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Divorce in Minnesota: Who Gets to Claim the Child for Taxes?

Written By: Amanda Maenner | Published On: 11th November 2009 | Category: Child Custody, Collaborative Divorce, Contested Divorce, Legal Separation, No Fault Divorce, Uncontested Divorce | RSS Feed

Tax law is not state-specific, but is federal. The Internal Revenue Service has deemed that noncustodial parents are not able to claim their children for tax purposes. In general, since the custodial parent is caring for the child the majority of the time, they are the party that should receive the benefit. For tax purposes, a title of joint custody does not really matter. The IRS looks solely at what percentage of parenting time each parent has, and the party who has over 50% will receive the benefit.

This is true for a party’s ability to claim the child as a dependent for tax purposes and for other tax benefits such as credit for any child and dependent care expenses.

In divorces in Minnesota, it is common for the parties to agree in the divorce decree to divide the right to claim the minor child for tax purposes. This is done by alternating years for the right to claim, offering a party with a higher potential tax benefit the opportunity to buy the other party out of their rights, or having each party claim one of the children (if more than one child). If this is used, the custodial parent must sign over their rights through a Release form (IRS Form 8332) and file it with the IRS.

The credit given for child care is not as negotiable. The IRS will only allow one parent to claim any deduction from child care costs, and it will only allow the parent claiming the credit to claim the amount they actually paid to the provider. For example, if mom makes all of the payments to the daycare provider but agrees to allow dad to take the credit, dad will not actually receive any benefit.

If both parents claim the same child, both of their tax returns are flagged by the IRS and the matter is investigated. The custodial parent has the ultimate right to claim the child for tax purposes, so it is important to have any other agreements included in your final divorce decree and to get any releases signed by the custodial parent. Also, it is important to talk to a tax professional about any implications from your divorce settlement on what your ultimate goals are.

Is a Personal Injury Settlement in Minnesota Marital Property or Non-Marital Property?

Written By: Kathryn Lammers | Published On: 6th November 2009 | Category: Contested Divorce, Divorce Mediation, Legal Separation, No Fault Divorce, Property Division, Uncontested Divorce | RSS Feed

In a divorce proceeding, a personal injury settlement can represent a large amount of money that will have to be divided between the parties. Usually, this type of settlement occurs in Personal Injury or Workers Compensation cases. In Minnesota, a personal injury survivor can recover for a variety of losses including: past and future wage loss, past and future medical expenses and pain and suffering.

During a divorce, the court or the parties divide the marital property and the non-marital property. Is a personal injury settlement in Minnesota marital property or non-marital property?

In Minnesota, wages are considered marital property. Therefore, any wage loss compensation arising out of a personal injury claims would be considered marital property. If medical expenses were an issue, they are a martial debt; therefore, any reimbursement for past medical expenses is a martial asset and should be divided between the parties.

On the other hand, it stands to reason that future wage loss payment and any future medical expenses are non- martial because a spouse is not liable for debts incurred after the divorce, nor is the spouse entitled to any additional monies received after the divorce.

Minnesota law says that your physical body is entirely yours and is, in essence, non-marital. Therefore, any monetary awards arising from pain and suffering incurred from an injury to someone’s body are non-marital since the body is not a marital asset. This includes losses arising out of pain, suffering, disfigurement, disability, and loss of enjoyment of life.

It is important to remember though that most personal injury cases settle and the settlement may not break the compensation down into categories, the way a jury would. This may make it difficult to determine which “category” the money received falls into. If you think you have a claim to your spouse’s personal injury settlement and you are in the midst of a divorce you should contact an attorney.

Ways to Avoid Problems in Supervised Formal Probate Administrations

Written By: Amanda Maenner | Published On: 4th November 2009 | Category: Uncategorized | RSS Feed

When you are a Personal Representative in a supervised administration for probate versus an unsupervised administration or an informal probate, you are held to a different standard as far as following the rules. There are specific rules for the probate court. In an unsupervised administration, the court is not watching you as closely to make sure that you are following those rules. However, when it is a supervised administration, almost everything has to be presented to the court for approval.

If you do not get the court’s approval in advance of doing something, it may or may not be detrimental, depending on your situation. For example, if all beneficiaries are aware of what is happening, the court may not take any recourse other than retroactively approving what was done. However, if not all beneficiaries are included in what is done, or there are other issues such as a minor is involved, then the court very well may punish the individuals who violated the rules more severely.

The best course of action as a Personal Representative is to follow your attorney’s advice. There are so many details within the rules of what needs to be done and what is prohibited. Without the advice of counsel, it is easy to miss something.

The last thing you want to do as a Personal Representative is to make a mistake that puts you in trouble. It is easily avoidable if you are diligent in your role as Personal Representative and avoid taking any significant action without consulting your attorney first.

The Basics of Guardianship and Conservatorship Law in Minnesota

Written By: Kathryn Lammers | Published On: 30th October 2009 | Category: Uncategorized | RSS Feed

There are two arrangements that can be made if a person is unable to act on their own behalf: a Guardianship and a Conservatorship. When a person is unable to act on their own behalf, it means the person is incapacitated.

Minnesota Statutes say that incapacity is proven when the Petitioner (the person who is asking the court to appoint a conservator/guardian) can provide evidence to the court that:

the proposed ward/protected person is unable to make responsible personal decisions, and;
is unable to meet his or her needs.

What is a Guardianship?

A Legal Guardianship is a legal arrangement under which one person, a guardian who is appointed by a court, has the legal right and duty to care for another, the ward, because of the ward’s inability to legally act on his or her own behalf because they are a minor or because of mental or physical incapacity. Black’s Law Dictionary 707 (6th ed. 1990). Minnesota Statutes state that a guardian has the powers and duties over the ward’s person.

What is a Conservatorship?

A conservatorship is similar to a guardianship except that the conservator who has been appointed by the court has powers and duties over the incapacitated person’s estate.

Who needs Guardianship or Conservatorship?

A ward is a person who is under the custody or protection of another. Wards who have had guardians appointed are minors or incapacitated adults who are impaired to the extent lacking sufficient understanding or capacity to make or communicate responsible personal decisions and who have demonstrated deficits in behavior which evidence an inability to meet personal needs for medical care, nutrition, clothing, shelter, or safety. Minn. Stat. § 524.5-310.

In the case of guardianship of the person, and conservatorship an incapacitated person is:

”an individual who, for reasons other than being a minor, is impaired to the extent of lacking sufficient understanding or capacity to make or communicate responsible personal decisions, and who has demonstrated deficits in behavior which evidence an inability to meet personal needs for medical care, nutrition, clothing, shelter, or safety, even with appropriate technological assistance.” Minn. Stat. § 524.5-102, subd. 6).

Protected persons are those individuals who have had conservators appointed for them because they lack similar capacity and have demonstrated behavioral deficits regarding their estate or financial affairs. MS 524.5-401

Who is appointed guardian or conservator?

Whoever the court determines is in the best interests of the ward or protected person can be their Guardian of Conservator. The Court will consider the following factors:

current guardian;
kinship or familial relationship;
the reasonable preference of the ward or protected person.

Minnesota Statute says that the court is required to act in the best interest of the incapacitated person when considering who to appoint as guardian or conservator. Minn. Stat. § 524.5-309. Guardians and conservators must also submit to a criminal history and a background check.

In order to apply for a for the appointment to be guardian or conservator a Petition must be filed in the probate court of the county of residence of the proposed ward or protected person. A court hearing is required. The proposed ward or protected person should be present at the hearing. If the court finds that a guardian or conservator is needed, then a court will issue an order granting the Petitioner guardianship or conservatorship or both. At the hearing, the court may order the conservator of the estate to post a bond before the letters of conservatorship are issued. This will provide assurance that the ward or protected persons property and funds are secured. Letters of guardianship or conservatorship are evidence of the guardian’s or conservator’s authority to act on behalf of the ward or protected person.

The Court will want to order the least restrictive alternative to appointing a guardian or conservator. That means that if a suitable alternative to appointing a guardian or conservator is available the Court may order use of that alternative instead. For example, if the goals of the appointment can be accomplished by setting up a trust or a joint bank account, the court will go that route in lieu of a full-blown guardianship or conservatorship.

Formal and Informal Probate in Minnesota: What is the Difference?

Written By: Amanda Maenner | Published On: 27th October 2009 | Category: Uncategorized | RSS Feed

There are two different tracks one can take when an estate needs to go through the probate process in Minnesota: formal and informal. Informal probate is the most commonly used form, and is easiest for parties to use when the assets are straightforward and when everyone involved gets along. However, there are situations where formal probate is strongly recommended or even required.

The formal probate process is required in many situations, including the following: when there are problems with the will that a judge needs to review, when the heirs are not known, when the will is missing, when there are minor heirs, when known heirs do not get along, or when there are expected to be problems with the administration. Also, if the estate is insolvent (meaning there is more debt than assets), then formal proceedings are required.

The informal probate process uses a registrar instead of a judge who approves the estate to proceed informally and makes sure the paperwork is complete. The registrar is not involved between when the estate is approved and when the final accounting is due. This process has less oversight by the court and additional costs from hearings are not incurred.

The formal process starts with a hearing in front of a district court judge. The court reviews the paperwork and approves the Personal Representative (PR). At that point, the PR is able to work to resolve all outstanding issues in the estate. The estate may either be supervised, meaning the court must sign off on any distributions to heirs before they are made, or unsupervised, meaning the PR does not need the court to approve anything before closing the estate. In all estates, the court requires the PR to submit an accounting of everything they did.

Depending on the circumstances in your situation, one track may be better suited for you than the other. Speaking with an experienced probate attorney can help you to identify which route to take.

What Happens to Business Interests in Minnesota Divorce?

Written By: Amanda Maenner | Published On: 23rd October 2009 | Category: Collaborative Divorce, Contested Divorce, Divorce Mediation, Legal Separation, No Fault Divorce, Property Division | RSS Feed

When parties are married, everything that is earned or created during the marriage is marital property. Also included in the definition of marital property is a portion of any asset that was acquired before the marriage but increased in value during the marriage.

An asset that people often overlook when they are getting divorced is a business owned by one of the parties. If it was started during the marriage, the other spouse, whether they were involved in the business or not, has a marital claim to a portion of the spouse’s business interests.

This business interest is not just the amount of income the spouse would make in a given year. It includes any inventory owned by the company, any assets of the company such as a company car, and any income received by the business outside of salaries. This interest is offset by any amount of the value of the company that is attributable to the name of the spouse themselves. This is known as a key person discount.

An easy way to think of the business value is what it would be worth if the business were sold today. It is, of course, much more complicated than that. In divorce proceedings, both sides may hire experts to do a business valuation and determine exactly what it is worth and what should be awarded to each spouse in a divorce.

The Use of Parenting Plans in Minnesota Custody Cases

Written By: Amanda Maenner | Published On: 19th October 2009 | Category: Child Custody, Collaborative Divorce, Contested Divorce, Divorce Mediation | RSS Feed

When parties decide to get a divorce, how do they determine the parenting schedule that will be used?

The court looks at the 13 “best interest” factors when determining custody. Each of the factors is weighed in the analysis, and the court will determine who should have custody. However, when the parties first separate, there generally is one party who has been providing most of the care for the children, and that party will continue to do so until a parenting time schedule is agreed upon.

When parties decide to work together, they can come to an agreement in what is known as a “Parenting Plan.” The parenting plan outlines the basic parenting time schedule, as well as how the parents will handle holidays, communication regarding the children, and miscellaneous details such as deciding which extracurricular activities the children will participate in. The parenting plan is a useful tool because the parties are able to discuss matters while they are calm and rational, putting guidelines into place for the future when things could possibly become more contentious.

Parenting plans also allow the parties to set guidelines for how to deal with issues in the future. For example, a common problem in custody cases is a custodial parent wanting to move out of state with the child. This could include even moving across the border, even if it is a shorter distance than a move within the state. The court is reluctant to grant a move out of state when the parties don’t agree. Often, when the time comes that a party is considering a move, the tension rises regarding custody. A parenting plan would allow the parties to decide how to handle the issue of moving out-of-state prior to any parenting plan being set up.

A sample of a parenting plan can be found here. As is with any agreement between parties, in a parenting plan the parties can set guidelines for determining issues that the court would not otherwise be able to. Parenting plans are a very useful tool in helping people be able to better co-parent.

Protecting Your Credit in Real Property Divisions in Minnesota Divorce

Written By: Amanda Maenner | Published On: 15th October 2009 | Category: Collaborative Divorce, Contested Divorce, Divorce Mediation, No Fault Divorce, Property Division, Uncategorized, Uncontested Divorce | RSS Feed

A common part of a settlement agreement with divorce is the division of the homestead. Real property is considered marital if it was purchased during the marriage, regardless of whose name is actually on the title. In addition, if one party purchased the home prior to the marriage, the other spouse is entitled to some of the equity in the home that was gained during the time of the marriage. How much that equity amounts to in this economy is a different matter.

When parties divorce, the home is either ordered to be sold or is awarded to one of the parties. The agreement does not always specify that the party keeping the home should refinance, however. What happens then? Does this affect the other spouse’s credit?

The answer is it very well can have an impact on your credit. If you are the spouse walking away from the home and your ex does not plan to refinance, the mortgage company is still able to come after you for any of the unpaid mortgage if your ex does not pay on time. The mortgage company can report this to the credit bureaus, which will have an effect on your credit score. Your recourse at that time is to make a payment and then sue your former spouse in court.

There is no recognized legal right to sue based on damage to your credit score. If you are not able to make a payment on the mortgage, you may be left with no recourse, even though your spouse assumed the entire payment. This is why it is important to know what your final divorce agreement says and speak to a lawyer about how that will affect you long-term.

The Rights of Unmarried Fathers in Minnesota Family Court

Written By: Kathryn Lammers | Published On: 12th October 2009 | Category: Child Custody, Child Support, Paternity | RSS Feed

What are an unmarried Father’s Rights?

If a man and a woman are unmarried at the time of a child’s birth, the mother has sole legal and physical custody until the Court issues an Order stating otherwise. An unmarried father has to establish himself as the legal father of a child before he has any rights to ask for parenting time. Even if the parties are exercising parenting time and getting along, it is always best for the father to get his rights established through the Court system. Without a Court Order granting the father parenting time, the custodial parent (presumed to be the mother in these cases) could abruptly stop parenting time or not allow the father to see the child. In most cases, this is not in the child’s best interest, but she has the legal right to stop visitation unless paternity has been established.

How can an unmarried father establish paternity?

Paternity can be established in one of two ways:

By both parents signing a Recognition of Parentage (ROP). The ROP must be filed, and accepted by, the Minnesota Department of Health, Office of the State Registrar. An ROP does not automatically give the father the right to see the child. An ROP gives the father the right to go to court to ask for custody or parenting time. This is a “starting point” for a father to ask for legal rights.
By court order in a Paternity Action (Paternity Order). You may be granted some custodial or parenting time rights in the paternity action.

Parenting Time and Child Support

Even if an unmarried father is paying child support, he does not necessarily have legal rights to have parenting time with the child. Additionally, a father should not be told that he cannot see his child until he is current on his child support obligation. There are two different kinds of child support processes in Minnesota: one that uses a Magistrate and one that happens in District Court in front of a Judge.

An open child support case in front of a child support Magistrate is not the appropriate place to discuss parenting time or visitation. A child support Magistrate cannot hear issues on parenting time or visitation. The only time a child support Magistrate can decide an issue with parenting time and custody at a child support hearing is when the child support hearing is part of a hearing to establish paternity. Then the child support magistrate can issue an order about those issues the mother and father agree on, like custody, parenting time, or the name of the child.

However, if the motion or action is brought in District Court, the Judge has the power to hear all of the issues, including child support and visitation.

Can an unmarried father get 50/50 or joint physical custody?

The court looks at many different things the first time it decides custody. But the decision depends on the facts of each specific case. It is difficult to change a judge’s decision about custody after the decision has been made.

The court looks at the following 13 “best interest” factors to decide what is in the best interests of the child. This is for the very first time the court decides custody. These factors are:

What each parent wants for custody;
What the child wants. This only counts if the child is old enough. Generally a child must be at least 10 years old before a court will ask about what they want. But the court will look at each child’s situation and decide if the child is old enough or able to say what they want.
Who is the child’s primary caretaker;
The closeness of the relationship between each parent and the child;
The situation and relationship between the child and parents, siblings and other people who may play a big part in the child’s life (like grandparents or parent’s new partner);
The child’s adjustment to home, school and community;
The amount of time the child has lived in a stable and good environment and the need to maintain what the child is used to;
The permanence of the proposed custodial home. For example, does the mother or father have a new boy or girl friend? If they live together, how long has it been? Is it likely to last?
The mental and physical health of everyone involved;
The ability and willingness of the parties to give the child love, affection and guidance and to keep educating and raising the child in his/her culture or religion;
The child’s cultural background;
If there is, or has been, domestic abuse by one parent against the other. How has that affected the child?
The willingness of each parent to support and allow the child to spend time with the other parent (unless there is, or has been, domestic abuse).

The Court will take all of these factors into consideration when ordering custody. If parents do not agree on a custody arrangement, a parenting time evaluation may be ordered and then the evaluator will look at these factors and make a recommendation.

What if the Father is on the birth certificate?

Even if the father is on the birth certificate, he still may not be the legal presumed father. A birth certificate is not the legal proof of paternity in a court case. A father seeking to establish parenting time will need the certified ROP or a certified copy of the paternity order from the Court.

Minnesota's Courts Bring New Tools in Fighting Domestic Violence

Written By: Amanda Maenner | Published On: 8th October 2009 | Category: Child Custody, Child Support, Contested Divorce, Domestic Abuse | RSS Feed

Domestic violence is a huge issue in many family law cases, and many times the victims do not feel like the system is able to help them as much as they need it to. A recent homicide/suicide case has brought this issue to the forefront again. According to the Star Tribune, “[s]ince 2000, more than 200 Minnesota women have died as the result of domestic violence.” This statistic is alarming.

Minnesota was a leading state in the development of domestic violence programs. In 1980, the Duluth Model was created and is recognized on an international level. This was the first program to outline multi-disciplinary procedures to protect and advocate for victims. It looks as though Minnesota is yet again leading the way in the development of domestic violence programs.

The latest program is called Blueprint. It will be implemented next year in St. Paul, and should follow on a national level. This program is described in an article in the Star Tribune from October 4, 2009. It will assess an offender’s risk of harming again, rather than their flight risk, in setting bail. This will hopefully keep more victims of abuse safe following an arrest of the perpetrator.

Hopefully new programs like this will be able to help the problems we see with domestic violence victims. Any matter that goes through the court system runs the risk of having an increased chance of abuse against a victim. Situations such as divorce and custody hearings bring out the worst in many people, and when someone already has a propensity for violence, it is a dangerous situation.

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