive from the departing spouse a "full accounting" of the negative value may result in something of a windfall to the spouse who stays.  

Moreover, if the couple has children, one spouse may stay in the house to avoid, or delay, the children's move to another house.  In so doing, that spouse derives intangible benefit, essentially an unquantifiable value, from remaining in the house - particularly if that spouse is able to negotiate with the bank, and is able ultimately to remain in the house, with the children, indefinitely.

The most common practice is to treat the "underwater" house as a "zero asset."  The departing spouse is incurring the expense of renting, which offsets the expense to the remaining spouse to continue to make payments on the mortgage.  In the case of a home with a larger mortgage payment, the remaining spouse may leave the house after the expiration of the mortgage redemption period, without putting any additional money into the home.  Either way, assigning a zero value to the house is often found to be the fairest resolution.  

Waiting Period for Divorce - Misguided Idea

A bill has been introduced in the Minnesota Senate for a two-year waiting period in contested marriage dissolutions that involve children.  The concept of a waiting period is misguided if its purpose is to encourage (force?) parents to stay together "for the kids."  

The current law provides that if one spouse (not both) asserts that the marriage is irretrievably broken, the family court will grant a marriage dissolution.  This means that one spouse may want to save the marriage, and the court will still dissolve it.  Not ideal, for sure.  But what is the alternative?  Forcing someone who does not want to be married to stay married?

Under the current law, a marriage requires both spouses either to be fully committed to the marriage or to be subscribing to the belief that the marriage can be saved.  One could describe marriage the same way without referencing the law at all.  A marriage cannot survive if one spouse has one foot "in" and one foot "out."  There are occasions when the spouse who has "checked out" can be brought back into the marriage through counseling.  But those occasions are far outnumbered by situations in which the marriage truly cannot be saved.

When children are involved, there is more reason to allow the marriage dissolution to proceed quickly, not less. Studies show that children living with parents who experience high marital conflict suffer more than children whose parents live separately.  Certainly, children are best off living with parents who live together and experience low conflict, and are worst off in high-conflict situations whether their parents live together or not.  But the dissolution of their parents' marriage can be the triggering event to transform a child's living environment from a high-conflict situation to a low-conflict situation.

Family courts would struggle with management of divorce cases if there were a two-year waiting period. During the waiting period, the conflict between spouses over parenting plans, child support, valuation of marital property, and the extended transition from living as a couple to living apart would be very destructive.  

If the bill progresses into anything given serious consideration - here's hoping that never happens - it would be interesting to see what empirical basis could possibly be presented to support the notion that a waiting period is a widespread solution to a widespread problem.

 

 

Alcoholic and Chemically Dependent Parents and Child Custody

If a couple with children separates, and one of the parents is alcoholic or chemically dependent, should the family court:

a.    Terminate the addictive parent's parental rights;

b.    Restrict and/or supervise the addictive parent's parenting time;

c.    Condition the addictive parent's parenting time on his or her sobriety; or

d.    Leave alcoholism or chemical dependency out of the custody and parenting time decision altogether?

It depends, but in nearly all cases, options (a) and (d) would be ruled out.  Option (d) is too extreme.  The family court needs to address the totality of the child's circumstances in order to determine what is in the child's best interests.  There is no way to comprehensively consider the child's best interests if a parent's addiction to drugs or alcohol is ignored.

Option (a) is too extreme in the other direction.  If an addictive parent's parental rights were terminated, there would be other factors involved, such as criminal or abuse issues, persistent neglect of the child, the posing of significant danger to the child, or repeated failure to seek treatment for his or her addiction.

Option (b) is the most likely scenario if the addictive parent is not properly addressing the addiction, or is in the preliminary stages of recovery.  Restrictions and/or supervision are necessary to protect the child from the potential risk of being in the care of an impaired parent.

Option (c) is the common arrangement if the parent has learned how to manage his or her addiction. With proper management of addiction and sustained sobriety, the custody and parenting arrangements can be normalized.  There may need to be a backup plan for both parents to follow in the case of a relapse. Better still is a parenting plan with healthy co-parenting and communication that encourages the addictive parent to self-assess or self-report if his or her sobriety is tested or threatened, so that he or she is in no way deterred from doing the right thing for the child.  It is really no different than the circumstances of any child whose parents must rise to the occasion when coping with an emergency situation.   

Being alcoholic or chemically dependent should not serve as an automatic disqualification for a parent to have primary custody or liberal parenting time.  Many parents who have overcome addiction are as equipped, or better equipped, to care for children as a parent who has not met those kinds of challenges. Consider a child whose parents are both addicts.  Option (c) is a necessary component in those circumstances, and the parents' mutual accountability for sobriety is paramount.  Otherwise, the child is, by default, living in unsafe and uncertain circumstances.

There is no simple or quick answer to the questions that arise when child custody and parenting time are determined in cases of one or two alcoholic or chemically dependent parents.  If the issue is given proper weight, neither amplified nor ignored, the children are given the safe and secure living environment that they deserve.

Same Sex Divorce in Minnesota - Part 2

As a followup to my November blog post about gay divorce, it is interesting to note Minn. Stat. Section 517.03, which dates back to 1997, and reads as follows (note the italicized parts):

(a) The following marriages are prohibited:

(1) a marriage entered into before the dissolution of an earlier marriage of one of the parties becomes final, as provided in section 518.145 or by the law of the jurisdiction where the dissolution was granted;

(2) a marriage between an ancestor and a descendant, or between a brother and a sister, whether the relationship is by the half or the whole blood or by adoption;

(3) a marriage between an uncle and a niece, between an aunt and a nephew, or between first cousins, whether the relationship is by the half or the whole blood, except as to marriages permitted by the established customs of aboriginal cultures; and

(4) a marriage between persons of the same sex.

(b) A marriage entered into by persons of the same sex, either under common law or statute, that is recognized by another state or foreign jurisdiction is void in this state and contractual rights granted by virtue of the marriage or its termination are unenforceable in this state.

It is also interesting to note Minn. Stat. Section 517.20 (italicized in its entirety):

Except as provided in section 517.03, subdivision 1, paragraph (b), all marriages contracted within this state prior to March 1, 1979 or outside this state that were valid at the time of the contract or subsequently validated by the laws of the place in which they were contracted or by the domicile of the parties are valid in this state.

Section 517.20, which dates back to the late seventies, modified the requirements for marriage licenses, and "grandfathered in" all previous Minnesota marriages and all valid out-of-state marriages.  It is interesting to note (and frankly, somewhat troubling) that the 1997 legislature not only banned gay marriage but pre-empted the "grandfathering" of out-of-state gay marriages.  

Aside from the politically charged issue of strictly limiting the defininition of marriage, the legislation creates problems for cohabiting couples, their children, their attorneys, family court judges and other related professionals.  If gay couples marry elsewhere, move to Minnesota, and then break up, their children do not deserve the uncertainty that is brought about by not falling within the purview of typical family law cases.  Nor does the financially dependent party to the breakup deserve the uncertainty involved in co-ownership of homes, cars, bank accounts and the co-responsibility on mortgages, leases, debts and credit cards.

There will necessarily be some progress and evolution in the enforcement and amendment of these laws, and the promulgation of other laws, to address these situations over time. 

Irretrievable Breakdown of the Marriage

Under Minnesota law, the statutory basis for dissolving a marriage is one spouse's (or both spouses') assertion that there has been an irretrievable breakdown of the marriage.  It is important to note that it is not required that both spouses assert that the marriage cannot be saved.  

In many cases, one spouse wants to end the marriage, but the other spouse would like to save the marriage.  In one sense, the Minnesota statute reflects a certain reality: if both spouses are not firmly invested in the preservation of the marriage, the marriage cannot survive.  In other words, the marriage cannot be sustained if either spouse has one foot in, and one foot out of, the marriage.  If one spouse makes the assertion of irretrievable breakdown, the other spouse can refrain from admitting it, but cannot keep the divorce from happening.  

What the statute actually reflects is the no-fault grounds for divorce that accompanied the abolition years ago of fault-based grounds for divorce, such as adultery, abandonment or cruelty.

 

Same Sex Divorce in Minnesota

Now that gay marriage has been legalized in some states, the time has come to tackle the issue of gay divorces.  There is some debate in the legal community about how (or even whether) same-sex divorces should be handled in Minnesota.  Minnesota law provides that a person who has resided in Minnesota for 180 days is entitled to dissolution of their marriage.  Since my practice involves substantial interstate and international cases, I encounter cases of married couples whose marriages, or the solemnization of their marriages, would not be recognized under Minnesota law, but whose divorces fall under the jurisdiction of the Minnesota courts based upon residency.  Gay marriages presumably can be (should be...must be...) handled similarly.  

The problem with not rendering divorces of valid same sex marriages is two-fold.  First, the same potential constitutional issues that loom over prohibiting gay marriage, pertaining to the unequal treatment of same-sex couples versus opposite-sex couples, loom for refraining from proceeding with gay divorces.  Second, the enforcement of bigamy laws is complicated greatly by refusing to provide a divorce to a legally married couple.  (As an example, if a Minnesota resident is validly same-sex-married, separated from his or her partner, unable to get a divorce, and prepared to marry someone of the opposite sex, they may or may not be in the process of committing bigamy.)  

Other options for gay couples include prenuptial contracts and bifurcated court actions. Prenuptial contracts required the couple's attention BEFORE solemnizing their union, but could define the parties' respective rights in the event of a termination of the relationship.  Bifurcation court actions would result if the couple has children (issues pertaining to whom must necessarily be addressed in family court) and the parties resort to civil courts for financial and property issues.

My expectation is that eventually the distinctions between gay and straight divorces will become outmoded, and it is a matter of when (not if) same-sex couples will come to handle their divorces in the same manner as opposite-sex couples. 

 

 

 

Readeo

One way that the internet helps connect a child and a parent who do not live together is a web service called Readeo.  Essentially, Readeo (www.readeo.com) is a bedtime story over the internet.  Both the parent and the child can see and hear each other, and either one can turn the pages of the book they are reading.  

The book-chat requires a webcam, high-speed internet, and a subscription. Through the service, users are able to access a vast book library.

For children, it's a step beyond Skype or video chatting, because it engages children of a young age in the interaction with a family member who lives elsewhere (regardless of how far away the family member lives).

Many parents have been given the right to telephone contact or video chatting only to have their time with the child cut short because the child is bored, shy, or put on the spot.  For many kids, the storytime element will boost their attention and enthusiasm for the social connection.  The service is also well-suited for military families and out-of-town grandparents and other relatives.

I am hoping that anyone who has used Readeo will post a review or anecdote their experiences with the service. 

Dividing Retirement Interests in a Divorce

It is important to consider some distinctions in retirement interests and the way they are divided in a divorce.  A Qualified Domestic Relations Order (QDRO) is commonly needed so that both spouses can have separate interests in a retirement account without problems associated with tax penalties and early withdrawals.

The QDRO process involves the two spouses, their attorneys, the court and the plan administrator. Sometimes, an additional person is involved, if the attorneys outsource the drafting of the QDRO to a third party.  Each party and their attorney must approve a QDRO draft, the court must sign it, and the plan administrator must pre-approve (early in the process) and implement (late in the process) the QDRO.

Oftentimes, the asset that is divided by the QDRO is a 401(k) account or pension that neither party plans to tap into for many years.  In that case, the time involved in processing a QDRO is of minimal concern. However, when one or both parties needs to liquidate some retirement funds to pay debts or purchase a house, it is a problem that the process takes so long.  The benefit of the long process, though, is the ability for the spouse receiving a share of the other spouse's account to cash out their share without tax penalty.  

When the parties are dividing an IRA (individual retirement account), a QDRO is not necessary.  The bank should implement the division as set forth in a court-signed decree.  If one or both parties cashes all or part of the account, most of the time, there is an early withdrawal penalty.

Consequently, the division of an IRA provides a time advantage, but a tax disadvantage; and the division of a 401(k) or pension provides a tax advantage, but a time disadvantage.

 

 

Annulment in Minnesota

If you want to terminate your marriage, you need a divorce.  If you want to nullify the marriage, you need an annulment.

Under Minnesota law, a marriage can be annulled under the following circumstances:

(a) One spouse lacked the mental capacity to consent to the marriage at the time of the wedding, unbeknown to the other spouse;

(b) One spouse lacks the physical capacity to engage in sex, unbeknown (at the time of the wedding) to the other spouse;

(c) One spouse, or both spouses, lacked the capacity to consent to the marriage at the time of the wedding because of the influence of alcohol, drugs, or other incapacitating substances;

(d) One spouse's consent was obtained by force or fraud (although this basis for annulment does not apply if the defrauded spouse later lives with the other spouse voluntarily); 

(e) One spouse, or both spouses, were not 16 years of age or older at the time of the wedding, and if under the age of 18, did not have consent of his or her parent or guardian. 

It is important to note that the family court has discretion to fairly divide assets and liabilities in annulment cases, as in divorce cases; so the decision to annul the marriage - versus to dissolve the marriage - does not affect the property settlement.

Moreover, in certain cases, one spouse may dispute the grounds for annulment but be unable to dispute the grounds for divorce, since a marriage can be dissolved under Minnesota law if one spouse declares an irretrievable breakdown of the marriage (a somewhat subjective standard that is satisfied by one spouse's assertion to the family court that the marriage cannot be saved).  If the grounds for annulment can be effectively disputed by one spouse's counterargument, the spouse desiring to end the marriage may be best served by seeking to dissolve the marriage, rather than nullify the marriage.