Montgomery County is making major revisions to its custody procedure, including an overhaul of the “Our Children First” parenting seminar. This seminar is a requirement under Local Rule of Civil Procedure 1915.3* and mandatory for parties in custody cases. Effective today, the Court has temporarily suspended that Local Rule and the Court Administrator’s Office will refund registrations fees to anyone who is currently registered for the program and will not be accept registrations pending further Order of Court reinstating the rule.

Montgomery County’s new procedure becomes effective January 1, 2019, so I anticipate this month being used to enact the changes to the Seminar envisioned by the Court, including the installation of Krystiane (Krys) Cooper (MSW, LCSW, RPT-S) as the new director of the program, and that the Local Rule will be reinstated at some point in January.

Though the point of this blog is to talk about recent developments in the area of family law, we would be bereft if we didn’t take a moment to recognize the life of U.S. District Judge Joseph L. Tauro of the District of Massachusetts. He passed away on Friday at 87 years old.

Judge Tauro presided over two cases attacking the federal Defense of Marriage Act. After finding that DOMA compelled Massachusetts to discriminate against its citizens in order to receive federal funding, and that it was the state’s right to recognize same-sex marriages and afford such couples any rights and benefits derived from that marital status. Judge Tauro’s decision was affirmed by the First Circuit Court of Appeals. The Supreme Court declined to take the case after the decision of U.S. v. Windsor struck down Section 3 of the Defense of Marriage Act defining marriage as between a man and a woman. Judge Tauro’s decision in 2010 could be seen as the first of what became a wave of successful legal challenges to DOMA and, ultimately, legalized same-sex marriage.

The attack on DOMA was not his only major case over his 41 year career beginning with his appointment by President Richard Nixon. Other notable cases include his handling of a class action law suit leading to major reforms in Massachusetts institutional case for developmentally disabled people, as well as his facilitating a settlement involving systemic discrimination in Boston’s public housing system. He had a significant influence on the law through his decisions and the impact those who worked for him and with him.

 

After a five-year hiatus due to a ruling that effectively undercut the viability of custody coordination, the Pennsylvania Supreme Court has reintroduced custody coordination by Rule effective March 1, 2019. In the intervening five years, the Supreme Court (who promulgates the rules) in conjunction with the Domestic Relations Procedural Rules Committee (of which Judge Daniel Clifford from Montgomery County is a member) have painstakingly reconstituted the custody coordination rules to rectify the fatal due process flaws found in the system by the Superior Court in A.H. v. C.M., (Pa. Super. 2012).

Since the announcement in August, counties across the Commonwealth should have their local rules underway and beginning to certify – or at least identify their certification processes – attorneys and, under the new rule, mental health professionals, as custody coordinators.

Last September, I laid out the new rules in detail for The Legal Intelligencer and identified how this new system stands to benefit families in Pennsylvania by rerouting some issues out of the court system and into the coordination system. When coordination was abolished, it is fair to generalize that it was not because attorneys or parties did not see value in it. Under the new rule, the utility of custody coordination returns, but with a procedural support system that should allow it to be sustainable as an alternative dispute resolution tool.

You can also find my analysis here.

 

She was 21 and a college student. Anyone who recalls being 21 will also recall that it is an age of experimentation. Today she is dead, murdered by a person whom she dated for a month. Her killer was a 37-year-old man with a long criminal history of sexual abuse. It seems that toward the end she figured this out and sought help from law enforcement. However, where the relationship has a consensual element, it is difficult for law enforcement and the judiciary to figure out where and how the consent ended.

Ours is an age where relationships are often formed electronically. As divorce lawyers we encounter a fair number of people who engage in that medium and many are happy with the results. But we also know that people online are not afraid to portray themselves as a little or a lot different than the humans they really are. It appears that Lauren McCluskey’s killer, Melvin Rowland, presented himself as someone quite different than his history later revealed.

How do you protect yourself or your loved ones from themselves? There is actually help and it is an online resource. Pennsylvania has an online system by which anyone can examine the criminal record of another state resident. It’s not the easiest thing to navigate, but it can be done. The other challenge is that you do need some accurate information about the person you want to know about.

Go to The Unified Judicial System of Pennsylvania Web Portal at https://ujsportal.pacourts.us/CaseInformation.aspx. In the blue banner at the top you will see “Case Information”. There is a drop down menu for Court Case. This leads to another drop down that identifies four different courts where criminal matters are decided. Serious criminal charges, the kind for which Melvin Rowland had been convicted are handled in the Court of Common Pleas. Minor criminal matters (known as summary offenses) are handled in Magistrate Courts. In Philadelphia, it is called Municipal Court. But serious crimes, crimes defined as misdemeanors and felonies, these will be found in the Common Pleas site.

Once you open that Common Pleas page, it offers a page called Common Pleas Court Docket Sheets. Tab down and you will see a reference to Search Type. Click on the drop down arrow and select Participant Name. You will be prompted to fill in three items, Last Name, First Name, Date of Birth. You don’t have to have a date of birth to do the search, but if the name you are searching is a common one, realize that you may find a dangerous history related to someone you have misidentified. We’ll revisit that in a moment.  Once you have the First and Last Names filled in scroll down to the Docket Type category and using the drop down arrow select Criminal and hit the Search button. Any matching criteria will be displayed at the bottom of the page.

If there is a history it will displayed at the bottom of the page as what is called a Short Caption that says Comm. v. Last Name. Note the case status. “Active” means that the case is still pending and criminal charges have not been disposed either by trial or plea. A “Closed” file is one where the case has been disposed of. That would mean a guilty plea, a conviction, a finding of not guilty or nolle pros (dismissal of the case without conviction). Before going any further, look out on the far right and you will see the birth date of the person charged. That may give you a clue when the person you are looking for has a common name. You may not know the date of birth, but this data will at least give you an indication of the age of the person charged.

Now hover on the icon on the far left and a drop down box offers “Docket Sheet” or “Court Summary”. You will want to look at both. The Docket Sheet will show you the date of arrest, the place where the arrest was made and a recitation of all charges. Realize that law enforcement is often known to “overcharge” as a means to get the defendant to admit to some charges. Understand as well that some crimes are pregnant with hysteria such as “terroristic threats.” The dockets will show the history of the charges. It is common for many to be dropped, often in exchange for pleas of guilt on other charges. In a word, these cases are negotiated far more often then they are tried. Unfortunately, you won’t see online the facts or incident giving rise to the charges. You will also see references to a “Grade”. M is for misdemeanor; a serious offense for which a person can face up to a year in the county jail. F is for felony which is a crime involving a sentence of more than a year in a state prison. S is for summary. These are petty offenses but still reflect either willful misbehavior or a person’s incapacity to regulate their behavior.

So, let us assume that you go to all of this trouble. These are the official criminal dockets maintained by the courts in Pennsylvania. The database for Pennsylvania does not include federal crimes or crimes committed outside of Pennsylvania. Another resource that can be quite helpful is The Dru Sjodin National Sex Offender Public Website, which is a national database of convicted sex offenders.

As we all know, there are both laws to protect us and people employed to enforce them. But, self-protection can be far more effective. They can be wrong, but is that a chance you want to take? Perhaps your special someone has been wrongfully charged and those charges will ultimately be dismissed, or the person acquitted. It does happen and not infrequently. Are you willing to bet your safety on being right? If the charges involve controlled substances, you may be dealing with addiction issues that place you in physical danger.

One thing this writer will bet on. Had a 21 year old University of Utah student had knowledge of these kinds of tools available and made use of them, she could have found out that Mr. Rowland had been guilty in 2004 of sex crimes involving children ages 13 and 17. Armed with that knowledge, the outcome in this story may have been different.

Just before Christmas last year, Congress passed and the President signed a major tax reform package that contained a surprising wrinkle.  It abandoned a decades long provision that permitted payors of alimony or spousal support to deduct their payments from income and required recipients to report the payments and pay tax on them.

The effective date of this change was/is December 31, 2018.  Orders and Agreements in effect on that date maintain the old tax treatment.  Still taxable to payee.  Still deductible by payor.  But Orders and Agreements formed in 2019 will be tax neutral unless the deal is a modification of a pre-2019 instrument (i.e. Agreement or Order), and it expressly retains the former tax treatment.  To address this, Pennsylvania support guidelines needed to adopt amendments to deal with two systems: one where the payments are taxable and one where they are not.

When the Pennsylvania Supreme Court Rules Committee began their review, they observed that every other state approaches child and spousal awards differently.  In Pennsylvania we have always calculated child support first and then used that result to calculate spousal and alimony awards.  The Rules Committee is recommending that we adopt a different approach.  Under proposed rules currently out for comment, we will solve first the issue of spousal support/alimony and then plug the results into a child support calculation.  If there is an Order in effect before December 31, 2018 the calculation does not change.  If the obligor makes $5,000 a month net and the obligee $2,000, you subtract the lesser number from the greater and start with the $3,000 result.  If there will be child support due, the spousal award is 30% of the difference or $900.  If no child support is involved the percentage remains 40 and the result is $1,200.  Both payments will remain taxable and deductible.

But, if the case involves a new Order or the parties should decide they want an Order to be reflective of the Trump tax reforms, the calculation becomes a little more complex.  Here we go; dealing first with a case where child support is not involved:

Obligors net monthly income $5,000
Less payments due to other families  
Adjusted net income available for support $5,000
x .33 $1,650 (this is new)
Obligee’s net monthly income $2,000
x .40 $800 (also new)
Subtract the $800 from the $1,650 and nontaxable support will be $850.  This contrasts with $1,200 taxable/deductible under the ancien regime.

Now, on to a case with the same incomes but a child support element:

Obligors net monthly income $5,000
Less payments due to other families  
Adjusted net income available for support $5,000
x .25 $1250 (this is new and a lower % than above)
Obligee’s net monthly income $2,000
x .30 $600 (also new, also lower % than above)
Subtract the $600 from the $1,250 and you get spousal support or alimony of $650.

These results will now become part of the child support calculation. The spousal award will be subtracted from obligor’s income and added to obligee’s.

  OBLIGOR OBLIGEE
Net incomes available for support 5,000 2,000
Spousal support/apl adjustment (650) +650
Adjusted income available 4,350 2,650
Combined income for support $7,000    
Relative percentages 62% 38%
Guideline amount 2 children 1,660    
Support 1,029 631
If the obligor has 45% of overnights the support is adjusted with a 15 basis point discount to 47%.
Then we allocate health insurance, private education, and activities (w/o discount)            62% Obligor and 38% Obligee.

These are recommendations to the Supreme Court and they are not yet law.  But, given the fact that the federal tax law will change in less than ninety (90) days and something must be done in that period, don’t be surprised to see the proposed regulations adopted at least as a temporary matter.

 

Two years ago the Pennsylvania Supreme Court weighed in on the matter of how third party standing was consistent with the fundamental right of parents to raise their children. That case moved the ball in a new direction as we had seen a trend favoring third party involvement in child custody litigation where “interest” was shown. On September 21, the Supreme Court issued a decision underscoring the definition of a parent and further articulating who can qualify as in loco parentis.

C.G. was in a same sex relationship with J.H. in Florida when J.H. decided to have a child using intrauterine insemination via anonymous male. The child was born in Florida in 2006. In 2012 J.H. took the child and established a separate residence first in Florida and a few months later in Pennsylvania.

Four years later, C.G. filed an action in Pennsylvania seeking partial custody. This was met with preliminary objections asserting lack of standing. The adult couple never formalized their relationship and no adoption had been begun even though Florida legalized same sex adoption in 2010.

The evidence about the relationship between C.G. and the child born to J.H. was unusual. As one might expect C.G. presented herself and supporting witnesses to promote the idea that she was part of the choice to have the child and a hands-on caregiver from the day delivery. But, once the adult relationship cooled, contact between C.G. and the child was once per week. After J.H. moved with the child to Pennsylvania C.G. saw the child only once in March, 2014 and didn’t phone her too often. C.G.’s financial contributions to the child seemed to be limited to occasional gifts and some camp tuition. C.G. did name the child as a beneficiary of an insurance policy on her life.

The opinion of Justice Sallie Mundy notes that the resolution of the preliminary objections involved testimony from sixteen witnesses and exhibits ranging from school parent forms to thank you notes following J.H.’s baby shower. This evidence was heavy in hope and expectation and remarkably light in terms of actual goods and services associated with parenting. Nonetheless, C.G. asserted that she was a parent under Section 5324(1) or “at the very least” a person in loco parentis. 23 Pa.C.S. 5324(2).

The Trial Court ruled that C.G. lacked standing. The disputed testimony aside, the Court noted no reference to C.G. on the birth certificate; no reference to C.G. in the child’s name and no action to begin a second parent adoption once Florida permitted such proceedings. The life insurance policy and the presence of the child on C.G.’s health insurance until the J.H. relationship ended was all of the documentary evidence the Court could find, and it credited J.H.’s testimony that she was responsible for almost every child-related decision concerning things like medical care, day care and other needs. C.G. did pay her share of household expenses while the two resided together but that appears to have been the extent of contribution aside from health coverage. The court stayed away from “bonding” issues noting that standing is an objective standard where bonding is not. See K.C. v. L.A. 128 A.3d 774,779 (Pa. 2015).

The Superior Court affirmed based on the absence that C.G. showed no law was advanced establishing that a non-biological, non-adoptive former partner can be a parent. C.G. v. J.H. 172 A.3d 43, 51-52 (2017). As for the in loco parentis claim the Superior Court deferred to the trial court findings of fact.

Justice Mundy’s opinion properly begins with the requirement of standing in all cases; “a substantial, direct and immediate interest” in the subject matter. It also noted that in custody matters, the goal is to protect families from intrusions by even well-meaning strangers.

C.G. advanced what is called an “intent based” approach to the role of parent. This Court notes that law does not yet define who is a parent but that the accepted definition is a status conferred by either biology or adoption. It also noted that the recent In re Baby S case also suggests that the status of parent can be expressed or implied by agreement. 128 A.3d 296 (Pa.S. 2015); See also J.F. v. D.B.  897 A.2d  1261 (Pa.Super. 2006). But here, the Plaintiff had none of these requisites. If C.G. was not a party to a parenting agreement or otherwise identified as an intended parent during the conception and birth process, she is not a parent under Pennsylvania law. Pennsylvania does not adopt the Massachusetts approach that allows parentage to be established by professing to be a parent. Interestingly, Justices Wecht, Dougherty and Donohue appear to be more open to this concept although they did not find that C.G. met the “professed parent” standard. The interplay between that view and conduct that is in loco parentis is an interesting topic.

On the claim of standing in loco parentis, the Court noted the twin requirements of “assumption of parental status” and “discharge of parental duties.” C.G. advanced a case, T.B. v. L.R.M. 786 A.2d 916 arising from an agreement to have a child together with one parent choosing the sperm donor and subsequent sharing of all physical responsibilities. The Supremes found T.B. to show a much higher level of involvement with the child than what the trial court observed in this case. It also distinguished C.G.’s claims from those in J.A.L. v. E.P.H. another same sex case with facts similar to T.B. 682 A.2d 1314 (Pa. Super. 1996). In both of those cases there was a documentary trail of medical authorizations, standby guardian documents and the like evincing a desire to raise a child together. This desire was borne out by what occurred in terms of consistent contact after the adult relationship dissolved. The critical issue is what occurs before a separation occurs, but while the Supreme Court notes that post separation conduct should not control a claim to be in loco parentis, that conduct may shed light upon claims of a person to have assumed rights and discharged duties while the relationship was intact. Here the post separation conduct seems reflective of what occurred when C.G. and J. H. were living together but C.G.’s asserted parenting role seemed passive at best.

As I read the analysis in C.G. v. J.H. it became clear that this is an area where we need clear standards, either by statute or rule. The Centre County judge who heard this case listened to 16 witnesses while deciding not a custody placement but “preliminary objections”. One has to wonder why it took C.G. almost four years to assert parental rights. But, she waited almost as long to see whether she was even a real party in interest.

We live in a world where the birth or adoption of every child is documented. When a person claims the role of parent, whether by biology or contract, that person must register such a claim if he or she is not named on the vital statistics form as a condition to assertion of “parentage.” And, shouldn’t someone claiming to be acting in loco parentis be statutorily required to show that their assumptions of duty and discharge of obligations has been continuous and recent as part of a pleading to intervene? We devote lots of ink to the subject of child best interests. Yet, one of those interests should be avoidance of protracted and acrimonious custody litigation. In many instances that cannot be avoided. But, where a child left one state and was relocated to another, only to see the loco parente once in four years, should that child be subjected to the kind of litigation this case involve. He/she was five when C.G. exited from daily existence. That child is now twelve and probably wondering whether custody litigation with a person they can scarcely recall will remain a part of daily life. C.G. v. J.H., 2 M.A.P. 2018 (Sept. 21. 2018)

This was a summer where prenuptials arrived in profusion, and what made it interesting is that just about all of them involved folks who were either beginning or in the middle of their earning careers. Most prenuptials involve couples who already have kids from former marriages and money they want to preserve for those kids. But we also see prenups for young people who have wealth already transmitted from their parents; parents who want that wealth to stay on their child’s side of the column even after a marriage occurs.

When going through this process with young folks or even people who are in their forties, lawyers ask lots of questions that can be uncomfortable. No one ever really asks a couple how they want to live their financial lives together and yet as McKenzie Frankel, a financial planner in Wayne, PA has observed, a lot of relationships would work far better if those questions were addressed. When it comes to how we manage family and money our expectations are often hard baked into our personalities by our own life experiences. Millennials can be especially interesting to work with because many of them are raised to eschew family and money stereotypes (e.g., mothers stay at home and dad’s do the financial stuff).

I read the Money Personality Quiz developed by Frankel and her partner Joslyn Ewart with interest, but I also considered some far more basic questions that young people in love should be asking each other. I also believe that the answers to some of these questions might be worth incorporating into agreements. Permit me to try my hand at my own “personality quiz:”

  • How important is it to your relationship that you have children, with a “0” reflecting no interest in raising a family and “5” indicating that it was indispensable to agreeing to marriage?
  • Indicate the optimum number of children you would want to have with your intended spouse.
  • Indicate the outer limit of the number of children you think you would want to have.
  • If fertility becomes an issue for either of you, would you be prepared to incur the expense and physical challenges which fertility treatments may involve?
  • If fertility is an issue, indicate your receptivity to adoption and whether there are limits to how far you were willing to adjust to the alternative options adoption may require.
  • If you had a child who suffered physical, intellectual or emotional limitations that prevent one of you from being able to work outside the home, how would you decide which of you would make that financial sacrifice and how would that sacrifice be compensated if the marriage were to dissolve?
  • If your child(ren) had no limitations but you decided that one of you did not want to return to work in order to devote energy to full time parenting, how should that be compensated if the marriage were to dissolve? How should you reduce or limit your lifestyle/expenses once the decision is made and the household income is reduced?
  • If you both had jobs earning equal amounts of money and one of you was offered employment that would require relocation to another city, how much more compensation would the spouse offered the job have to receive before you would agree to move, especially if no substitute job was immediately available in the new market.
  • How important is it to you that your child have the benefit of private school when a reasonable public school is available?
  • Do you see it as your responsibility to provide children with either vocational or academic training after they have completed high school? In a day (today) when a four year public school undergrad degree costs $80,000 and a private school $160,000, what should be your contribution and how do you want to finance the parent portion (e.g., savings or when it comes)?
  • In a day when the average social security benefit for a retiree is about $17,000 a year and the maximum benefit, if you contribute the maximum ($8,000 per annum) and defer to age 70, is $44,000 a year, what kind of retirement income do you hope to have and when do you intend to start financing that via savings? Can you agree now that a portion of your earnings go into some form of retirement and that you would continue that percentage?
  • How important is it to you that you own your home rather than rent a dwelling, “0” being of no consequence and “5” being an absolute necessity?
  • If you earned $30,000 per annum what do you consider a reasonable amount for a monthly auto payment excluding any trade in value (i.e., “0” down)? If your income doubled, would your expectations change and by how much?
  • Is there a level of income where you would prefer to devote additional energy to non-income producing endeavors like charitable work, creative work or occupations which sometimes pay lots of money but typically are low on the income ladder (e.g., acting, writing etc.)?
  • Between 1 and 5, rank your future spouse’s financial stability in terms of their approach to money. If your intended could earn $100,000 but would likely spend more than he earned, that’s a low rank. If your spouse would earn $30,000 but be more likely to still have money for savings he/she is more toward a 5.
  • What is your intended spouse’s current credit rating and what does the credit history look like? Shakespeare said it best: Past is prologue. And it’s a delicate subject, but have tax returns for recent years been filed?
  • Hobbies and collectibles are often a tell-tale signs of financial distress. Gambling, sports or clothing addictions and “collections” (whether cars, handbags, guns or memorabilia) can often take even solid wage earners over the edge. The latter expense often masquerades as an “investment.” We have worked with clients who have tried this. Very few profit from their efforts and many owe large sums on what they do own.
  • What’s the child support situation? Don’t be surprised to find out that a prospective mate who otherwise seems an honorable person owes tens of thousands in back support. There can be many explanations for this and some may be more reflective of neglect than malice but it won’t make any difference, when the $10,000 bonus you deposited to the joint bank account for a trip to Orlando is seized to pay his past due support.
  • Criminal background. This can be a painful look but today Pennsylvania has data online about prior criminal history. It does not include juvenile offenses (which occur before age 18), but any adult bad behavior tends to linger. Make certain you are looking at the right name and verify if possible with a birthdate and/or a social security number. You may be planning a driving honeymoon while your future bride is juggling her second DUI arrest.

So there are two stories here. Know the past of the person you love and talk about the future and how to address it. And while you are discussing the future you may want to think about an agreement that protects you with some promises that could be legally enforceable.

When you marry you usually take on obligations of support for each other. The property you acquire (except by gift) is divisible in divorce. The debt is as well. Most people file joint tax returns which means that any monkey business with the return affects both monkeys even though only one monkey was cooking the books. And except for credit card debt, lots of consumer debt including mortgages are “joint and several.” That’s legalese for “you’re on the hook for the mortgage even though you consistently gave him cash to make the payment.” He just had other priorities.

The author has plenty of real life stories to back up the scary things he just described. What makes the stories tragic is that they were actually avoidable if someone had asked some of the questions before. We have all heard the stories about people online creating an avatar; an identity that does not reflect who they really are. Don’t allow a love-based fantasy to ruin your otherwise stable reality.

It is axiomatic that divorce is an emotional process. Samuel Johnson summed up domestic life best when he wrote, “To be happy at home is the ultimate result of all ambition.”

One of the great challenges of representing clients going through this highly emotional chapter of life is that their focus tends to be on the present. Certainly, there are many daily issues that do merit attention. We live day-to-day. But, when I do an initial interview with a client, two of the questions I try to focus on are: (1) how many years does this client have until their productive (i.e., income producing)  life will end, and (2) how is the client suited to prepare for that day?

These issues have become more acute over time. When I began working as a divorce lawyer in the 1980s, some elements of life seemed fixed. Retirement was at age 65. Most clients aged 40-60 either had stable employment or were married to spouses who had stable employment. Stable employment meant mid to long-term employment in a stable industry for a stable business. All of that has changed.

Today I am meeting with people who have not reached 50 who report that they are concerned about whether their employer will still exist another decade or whether they will survive as employees. What has changed so dramatically in the past decade is that it is often the most senior business executives who are talking about such vulnerabilities. Many of these people have very solid retirement assets today, but they have job insecurity. When we explore that issue, these often highly talented people are seeing a future as consultants working spasmodically or experiencing long periods between jobs.

The September 4, 2018 edition of the Wall Street Journal focuses on a subject too often forgotten in the divorce process. How will we prepare for a retirement in an age when we may find ourselves effectively “retired” years before we expected it?

As the Journal article correctly observes, financial needs in retirement have been more the subject of “convention” than actual study.  The conventional wisdom is that we will need 70% of our final annual income in retirement. The financial services industry has promoted 80% for reasons that are self-evident. The Journal article by Dan Arierlt and Aline Holzwarth challenges these assumptions and correctly observes that all of us whether going through divorce or not, can actually do the necessary homework ourselves. It can be uncomfortable work, but it is highly necessary work.

Realize first that many of us are being forced to pull down retirement assets long before we expect. That can be caused by unusual life events or even something as simple as being terminated while a loan is outstanding on one’s qualified retirement plan.

The starting point is to look at what retirement mechanisms are out there. Social Security is the most ubiquitous and the same issue of the Journal contains an article debating the merits of taking that benefit at 62 in contrast to normal retirement (roughly 66) or deferring to age 70. Then some of us still have defined benefit plans or annuities, which will begin to provide monthly income for life. Finally, we turn to the defined contribution accounts, whether IRAs, 401k’s or 403B plans. With these accounts, the question revolves around how and when to draw. The goal of that game is to die while still solvent although an increasing number of Americans are dying in significant debt.

The Journal article notes and we have observed that many people launch into retirement having lost their regular salary but acquired an additional 8-10 hours a day on their hands with not much to do. Many of us dream of time to golf or attend the theater. Golf is a $40 a day activity. Broadway is a bad example, but the average ticket is over $100. Still want to see your pro sports team live?  Baseball $40 a day. Pro football is Sunday only but $172 for the ticket alone. Most of us do not really consider downsizing things like auto purchases and we now have 365 days a year to visit Florida in winter or friends and family the rest of the year. In short, we have witnessed clients who retired at 65 with $700,000 in retirement who seem to think they can maintain a $6,000 a month lifestyle. They can, so long as they don’t plan to live more than 10 years.

The article encourages people to actually wander into the weeds of these mundane daily costs while acknowledging that things like uncovered medical and long-term care expenses are unknowable given the state of our health care system. But, the article does not pay sufficient attention to what I will call the “core expenses” Will you retire with a mortgage and if so when will it be retired? Can you really afford to live in the home you have grown to love and nurtured with 30-40% of your pre-retirement household income?  The answer may be yes but the price may be a golf membership or the annual pilgrimage to the seashore. People don’t like to make these choices but you risk burning through your retirement too quickly unless you assess costs. Keep in mind as well that as you grow older, some things you do yourself like mowing lawns or cleaning windows and gutters will have to be outsourced unless you want to budget for some inpatient rehab when the hip breaks.

The other area not discussed but an area of high vulnerability for retirees is unbudgeted “child needs.” As attorneys, we have seen divorce clients who had large portions of their savings dispersed to subsidize a child’s drug rehabilitation, criminal defense or creation of a new business enterprises, built more upon hope than expectation. Their children have effectively made a once secure retirement far less secure. The parents providing these resources underwrite these or even more frivolous expenses (e.g., family vacations), ignoring the fact that as retirees, they have no ability to replace spent assets.

The electronic version of the article links to an Excel spreadsheet that identifies expenses by categories. Anyone contemplating retirement needs to look at that budget. A similar one can be found on the Pennsylvanian support rules by clicking on Income and Expense Statement.

Retirement is an uneasy subject especially in a world where the vagaries of employment may leave us retired long before we expect. But we need to look carefully at a day when we cannot replace what we consume with additional labor. And, in my world, we also deal with taking a retirement that might comfortably support two people in one household, which becomes stretched beyond normal limits because divorce has now taken a common resource and demanded it support two independent homes. The truth is that we are living a long time; a fact underscored by watching 106-year-old Roberta McCain bury her octogenarian son. Therefore, whether you are enduring a divorce or just thinking about your future, those thoughts need to focus on what you will need in the years ahead and how you will “mind the gap.”

Time flies!  In February of this year, a breaking story emerged about a senior White House staffer who was struggling with a security clearance.  The staff person was Rob Porter and his problem was that he had been accused of the physical abuse of his former wife, Jennifer Willoughby.  Willoughby appeared in an interview with CNN’s Anderson Cooper.  On February 23, we wrote that every American with a teenage child should have their child watch Willoughby tell her story in a way that was both elegant and chilling.

On August 8, I listened to National Public Radio’s Terry Gross as she interviewed Jennifer Fox.  Jennifer Fox is a filmmaker of some note and she has just issued a semi-autobiographical movie documenting her own sexual abuse by a coach when she was thirteen years old.  The movie called The Tale, is distributed through HBO.  I cannot say that I have seen the movie, which even Ms. Fox notes it to be an amalgamation of her personal history with fiction.  But the interview with Terry Gross on Fresh Air is Fox talking about the experience of being seduced and having a sexual relationship with a prominent adult male before the onset of puberty.  This all transpired while her doting parents took what seemed justifiable pride in their investment in a private athletic coach to advance their daughter’s athletic skills.

This story is not unique.  As we are learning from the US Olympic Committee and more than a handful of college campuses, this kind of sexual grooming by a person “in authority” goes on all of the time.  What is so important about Jennifer Fox’s interview is that she has the objectivity to evaluate what happened in 1973 from all sides.  She considers what her parents might have seen but missed.  She discusses what she thinks motivated a forty-year-old man to want a thirteen-year-old girl and that discussion is one not infected with rancor.  It is as if she is describing an auto accident unfolding before her eyes.  Most importantly, she probes deeply into how she fell prey to this relationship and negotiated her way out of it.  You can tell from the interview that she has reviewed her teenage years with a jeweler’s eye and the result is something all of us should hear.  Almost all teenagers feel powerless and quest for approval and recognition. That creates vulnerability.  Adults in western societies tend to be youth obsessed.  If you doubt that proposition, I commend you to look at the career of Brook Shields who played a twelve-year-old child prostitute in her 1978 major film debut or Jodi Foster who was 14 in 1976 when she played the same kind of role.  Filmmaker Fox was in high school when those films were issued and she echoes a 2007 Mayo Clinic study, which observes that victims of childhood sexual abuse are often prone to inflict their trauma on the generation that follows them.

As with Jennifer Willoughby, Jennifer Fox has a story to tell that is highly instructive.  It is all the more valuable because there is little if any time devoted to blame or retribution.  I commend the interview because it is not fictional.  I suggest that while it covers a sensitive subject, it does so in a real and unemotional way.  If you are the parent of a child, you have already tried to teach your child to be wary of “known risks.”  But we don’t like to consider sexual abuse a known risk.  However, if you think that risk is remote, consider the fact that Larry Nassar practiced medicine for just over twenty-five years.  At last count, two hundred and sixty-five women profess that the team doctor for USA Gymnastics abused them.  How can that be?  Listen to Terry Gross ask Jennifer Fox how and teach your children well.

Every year, both in April and in October, divorce lawyers face a dilemma.  While April is the official tax deadline, just about everyone knows that “complex” returns are almost never complete when spring rolls around and many filers defer to October.  But, when couples split they often ask for the first time whether they should be filing jointly with their spouse.  This often presents difficult questions for the lawyers because we are not accountants and we are latecomers to the financial history of the marriage.  The easy answer is to say “Never!” in response to the inquiry, but that usually means the marital estate will have additional tax burdens.  It also is often a financial shot across the bow of the primary breadwinner, causing aggravation that can set a decidedly negative tone to the negotiation process.

Inevitably, once the discussion about joint versus separate returns gets underway, one of the parties introduces another term, “innocent spouse.”  For many years, if one spouse was seriously hedging in reporting income or by deducting improper expenses, the spouse who did not produce the income or determine the expenses could claim that they should not be held liable for the taxes, interest and penalties.  This was because he or she did not know and could not reasonably have known about the tax evasion.  It is an area where laypeople seem to think they are expert when they most certainly are not.

On Saturday, the Wall Street Journal reported on the story of Rick Jacobsen.  Rick filed jointly with his wife.  In 2012, the IRS found that Mrs. Jacobsen had embezzled about $500,000.00 from a non-profit where she did accounting.  Most people don’t realize this, but if you steal money, the government classifies it as income and you owe taxes on it.  So the IRS sent the joint filing Jacobsen’s an “assessment” for $100,000.00 in income tax due but unpaid.  Jacobsen contested the assessment contending that he did not know about the “income” and should not be assessed for something his wife did without his knowledge.  Last month the U.S. Tax Court agreed.

How come the IRS did not just get the money from Mrs. J?  You know.  She was in prison and the money had disappeared.  So, Mr. Jacobsen filed his own Form 8857 and claimed he knew nothing about the income or the tax associated with it.  He was underway when a new wrinkle emerged. His now “ex” told the Service he did know about the money taken.  Innocent spouses are not innocent if they either knew about or “profited” from the wrongdoing spouse’s conduct.  Thus, if you are reporting $4,000.00 a month in income and you are making mortgage and car payments of $5,000.00 a month, the term “innocent” may not fit comfortably around your financial neck.  The IRS denied Herr Jacobsen relief and he appealed to the Tax Court, which heard his case in 2017.  By the time the case was heard the tax due had swollen to $150,000.00 with penalties and interest.  His happy news is that the Court decided for him on almost all of the unreported income.

How did he prevail against the government?  First, he showed that he was financially unsophisticated.  His wife was an accountant.  He had an associate’s degree and worked in a cheese factory.  Second, and most important, he could show that the money embezzled did not inure to his benefit nor was it apparent from his wife’s lifestyle.  The couple did gamble a lot, reporting $160,000.00+ in gaming income and corresponding losses in one year. The couple filed electronically and husband said his only involvement in tax preparation was providing his W-2 wage statement to his wife.  Not only did their lifestyle not improve, at one point their utilities were suspended for non-payment.  The Tax Court accepted his testimony that his gaming activity was quite modest and involved only slots.  One can picture the IRS attorney wincing during that testimony.  The Court also did not credit wife’s testimony that her husband knew because it was not supported by any evidence.

Other intangibles are credited with his win as well.  He is a disabled veteran who is no longer married to the offending taxpayer and aside from the issues associated with his joint filing, all other returns he filed showed income properly reported and taxes properly paid.

The Opinion reported as T.C. 2018-115, is worthy of review as the presiding judge marches through the statutory facts and case law to reach her conclusion.  She found that husband was “out” for most of the tax liability arising from 2010, but had to pay tax on a small piece of unreported income in 2011 because he filed a joint return, even after his wife was charged with embezzlement. Note also that the case is decided under precedent from the Seventh Circuit Court of Appeals. Other Circuits may employ other standards or analysis.

Also important to know is the statistical trend.  In 2013 there were roughly 35,000 innocent spouse cases presented for disposition.  Relief was denied in just over 10,000 of those cases and granted in some form or the other in 25,000.  In 2017 the number of requests had fallen to 25,000 and in that year the denial rate soared so that the chance of denial was equal to that of getting relief.  As Sgt. Esterhaus said best, “Let’s be careful out there.” And, beware that the tale of an ill-advised joint return may come with a tail of never ending tax obligations.