CHILD SUPPORT’S JUST A FORMULA, RIGHT? HOW HARD CAN IT BE? (Part 5)

More of the most common issues that I see when calculating child support:

Overtime Income

When a parent’s income includes overtime, parties often argue about whether the overtime income should be included in calculating child support.  One part of the Colorado child support law states that overtime pay is included as income only if the overtime is required by the employer as a condition of employment.  In essence, this means that if the parent can turn down the chance to work the overtime, it’s generally not included in the income figure used for child support. 

However, as I discussed in my Child Support blog #3, another part of the Colorado child support law states that a court may (not shall) deviate from the child support guideline formula if there is consistent overtime not considered in the income figure used to calculate child support.  

In practice, this means that the court cannot mathematically include the voluntary overtime income of a parent when it enters that parent’s income into the child support calculation.  However, once the court has produced the child support figure resulting from the calculation, the court can then adjust that child support figure up or down as it deems fair because a parent has consistent voluntary overtime income.

Income from Second Jobs

If a parent is employed full-time and voluntarily chooses to take a second job, the income from the second job is not included in that parent’s income when calculating child support.  The Colorado legislature doesn’t want to punish a parent who seeks to make more income by working a second job, so it excluded second job income from child support calculations.  Note: if the parent is employed less than full-time at his/her first job, it’s likely that either the second job income will be included, or the parent will be imputed full-time income at the first job.

However, just like voluntary overtime (and as I discussed in my Child Support blog #3), a parent’s income that is more than full-time or is from second jobs can be considered as a reason to deviate from the child support guidelines.  

CHILD SUPPORT’S JUST A FORMULA, RIGHT? HOW HARD CAN IT BE? (Part 4)

In earlier blogs, I’ve discussed some of the challenges that arise when calculating child support, especially when it comes to determining the correct income to use.  Here’s another issue that I often see.

Bonus and Commission Income

Colorado law says that bonuses are income to be included when calculating child support (typically averaged over 12 months and added to the regular monthly income).  In my experience, this is one of the most contentious issues, especially where bonuses are discretionary by the employer. 

A parent who received a bonus one year is often concerned that, if the bonus is included in income, he/she won’t receive a bonus the next year.  The other parent is concerned that if the bonus isn’t included, and the other parent does get future bonuses, the child support figure is unfair because it’s based on income that is too low.  Another concern can arise when the bonus is a one-time annual payment, but the monthly child support payment is based on the bonus being averaged over the year (even though not received monthly).

Under Colorado law, commissions are also income to be included when calculating child support (also usually averaged over 12 months and added to the base monthly income).  The parent with the commission income can be concerned because, although their commissions may vary from month to month, the child support is a set monthly amount.

These are perfect situations for resolution through mediation.  Judges are bound by the law and often don’t have the flexibility to account for these type of circumstances in calculating child support.  In mediation, parents can get much more creative and case-specific. 

I often help parents craft agreements where there is a base monthly child support amount, and then bonuses and/or commissions are shared as received (sometimes through a quarterly settle-up).  That way, a parent isn’t paying child support based on income that he/she doesn’t have, but the other parent is getting the child support benefit when/if that additional income is received.

CHILD SUPPORT’S JUST A FORMULA, RIGHT? HOW HARD CAN IT BE? (Part 3)

Deviation from the Child Support Guidelines

As I discussed in my first blog regarding child support, Colorado child support is calculated on a formula.  This formula is often called the child support guidelines.  Many people believe that these guidelines are absolutely required to be applied, with no wiggle room. 

Although it’s true that in most cases the courts follow the child support guidelines, the law does allow the court to deviate from the child support guidelines. The standard for deviation is that the application of the guidelines would be “inequitable, unjust, or inappropriate.”   If the court deviates, the court is required to determine what the child support would have been under the guidelines, and then give detailed reasons for the deviation.

Reasons that may (not shall) justify deviation from the child support guidelines include, but aren’t limited to:

  • one parent spends substantially more time with the child than reflected by a straight counting of overnights;
  • extraordinary medical expenses incurred for treatment of a parent or a current spouse;
  • extraordinary costs associated with parenting time;
  • gross disparity in income between the parents;
  • ownership of a parent of a substantial non-income producing asset;
  • consistent overtime not included in the gross income of a parent in the child support calculation (explained more in my next blog); and
  • income that is more than full-time or is from second jobs (explained more in my next blog).

The existence of one of these factors does not require the court to deviate from the child support guidelines, but may be used as a factor in a court’s decision to deviate.  The court can still deviate from the child support guidelines even if one of the above factors does not exist.  However, for any deviation, the court must state what the child support would have been under the guidelines, and then explain its reason for the deviation. 

Check out Part 1 and Part 2 in this series on child support in Colorado.

CHILD SUPPORT’S JUST A FORMULA, RIGHT? HOW HARD CAN IT BE? (Part 2)

As I discussed in my prior blog, the income of the parents is one of the most important factors in determining child support.  Many people assume that it is easy to know what figures to use, but disputes over income are the most common reason for parents to disagree about child support.

First, it’s important to know that when the child support formula is run, it is the monthly gross pre-tax income that is used.  Because it’s too easy for people to manipulate their after-tax/after-deduction income, the child support guidelines were determined based on pre-tax income.

If a parent is a full-time, straight W-2 employee (i.e. just salary or hourly) without overtime, income is usually easy to determine.  However, it rarely happens that both parents fall in this category. 

Below are a couple of frequent issues raised in income determination:

Self-employed parent

When a parent is self-employed, it can be challenging to determine that parent’s income.  The law states that income from self-employment is defined as gross receipts minus ordinary and necessary expenses required to produce the income. 

This sometimes equates to the income shown on a parent’s tax returns from the business, but not always.  For example, accelerated depreciation isn’t allowed to be deducted as an expense. Also, if a parent funds his/her own retirement account from the business and deducts that from taxable income, those retirement contributions are not deducted when calculating income for child support.  This makes sense, since a salaried employee also cannot deduct his/her 401(k) contributions from income when calculating child support. 

Another common situation is when a parent pays personal expenses out of a business – there are certain questions that need to be asked to see if those are appropriate expenses to deduct from gross receipts when calculating income for child support.

Unemployed or Underemployed parent

If a parent is unemployed, the question arises of whether income should be assessed to that parent, and if so, how much? If the parent is voluntarily unemployed, the court can assess an income to that parent for child support calculation (this is called “imputing income”).

Common factors in determining the amount of imputed income include:

  • that parent’s history of earnings
  • the current job market for that parent
  • the parent’s education or training
  • how long the parent has been out of the job market. 

If a parent quit working to avoid paying child support, the court would likely immediately impute that parent his/her most recent income.  If a parent wasn’t working because that was the expectation set during the marriage, that parent will likely be expected to work, but the court is more likely to give that parent time to get his/her skills updated or time to find a job before assessing income.

Another question is the reason for the unemployment – for example, did the parent quit to avoid paying child support, or did the parents  agree during the marriage that a parent should quit working?  These two reasons would lead to two very different court results.

There are situations under Colorado law in which a court would not impute income to an unemployed parent.  For example, if a parent is enrolled in an education program that is intended to result in a degree or certification in a reasonable time and which will result in higher income, the court may not assess income to that parent during his/her schooling. Another example would be a parent caring for a child (of this case) under thirty months of age.   Potential income would also not be assessed against a parent who is physically or mentally incapacitated.

I’ve given just an overview of scenarios described above (self-employed parent or unemployed parent). There are many factors that go into the analysis of both scenarios; each case is fact-specific and it’s rarely cut-and-dried.  Because I’m an attorney very familiar with the law, and because of my many years of mediation experience, I’m able to consider and discuss all of the relevant facts of your case with you and the other party in mediation.

In my next blog, I’ll cover more common issues and complications that arise when trying to determine income for child support purposes.

CHILD SUPPORT’S JUST A FORMULA, RIGHT? HOW HARD CAN IT BE? (Part 1)

As a family law mediator, one of the most common issues that I address in mediation is determining child support.  I can’t even begin to estimate how many people say something like, “I heard child support is a formula, so it must be easy to figure out.”  In some cases, that might even be a true statement.   However, the result of a formula is only as good as the information and numbers that get plugged into the calculation. 

Child Support in Colorado

In Colorado, child support is determined by a formula based on “the income shares model.”  This model assumes that a child should receive the same proportion of income in the form of support from each parent that the child would have received if the parents were together. There’s a chart in the Colorado statutes showing that for each level of combined monthly pre-tax income, what the resulting total base child support should be.  Then, in theory, each parent provides support to the child in his/her percentage of the support amount.

The following is a list of some of the information that typically goes into the formula when calculating child support:

  1. Pre-tax monthly gross income of each parent.
  2. Number of children of this relationship.
  3. Maintenance paid by a parent to a current or former spouse.
  4. Child support paid by a parent for children of other relationships.
  5. Number of children of a parent of other relationships who live with that parent.
  6. Number of overnights in a year received by each parent.
  7. Cost of childcare.
  8. Cost for the children’s portion of medical and dental insurance.
  9. Other specific expenses paid by a parent for the child, including ongoing medical        expenses.

It should come as no surprise that when there are this many factors in calculating child support, there is ample opportunity for parents to disagree about one or more of numbers that goes into the calculation.

In upcoming blogs in this child support series, I’ll address these factors.  My next child support series blog will discuss some of the common issues and disagreements around determining the income figures for each parent.

Did You Know There’s No Such Thing As “Custody” in Colorado?

Many people starting the divorce process in Colorado are unaware that, technically, “custody” doesn’t exist in this state.  In 1999 the law eliminated the term “custody” and replaced it with the phrase “allocation of parental responsibility.”  However, the underlying meaning is very similar. 

Under the allocation of parental responsibilities, there are two major categories that must be addressed in a parenting plan.

Determination of Parenting Time

The first category is determination of parenting time. This refers to the schedule of time that the children spend with each parent (including the regular schedule, the holiday schedule and the vacation schedule).

Allocation of Decision-Making Responsibility

The second category is allocation of decision-making responsibility.  This determines how the major life decisions will be made for the children (generally education, religion, and non-emergency medical, dental and mental health decisions). Under the prior custody law, “joint custody” and “sole custody” meant which parent could make these decisions, but it was all-or-nothing.  If parents had joint custody, they made all of these decisions together.  If one parent had sole custody, that parent made all of these decisions by himself/herself.  There was no in-between.

Under the revised law, responsibility for these types of decisions can be allocated independently of each other.  For example, one parent can have sole decision-making for medical decisions; the other parent can have sole decision-making for education decisions; and they can have joint decision-making responsibility for religious decisions (or any other combination, including joint decision-making responsibility for all decisions).

Why did Colorado change this law?

I was one of the drafters of the 1999 allocation of parental responsibilities law, and I often get asked why the law was changed to eliminate “custody.” 

Based on the experiences of judges and attorneys, parents often got caught up in “winning” or “losing” custody; because custody encompassed all of the decisions, winning or losing this battle had huge repercussions. The other problem was that many times parents agreed on all issues except one (for example, they disagreed only about education). Because of the way the law was previously written, a disagreement about one issue could still cause a parent to lose the ability to participate in all decisions, because the “custody” law was all-or-nothing.

The revised law allows judges and parents to address each decision category individually. This allows parenting plans to be individually tailored for the children, and can prevent a parent being entirely left out of all decisions for the children just because the parents disagree on one issue.

One of the biggest benefits of mediation when there are children is that you create a parenting plan that fits your specific family.  When parents go to court and make the judge decide on parenting issues, court time is usually limited, and often the judge doesn’t have time or isn’t given the amount of information needed for a detailed, family-specific parenting plan.

In mediation, I have a list of questions that I review with you. I use those questions to create an individualized parenting plan for YOUR children.  We can include as much (or as little) detail as you desire.

Beth Henson

Many people are surprised by the number of provisions that should be part of a thorough, comprehensive parenting plan.  Paying attention to detail NOW often prevents conflict and confusion later. I’ve heard back from many parents after mediation who say they’re glad that I encouraged them to talk about and document specific issues up front.  I truly believe that the parents are the best people to decide their children’s post-divorce future; with experienced guidance, an agreed-upon parenting plan is much more likely to happen.

Here’s What to Expect in a Divorce Mediation

what to expect in a divorce mediationThe divorce process can be a tense and emotional matter, requiring immense time and effort. Simply filing the paperwork can be difficult enough without a drawn-out court battle to accompany it.

Many couples opt to take a less contentious route and participate in divorce mediation. Although this process can have tense moments, a mediator will guide you through the negotiations, provide information in a neutral manner and help bridge the gap. Matters are often settled quickly and more efficiently.

If you have recently filed for a divorce and don’t want to hash out the private details of your life in a courtroom, then divorce mediation is an alternative that should be considered.

Today, we break down the three main steps so you know what to expect in a divorce mediation at Elizabeth Henson, Attorney Mediator, P.C.

THE First Meeting

This meeting will be an informative session where the mediator explains what to expect in a divorce mediation, including her specific process for guiding your mediation, as well as answer any questions that either party might have. Depending on your divorce mediator, this might be handled by phone or in person.

At this time, the mediator will often inquire about the specifics of your relationship and the issues within the divorce that need to be negotiated. She’ll also provide confidentiality forms for both parties to sign, stating that whatever happens during mediation cannot be discussed in a courtroom.

The first meeting is the icebreaker and information session that helps the mediator understand exactly what needs to be discussed and accomplished before the mediating begins.

Divorce Negotiations

The divorce negotiations often begin in the first meeting.  Your mediator may suggest dealing with the simpler topics first in order for both parties to “practice” coming to quick, mutually beneficial agreements before tackling the bigger, more emotional issues.

Negotiations won’t always be so straightforward, but your mediator will try to help keep both you and your spouse on track and assist in the brainstorming of solutions. She will help apply communication tools that can even be used in future interactions with your ex-spouse.

It’s important that you come to mediation with an open mind, a commitment to compromise, and a willingness to understand the other side’s point of view so that the process is as painless as possible. A divorce mediator will be there to facilitate the conversation, but it’s largely up to both participants to control emotions and approach matters sensibly.

Finishing the Agreement

Once the negotiations are over, and at the parties’ request, the mediator will draft the agreement reflecting the outcomes of your mediation. If you are co-parents, then a parenting plan is included as well.  These agreements are usually prepared and sent to the parties within a week to ten days after the meeting.

Until the agreement is signed, it is not legally binding and you are entitled to have your divorce lawyer review and advise you on all points. Once signed, submitted and approved by a judge, both sides must adhere to the agreement or be held responsible by the courts (subject to circumstances such as fraud or lack of full financial disclosure).

What to Expect in a Divorce Mediation

Even if you’ve come to a decision that divorce is the only answer, it doesn’t mean that your only option is to settle matters in a dramatic courtroom showdown. Here at Elizabeth Henson, Attorney Mediator, P.C., I’ve helped countless couples take a healthier route.

Divorce mediation is a civil, more cooperative approach to working through issues with your spouse so that you can move forward in your separate lives. It’s confidential, often less expensive and usually less contentious when you choose to work with a neutral, third-party mediator.  Of course, you always have the option of having an attorney assist you, either in mediation or outside of mediation. The process of mediation and the assistance of an attorney are not mutually exclusive.

For more of what to expect in a divorce mediation and to discuss next steps, please get in touch.

3 Divorce Mediation Tips to Help You Prepare for Your First Session

divorce mediation tipsOne of the hardest things about a divorce can be learning to let go, not just of a relationship, but of the life you built together along the way.

 

In order to do that, many couples hire a mediator such as Elizabeth Henson, Attorney Mediator, P.C. in Denver. I act as a neutral third party, guiding both parties as you make the best possible decisions for both sides.

 

If you’re getting ready to start working with a professional but aren’t sure what to expect, these divorce mediation tips will put your mind at ease.

Divorce Mediation Tips

Read on to find out how to prepare for divorce mediation and make sure it goes as smoothly as possible.

 

  1. Find the Right Mediator

Finding a divorce mediator isn’t as simple as doing a quick Google search and picking the first one you see. In the US, mediation is generally an unregulated industry. This means that the standards vary wildly between providers. You need to do some thorough research before you hire anyone.

 

Look into the qualifications and background of each mediator you find before considering hiring them. You need to know that they have the skills to handle your case. As for myself, I am a family law attorney who has conducted close to 4,000 mediations.

 

You also need to make sure you can have a positive working relationship. Many divorce mediators will offer a short phone consultation to give you an idea of what they can offer. Make a quick phone call first and if you like what you hear, then you can move forward from there.

 

 

  1. Be Willing to Negotiate

There’s no point in going through divorce mediation if you’re not willing to compromise.

 

The nature of the mediation process requires cooperation and compromise from both parties, and it won’t be successful if one or both spouses don’t actively take part.

 

Divorce can be a difficult, emotional, even traumatic process, and spouses sometimes approach it with a stubborn mindset. However, the my way or the highway approach won’t get you anywhere, so be prepared to meet in the middle.

 

Create a divorce mediation checklist, noting down where you’re willing to compromise and what’s not an option for you. That way, you can come prepared.

 

  1. Dedicate Time to Self-Care

A divorce is a huge life change. Many people find their lives turned upside-down, in complete shock over what is happening. The stress, anxiety, and exhaustion of it all can take a major toll on your mental health and well-being.

 

During this time, it’s important to remember to take care of yourself. Otherwise, you may not be able to approach your divorce mediation with a clear head.

 

The choices you make could have a huge domino effect on your life going forward, so it’s best to be in the right frame of mind to make big decisions. You’ll be splitting your marital property, making financial settlements, possibly discussing maintenance, and if you have children, creating a parenting plan too.

 

The Support and Guidance You Need

These divorce mediation tips should give you an idea of what to expect. For more information, please read my FAQs on mediation to find out how and why the process works.

 

Once you decide to move forward, please get in touch with me at Elizabeth Henson, Attorney Mediator, P.C. to discuss how I can empower you to decide your own future – instead of leaving it to a judge.

What Are Divorce Mediation Services?

Divorce Mediation ServicesIf you’re thinking about ending your marriage, you may also be searching for the right professionals to support you and help make the process easier.

A mediator, such as Elizabeth Henson, Attorney Mediator, P.C., can work with you and your spouse in coming to an amicable divorce agreement while potentially avoiding the distress that often accompanies a court-fought divorce.

To better understand divorce mediation services, please keep reading.

Getting to Know Mediation Services

To learn a bit more about my divorce mediation approach and how I can be helpful for your specific circumstances, you are welcome to call or email me. 

We can arrange a 15-minute phone call where I will listen to your situation and discuss with you how I can help you and your spouse achieve the most straightforward divorce possible. Through divorce mediation, you and your spouse will have a neutral third party to facilitate negotiations and create a more collaborative environment. In my experience, this often leads to both sides coming to easier agreements.

When you enlist divorce mediation services, you and your spouse will typically have a better chance of settling the most important matters of your marriage, such as the arrangements for your children, division of assets and debts, spousal maintenance and more.

During mediation, you’ll work through a series of discussions and negotiations until both sides are satisfied with the agreement. By putting your positive energy into mediation sessions, you might even notice reduced stress levels (an unexpected but welcome side effect often reported by my clients).

Figure Out What You Need

Anytime that you are planning to participate in the mediation process, it’s important that you come prepared with a checklist of what you hope to achieve from the negotiations.

This way, you’re able to figure out your top priorities and what issues have some wiggle room. During a mediation session, you can then speak clearly and honestly about what’s most important to you moving forward.

If you have children together, learning to better communicate and compromise during mediation also gets you on the road to mending your relationship to the point that you can co-parent productively.

I have also had clients seek out family counseling to help them heal and adjust to the changes that they’re going through. Beyond mediation, there are many ways to promote a more amicable divorce. It’s all about what you need and what works for you.

Hire an Experienced Divorce Mediator

Finally, you need to make sure that you hire an experienced divorce mediator, someone that you feel will listen and provide the guidance you need at every step.

There are many mediation companies out there, but you need to ensure they have the right credentials. You’ll want such important matters to be handled by a professional with the skills for such a task.

In this regard, you’re welcome to contact me at Elizabeth Henson, Attorney Mediator, P.C. I am a family law attorney who left the courtroom in 2001 to offer couples a more amicable option and a more reasonable cost. Over the years, I have successfully conducted thousands of mediations, providing both education and guidance while enabling my clients to take control of their futures.

To learn more about my divorce mediation services, please take a look at my website and feel free to schedule a consultation. I look forward to helping you.

Finding the Right Divorce Mediator

Finding the Right Divorce MediatorIf you and your spouse have decided to end your marriage without going to court, finding the right divorce mediator is your next step. Here at Elizabeth Henson, Attorney Mediator, P.C. in Denver, I’ve helped numerous couples who have decided to take control of their own futures. I realize that finding a mediator might feel overwhelming. Today, I offer a few ideas to help you find the right professional to guide you through the process.

Offers a Practical Approach

A good divorce mediator can provide a practical approach to your situation. This means that they’ll listen to your opinions and engage both parties in a discussion about how the court may view your situation and certain decisions. Ultimately, a mediator can help you arrive at creative solutions when needed and find results that both parties find agreeable.

Acts as a Neutral Party

It is important that you feel like the mediator is a neutral third party who is not fighting for one side’s best interests, but focused on the best interests of everyone, including children. You want both sides to feel that his or her views are respected in the process. A mediator should also encourage you to have your agreement reviewed by a  divorce attorney on your behalf before you sign it.

Provides Education

When finding the right divorce mediator, make sure they’re able to help you understand the mediation and legal processes. They should encourage you to ask questions, as well as provide a thorough and clear response.

Expert in Divorce Mediation

You want a professional who is an expert in divorce mediation and is trained specifically in helping separating spouses find common ground. Your mediator should be able to assist everyone in remaining cooperative, focused and calm. Here at Elizabeth Henson, Attorney Mediator, P.C.  in Denver, I offer the education, information and guidance needed to help parties work through a difficult process with dignity and self-determination.

Understands Complex Issues

The best divorce mediator will be able to provide you with guidance for many situations. If you have children, you could want a mediator who is going to be able to help you through some potentially complex family dynamics. If your finances are complicated, you need a mediator with experience in such matters. While they won’t be accountants, they should be aware of the impact involved in assigning assets and debts to one or the other party.

Expert Troubleshooter

Mediation can be a complicated process, so it’s important that your mediator is a highly effective problem-solver. Many divorce mediations require a great deal of conflict resolution, so your mediator should be effective in helping you and your spouse find fair solutions to problems and disagreements.

Good Rapport

Divorce mediation can have far-reaching consequences for your future, making it important that you feel comfortable with the divorce mediator you choose. You should feel that you can trust her and that you will be listened to and treated fairly during the process.

Finding the right divorce mediator in Denver may help you and your spouse more amicably move forward in your separate lives. By keeping your private life out of the court system, it’s often a healthier situation for both parties, as well as any children involved. If you need a divorce mediator, please contact Elizabeth Henson, Attorney Mediator, P.C. I look forward to getting to know you and helping you through the process of mediation.