Divorcing Old Ideas: Notable Changes in Family Law

Attorney Jeff Van Fleet, Woodhouse Roden Nethercott, LLC

Family Law has experienced changes in the last year.

This article will briefly discuss changes in child support, low income calculators, shared custody, military retirement, tax deductions, alimony, and potential laws on the horizon.

Wyoming: Changes in Child Support Calculations

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Wyoming uses an “Income Shares Model” to calculate child support, which is based on the concept that the child should receive the same proportion of parental income that he or she would have received if the parents lived together. Child support is calculated using the combined net income of both parents and the number of children to calculate a presumptive amount of child support. The presumptive child support obligation is then divided between the parents in proportion to the combined net income. The parent who receives less parenting time pays the other parent the calculated amount.

Other states use The Percentage of Income Model sets support as a percentage of only the noncustodial parent’s income; the custodial parent’s income is not considered. This model has two variations: the Flat Percentage Model and the Varying Percentage Model. Nine states (Alaska, Arkansas, Illinois, Mississippi, Nevada, North Dakota, Texas, Wisconsin) use the percentage of income model. Four states (Alaska, Mississippi, Nevada and Wisconsin) use the flat percentage model while the other three states (Arkansas, North Dakota and Texas) use the varying percentage model.

Forty states use the income model. The other states use either the Melson Formula is a more complicated version of the Income Shares Model, which incorporates several public policy judgments designed to ensure that each parent’s basic needs are met in addition to the children’s or the Percentage of Income Model sets support as a percentage of only the noncustodial parent’s income; the custodial parent’s income is not considered.

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Wyo. Stat. Ann. § 20-2-304 (c) When each parent keeps the children overnight for more than twenty-five percent (25%) of the year and both parents contribute substantially to the expenses of the children in addition to the payment of child support, a shared responsibility child support obligation shall be determined by multiplying the parents’ total child support obligation as derived from subsection (a) of this section by one hundred fifty percent (150%). The new law works to remove the proverbial cliff and encourage parents to focus on the best interests of the children. Shared custody not only affects the amount of time the children spend with the parent, but it factors into child support calculations. Previously to avail a parent to a reduced child support payment for shared custody, the non-custodial parent must of had the children for at least 40% of the year which is 146 or more days per year. This proverbial cliff is significant. As a result, parties were often in the position where they were focused on manipulating the child’s visitation schedule to also manipulate their child support. This behavior is generally not in the best interest of the child. The new law places nearly every parenting plan in the shared custody range as 25% is only 92 days of visitation.

For purposes of  governing child support guidelines in joint custody cases, in order for a parent’s contribution to be considered “substantial,” it must be something worthwhile, of real worth and importance, as distinguished from providing for expenses which are merely nominal or without value to the children; contribution does not have to be for extraordinary expenses and can include expenses associated with providing child’s necessities while with non-custodial parent. Lee v. Lee, 2013, 303 P.3d 1128. The courts have already ruled on the meaning of “substantial”:

  • Father who did not have joint custody of minor daughter following divorce did not make a “substantial contribution” to the support of his daughter justifying a reduction in his child support obligation under the shared physical custody statute or statute authorizing a deviation from the presumptive child support, even though father paid for daughter’s needs when she stayed with him;  mother paid for daughter’s school clothes, school lunches, medication, and recreational and basic item needs. Fountain v. Mitros, 1998, 968 P.2d 934.
  • Father did not provide substantial contribution to children’s expenses, and thus father was not entitled to have child support obligation reduced under shared physical custody provision of child support guidelines;  only substantial contribution father documented was payment of share of uninsured orthodontic costs as required under divorce decree and otherwise father provided only nominal contributions to expenses of children. Cranston v. Cranston, 1994, 879 P.2d 345.
  • Former husband’s voluntary contributions to his older daughter’s college expenses, after she was emancipated, could not be used to reduce the amount of child support due for his younger daughter, on former husband’s motion for modification of child support, as his child support obligation to the younger daughter was for her benefit, and her right to adequate support could not be bargained away based upon contributions he made to the older daughter. Keck v. Jordan, 2008, 180 P.3d 889.

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In calculating child support, one party’s income may be imputed if a has a history of only working for minimum wage or less, and is capable, to your knowledge of working 40 hours/week, the court may impute his/her income at $1,141.25 net monthly for a noncustodial parent and $1,185.67 net monthly for a custodial parent.

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New Low Income Calculations

Wyo. Stat. Ann. § 20-2-304 (f) If the difference between the obligor’s net income and the self-support reserve is less than the support obligation as calculated from the tables in subsection (a) of this section, the support obligation shall be set using the difference between the obligor’s net income and the self-support reserve. As used in this subsection “self-support reserve” means the current poverty line for one (1) person as specified by the poverty guidelines updated periodically in the Federal Register by the United States department of health and human services under the authority of 42 U.S.C. 9902(2).

 

 

 

Shared Custody

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New Law: Bruegman v. Bruegman, 417 P.3d 157:

Wyoming law has historically stated divided or shared custody was not favored. However, a recent court case, Bruegman v. Bruegman, published May 14, 2018, held that there is no presumption that shared custody is contrary to the best interests of the children, and shared custody should be considered on an equal footing with other forms of custody. In combination with changes by the legislature to Wyoming Statue § 20-2-304 (c), shared custody is now an available option that can benefit all involved parties.

 

 

 

Recent Changes to Military Retirement Division Order

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The Old Rule: The time rule formula entailed multiplying the service member’s “disposable retired pay,” as defined in 10 USC § 1408, by the marital (or coverture) fraction. The marital fraction consisted of a numerator equal to the total number of months the military member earned toward the benefit during the marriage and a denominator equal to the total months of service at the time of retirement. The former spouse was often awarded half of the resulting amount, that is, half of the marital portion of the benefit as determined by the time rule formula.

On December 23, 2016, President Obama enacted the National Defense Authorization Act of 2017 (NDAA), which substantially amended the Uniformed Services Former Spouses’ Protection Act (USFSPA) enacted by President Reagan.

The New Rule:  (Currently Serving Service Members) Under the Freeze Time Rule a former spouse may not benefit from the rank and time-in-service pay increases or cost of living increases that occur after the couple gets divorced. The new calculation essentially freezes the military member’s base pay at the time of divorce and uses it to calculate the spouse’s benefit, rather than calculating an entitlement based on pay at retirement. (Service Member Calculators). In addition, for orders dividing retired pay as property to be enforced under the USFSPA, a member and former spouse must have been married to each other for 10 years or more during which the member performed at least 10 years of military service creditable towards retirement eligibility (the 10/10 rule).

There is also a new blended retirement system (BRS), similar to a 401K. All new service members are automatically enrolled into the BRS. Service members with less than 12 years can opt-in to the BRS. Under the BRS, a service member can receive retirement benefits for less than 20 years of service and may be eligible for a lump sum payment.

Military Disability Pay

On May 15, 2017 the United States Supreme Court decided Howell v. Howell, 137 S. Ct. 1400, 197 L. Ed. 2d 781 (2017) in a unanimous decision. It confirmed that 10 U. S. C. §1408 expressly excludes ‘”disposable retired pay” amounts deducted from that pay “as a result of a waiver . . . required by law in order to receive”‘ disability benefits, §1408(a)(4)(B).  Where a veteran waives retirement pay to receive service-related disability benefits, federal law preempts state courts from ordering the veteran to indemnify their divorced spouse for the loss of that spouse’s portion of the veteran’s retirement pay. This allows a disabled veteran to reduce their disposable retired pay by their calculated disability, which reduces the ex-spouses portion of retirement.

 

 

The Impact of the Job Acts of 2017 on Alimony

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The 2017 tax legislation introduced two significant changes to how Alimony is treated for tax purposes, but stipulated that these changes would only apply to divorce or separation instruments that are executed after December 31, 2018. For instruments executed after that date, Alimony is no longer tax deductible for the paying spouse and does not need to be reported as income by the receiving spouse. (26 U.S. Code § 682)  Unlike some other provisions of the new law, these rules are not set to expire and will remain in place unless changed by Congress in the future. Divorce or separation agreements executed on or before December 31, 2018 will be grandfathered in, provided the parties involved have a written separation agreement by that date. This means that as long as an agreement is reached prior to the deadline, paying spouses may still take the Alimony deduction and receiving spouses must still report the Alimony they receive as income. A decree of divorce need not be acquired by the deadline — a written separation agreement is sufficient under the law. The new legislation repeals the section of the Internal Revenue Code that dealt with the taxation of Alimony trusts. The grantor spouse may now have to pay the income tax on trust income, even though they do not receive the distributions from the trust.

Personal Exemptions and the Child Tax Credit

Personal exemptions have been suspended for the tax years beginning after December 31, 2017 and ending December 31, 2025. However the child tax credit has increased. Depending on your income, these changes may increase or decrease you overall tax burden. Speak with an accountant to evaluate your personal situation.

 

 

This blog is not meant to substitute sound legal advice from a licensed professional. It is only intended to inform the reader of new changes to the law.

If you need assistance with a legal matter, please call us today. 307-432-9399

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LABORING THROUGH A WORKER’S COMPENSATION CASE

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By:      Christopher M. Brennan[1]

As a young attorney straight out of law school, I was itching to get some litigation experience. Unfortunately, the realities of the legal profession struck me hard: cases rarely go to trial. Then I received a phone call from an injured worker. He had hurt his back at work and the Division of Workers’ Compensation had denied his claim. I spent hours studying the rules and statutes governing workers’ compensation cases and decided to take the case.

Workers’ compensation is a great field for young attorneys or any attorney wishing to get litigation experience. It has all the makings of a trial: discovery, depositions, direct examinations, cross examinations, opening arguments and closing arguments. Unfortunately, due to the idiosyncrasies of workers ’ compensation cases, some attorneys may shy away from this much-needed area of the law.

The purpose of this article is to give a very general overview of a workers’ compensation case from beginning to end. I will begin with the notice requirements imposed on the employee. I will then move into the final determination by the Division of Workers’ Compensation, and the different tribunals in which workers’ compensation attorneys practice. I will then move into preparing the workers’ compensation case, and I will ultimately close with getting paid.

 Every Case has its Beginning

 As expected, every workers’ compensation case begins with an injury. This injury may be as small as a cut to as serious as a death. Whenever an injury occurs at work, the employee must act quickly to ensure his or her rights to workers’ compensation benefits are protected. Wyoming requires that an injury be reported to the employer “as soon as practical, but not later than seventy-two (72) hours after the general nature of the injury became apparent.”[2]  The employee’s duty does not stop there, however. The employee must also file an injury report with the employer and the Division of Workers’ Compensation (“Division”) within ten days after the injury became apparent.[3]

Failure to make these reports is not a death knell to an employee’s case, but it does present some serious challenged for any attorney moving forward. If an employee fails to report the injury to the employer and fails to file an injury report with the Division, the law presumes that the claim shall be denied, subject to the employee’s ability to prove, by clear and convincing evidence a lack of prejudice to the employer or the Division in investigating and monitoring treatment.[4] It is extremely important for any attorney handling a workers’ compensation cold call to immediately as if the employee gave written notice to their employer and filed a “Report of Injury” form with the Division.

The “Final Determination”: An attorney’s invitation to the dance.

Unlike civil cases, which begin with a petition or a complaint, workers’ compensation matters begin when the Division issues its final determination. Upon receipt of every injury report, claim for medical care, claim for disability benefits, or any other matter requiring Division approval, the Division has sixty days to issue a final determination and send it to the employer and the employee.[5] The Division’s final determination will either approve or deny the employee’s claim for benefits. If the claim is denied, it is imperative that you act quickly to preserve your client’s case. Upon the issuance of a final determination, an interested party has a right to request a hearing.[6] The hearing request must be in writing and must be postmarked within fifteen days of the date the Division mailed the final determination.[7] The request for a hearing should specifically state that the employee objects to the Division’s final determination and requests a hearing on all matters affected by the final determination. The Division will then refer the matter for hearing in front of the proper hearing authority.

As an attorney, it is important to note that the final determination is an attorney’s formal invitation to “dance” with the Division. The moment a final determination is issued, the Claimant is entitled to legal representation, regardless of whether a formal request for a contested case is filed.[8] The issuance of the final determination triggers the attorney to receive a reasonable fee for the services he or she provides.[9]

Who hears the case?

A workers’ compensation case can be heard by the medical commission or the office of administrative hearings. The medical commission selects a medical hearing panel comprised of three members of the commission and a hearing officer.[10] The medical commission is comprised of eleven health care providers, who rotate participating in the medical hearing panels. The medical commission only hears “medically contested case[s].” Medically contested cases fall into four categories: impairment ratings, the right to continue temporary total disability benefits, permanent total disability, and any other issue where the primary issue is the resolution of conflicting evidence of medical diagnosis, prognosis, or the reasonableness and appropriateness of fees charged.[11] On the other hand, the office of administrative hearings hears cases whose issues are legal in nature. Typical issues in front of the office of administrative hearings are legal causation, whether the injury meets the statutory definition of injury, and any other matter not falling under the auspices of the medical commission.

Preparing to Win

After the referral for the hearing is completed, the tribunal will issue an order setting the prehearing conference, the hearing, and appointing the claimant’s attorney. This Order not only sets the preheaing conference and hearing, it also sets the deadline for filing your disclosure statement,[12] expert designation, and information about mediation. .

The burden of proof: A beast to bear.

Once the matter is referred for a hearing and you have received your order setting all of the deadlines, it is important to immediately research your burden of proof in the case. A workers’ compensation claimant has the burden of proving all essential elements of his claim by a preponderance of the evidence particularly that the condition for which compensation is claimed arose out of and was sustained in the course of employment.[13] Unfortunately, the burden of proof in workers’ compensation cases may vary and a discussion of the various burdens will be reserved for a longer discussion. However, it is important to note, for purposes of this article, that different burdens exist for injuries occurring over a substantial period of time,[14] coronary conditions,[15] hernias,[16] and compensable injuries for which benefits have not been paid for over four years.[17]

Discovery: Finding that forgotten injury.

Just like any other civil case, workers’ compensation cases are subject to the Wyoming Rules of Civil Procedure. Pursuant to the Order referenced above, the Division will send Claimant’s counsel a full and complete copy of the Claimant’s workers’ compensation file. It is important, however, to separately request all of the Claimant’s medical records for at least the past five years. These additional records will ensure you have a complete medical history of the claimant and allow you to prepare for any defense the Division may have to the Claimant’s injury.

After reviewing the Claimant’s workers’ compensation records, medical records, and perhaps conducting some discovery with the Division, it is now time to depose one of the Claimant’s health care providers.[18] It is important to remember that when deposing health care providers, the healthcare provider should be able to testify that the Claimant’s injury is, to a reasonable degree of medical probability, related to work, and that the treatment the Claimant received is both reasonable and necessary.

The Disclosure Statement: The compilation of all of your work in one document.

The disclosure statement is the pre-trial memorandum for workers’ compensation cases. The disclosure statement is due twenty days before the hearing and must be served on the office of administrative hearings (or the medical commission), and all parties. The disclosure statement to the office of administrative hearings or the medical commission must be bound in a three-ring binder with all exhibits tabbed and incorporated into a single document. The disclosure statement must include at least three items: a complete list of all witnesses who will or may testify at the hearing and information on how that witness can be contacted; a statement of the specific claims, defenses and issues which are presently before the tribunal, and all documents, statements or other evidence that the party will or may use as an exhibit in the hearing.

Given that the disclosure statement is the first time that the adjudicative body will be able to read all of the arguments, issues, and review all of the evidence, it is critically important that your disclosure statement is concise, but provides enough information for the hearing examiner to make his or her decision before the case is heard. Your disclosure statement should be easy to cite to as it may be relied on when the hearing examiner writes his or her decision. Be sure to include headings and sub-headings.

If you find that the Division’s disclosure statement mentioned items that you did not consider when writing your own, you may be able to supplement your disclosure statement, provided that it is supplemented prior to the deadline. If it is after the deadline, it may be helpful to provide notice to the Division of your supplement.

It is Time to Get Paid

As stated above, W.S. § 27-14-602(d) provides that any attorney appointed as counsel for the Claimant shall receive a reasonable fee. After the hearing examiner has issued his or her written opinion, you must act to ensure you do not miss any deadlines to have your fees and costs paid. All requests for fees and costs must be submitted within ninety days of the final order.[19] The request for fees must be verified and must detail the time spent and the work performed.[20]

When you submit your verified motion for fees and costs, the Division has the opportunity to object to those fees and costs. The hearing examiner will ultimately decide the total amount of fees and costs to which you are entitled and will issue an Order approving those fees and costs. When the Order is entered, it is important that you send that order, along with a Form W-9 and a Workers’ Compensation Claim Form for Non-Medical Services to the Division. Upon receipt, the Division will issue a check for the fees and costs approved by the hearing examiner.

Conclusion

Workers’ compensation cases are a great way for young attorneys to quickly gain litigation experience while getting paid a reasonable fee. While workers’ compensation cases do have some idiosyncrasies, the experience attorneys gain from these cases is invaluable. Unfortunately, while this article could not touch on each and every avenue a workers’ compensation case could take, it is my hope that it provides some of you looking to start your own practice, or expand your practice, some guidance in how to evaluate, prepare, and win these cases.

 

[1] Associate Attorney, Woodhouse Roden Nethercott, LLC.

[2] W.S. §27-14-502(a).

[3] Id.

[4] Id. at (c). It is important to note that this presumption arises only if the employee fails to report the injury to the employer and fails to file the injury report. See Wesaw v. Quality Maintenance, 2001 WY 17, ¶ 14, 19 P.3d 500, 506 (Wyo. 2001).

[5] See generally W.S. §27-14-601. If the final determination is not issued within sixty days, any interested party may request a hearing on the matter.

[6] Id. at (k)(iv).

[7] Id.

[8] See W.S. § 27-14-602(d). See also Painter v. State ex rel. Wyo. Workers’ Comp. Div., 931 P.2d 953, 955 (Wyo. 1997).

[9] Currently the fee is $150 per hour for attorneys and $40 per hour for paralegals. See OAH Rules and Regulations, Chapter 5, Section 3(b)(i).

[10] W.S. §27-14-616(b)(iv).

[11] Rules and Regulations of the Medical Commission, Chapter 1, Section 5(e).

[12] A disclosure statement accomplishes the same basic purpose as a pre-trial memorandum and is discussed later in this Article.

[13] Guerrero v. State ex rel. Dept. of Workforce Serv’s., Wyo. Workers’ Comp. Div., 2015 WY 88, ¶ 15, 352 P.3d 262, 266-67 (Wyo. 2015).

[14] W.S. §27-14-603(a).

[15] Id. at (b).

[16] Id. at (c).

[17] W.S. § 27-14-605.

[18] Healthcare providers are limited to a statutory rate for testimony given, so it is important to check with the healthcare provider that he or she understands those set fees. It is also important to note that it is customary that treating physicians are not subject to the expert witness disclosure requirements. This is not standard among all venues, so be sure to confer with opposing counsel about whether he or she requires expert disclosure of treating physicians.

[19] OAH Rules and Regulations, Chapter 5, Section 3(c).

[20] Id. at Section 3(b).

2018 Wyoming Child Support Changes

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Big changes are making their way to Wyoming with regard to child support laws.  Beginning July 1, 2018, Wyoming will have a new way of calculating child support for shared custody.

Wyoming uses an “Income Shares Model” to calculate child support, which is based on the concept that the child should receive the same proportion of parental income that he or she would have received if the parents lived together. Child support is calculated using the combined income of both parents and the number of children to calculate a presumptive amount of child support. The presumptive child support obligation is then divided between the parents in proportion to the combined net income. The parent who receives less parenting time pays the other parent the calculated amount.

Wyoming law has historically stated divided or shared custody was not favored. However, a recent court case, Bruegman v. Bruegman, published May 14, 2018, held that there is no presumption that shared custody is contrary to the best interests of the children, and shared custody should be considered on an equal footing with other forms of custody. In combination with changes by the legislature to Wyoming Statue § 20-2-304 (c), shared custody is now an available option that can benefit all involved parties.

Shared custody not only affects the amount of time the children spend with the parent, but it factors into child support calculations. Currently to avail a parent to a reduced child support payment for shared custody, the non-custodial parent must have the children for at least 40% of the year which is approximately 146 days per year. For example, the current child support obligation for one child with two parents who each have a net income of $2,000 a month is $392.79* by the noncustodial parent. The current child support payment for one child with two parents who each have a net income of $2,000 a month and shared custody is $70.70* by the noncustodial parent. This proverbial cliff is significant. As a result, parties have often been in the position where they are focused on manipulating the child’s visitation schedule to also manipulate their child support. This behavior is generally not in the best interest of the child.

The new law works to remove the proverbial cliff and encourage parents to focus on the best interests of the children. Under the new law, the child support obligation for one child with two parents who each have a net income of $2,000 a month, is $392.79* if the noncustodial parent physically has the child for 92 days or less. However, the child support payment for one child with two parents who each have a net income of $2,000 a month and shared custody, which will now be anything over 92 days, will start at $288.94 and can go down to $1.61* depending on the number of days spent with each parent.

Though there are still some nuances that need to be worked out, people who are receiving or paying child support should be aware of the major changes that are taking place over the next couple of years in the state of Wyoming. If you believe these new changes may affect you or you have questions concerning child support, divorce, or family law, please contact our office to set up a free consultation with one of our experienced family law attorneys at 307-432-9399.

*(Child support calculations are affected by more than just raw numbers, as other factors may affect the actual amount calculated and an attorney would need to know the specifics of your situation to calculate an exact amount.)