Tag Archives: law

Child Support and Taxes

Tax season is upon us and I’ve been getting a lot of questions about child support and taxes. First, Colorado child support is generally not taxable. Unlike maintenance/alimony, the payor of child support cannot deduct paid child support from their taxable income. Similarly, a parent receiving child support need not report that money on their tax return.

Second, a minor child can be claimed as a dependent on a parent’s tax return. Who gets the dependency exemption? Pursuant to C.R.S. 14-10-115(12), the Colorado court is required to allocate the right to claim a child as a dependent in proportion to the parents’ contributions to the costs of raising the child. If a mother has more parenting time than the father and she pays for the child’s sports, tutoring, health insurance, daycare, etc., the court will likely give her the right to claim the child as a dependent.

Nevertheless, the parties can always voluntarily agree on which parent gets to claim a child in a particular year. Although Colorado has done away with the term “custody” in favor of “parenting time,” the IRS predictably is behind the times. The “custodial parent” matters for IRS purposes and is defined as the parent with the most overnights. Because there are an odd number (365) of days in a year, one parent will almost always have more than the other even when they are “50/50 parents” or have “equal time.” That parent is then the “custodial parent” under the current IRS regs and the one eligible to claim the child as a dependent. There are times when the IRS regs conflict with the Colorado law on who gets to claim the child as a dependent. As a result, it is usually a good idea for parents to sign IRS Form 8332 along with their divorce or allocation of parenting rights agreements to ameliorate any issues down the road if the parties agree to split the right to claim a child on future tax returns.

In addition to the dependency deduction, the current tax code allows for a separate deduction for work-related day care and a credit (different from a deduction) for each child. The rules on those deductions and credit are complex because they hinge on the taxpayer’s income and other factors. Tax laws change all the time and my advice is always for a client to consult with a CPA or tax attorney before signing a deal.

Although parties going through a Colorado divorce or dispute over parenting rights often times will disagree about the color of the sky on particular day, there are times when it makes sense for them to strategically work together on taxes. For example, if one parent cannot benefit from the tax credit because they make too much money, they can offer to give the other parent the right to claim that child and split the amount of the credit. It results in a “win-win” for both parents. It is rare to characterize anything as a “win-win” in a Colorado divorce or when discussing anything related to taxes, but it is possible if the parties have thoughtful divorce lawyers and CPAs.

Letter to Town of Basalt

The Aspen Daily News has a story today on the revised demands of the Workers for Justice and Diversity in Basalt. Yesterday I posted WJDB’s official statement.

The letter I wrote yesterday to the attorney for the Town of Basalt, Tom Smith, is below in its entirety. One thing to note is that I am ethically prohibited from contacting Town Manager Mike Scanlon or others at Town Hall directly because they are represented parties.

Tom,

It is disheartening to read in the Aspen Daily News today that the Town has decided to punish our clients for hiring an attorney. There is no ethical, moral or legal principle to support the Town’s refusal to speak with our clients. The glaring problem with that strategy is that Section 16-418 requires relocation assistance regardless of whether a resident is represented by legal counsel. If the Town refuses to pay our clients, then 45% of their homes will need to be replaced.

As I’ve repeatedly said and wrote, we’re not a law firm that shoots first and aims later. We do not want to file a lawsuit against the Town or the Roaring Fork CDC. However, there are a number of legal issues that arise because of the Town and the CDC’s own actions. For example, there is a potential claim of promissory estoppel for our clients. And there is also a possible ex post facto issue with Section 16-418 that we have yet to fully examine. That said, we have held off on drafting a complaint with the hopes that the Town would work with us. The below assumes that the Town will realize its mistake in cutting off communication with our clients and work with us to find a solution for this unfortunate situation.

First, Fidel Castillo and Maribal Canas have mobile homes that can be moved. The rest of the residents are in trailers that, for various reasons, cannot be relocated. We look forward to working with the Town to find vacant land for Fidel and Maribal, and proper alternative housing for the rest. As you know, Section 16-418 has a presumptive formula. To date, the Town has taken the position that there can be no deviation from that formula. However, that position is not supported by the language of Section 16-418.

The value of the home, whether it can be moved and who pays for the relocation or demolition of a home are certainly relevant factors. They aren’t the end of the analysis. The Town Council can consider “unusual circumstances” that justifies additional compensation. See, e.g., Section 16-418(b)(1)(B). We are in the process of putting together our reasons why each resident deserves additional compensation, but as a general matter, we can say that these reasons will include being elderly and having a more difficult time moving, having children of school-age, having long-term ties to the Pan & Fork, having larger families that make moving to suitable other housing difficult, and other similar circumstances. Those reasons are separate from the issue of whether they were promised alternative/replacement housing that has yet to come to fruition. The very fact that these persons have made the determination to seek legal representation and to let the Town know that they do not believe the formula to be sufficient may constitute “unusual circumstances” in and of itself.

You have previously stated in the paper that the Town has a moral, ethical and legal obligation to treat our clients the same as previous residents who have already relocated. Your statement is contradicted by the Town’s statements that they recognize that each individual has their own particular circumstances. It is also contradicted by the Town’s position as stated in today’s Aspen Daily News. As a practical matter, it makes no sense to treat each person the same, not least of all because the persons that previously accepted relocation assistance may have done so without full knowledge of their other options. From our view, getting this matter resolved in a cooperative fashion will require an acknowledgement by the Town that they need to view each resident as a person and not just part of an arbitrary equation.

Second, all of our remaining clients have children that are currently in school. One of our chief concerns for these children is that the threatened eviction on April 1 comes at a time when school will not yet be out of session. Switching to another school that late in the year will unnecessarily inflict a severe hardship or even potential impossibility on these children’s ability to maintain their all-important education. Certainly, when the Town signed the construction contracts for April 1, it knew or should have known that it would have severely adverse impacts on these children. For this reason, we request that, at the very least, the Town agree in writing to extend the leases or to refrain from attempting eviction procedures until Friday, June 13, 2014, which is 9 days after the end of the school year. This will give these children and their families sufficient time to first concentrate on their education and then prepare for moving, if they must move at that point. We also believe that this school-year issue raises issues of “unusual circumstances” that could be addressed through the dictates of the ordinance.

As repeatedly stated, both in this missive and elsewhere, we do not want to engage in needless litigation and truly hope to work with the Town. However, in the event that our clients are forced to fight their evictions, one key component of that battle will be the school issue. Regardless of whether litigation is necessary, the court of public opinion will likely not look too kindly on the Town’s decision to evict children during the school year.

As you are aware, in any action under the Mobile Home Park Act (including attempted eviction), the prevailing party is entitled to attorneys’ fees and costs.  Given that our clients will have compelling defenses to an eviction action, including an equitable or promissory estoppel theory and based on the issues raised by interruption of the school year, the Town will have to consider its potential exposure to fees and costs. It is our understanding that the Town paid a significant amount of attorneys’ fees for its battle with the Aspen Times; we hope the Town does not make the same mistake twice and waste funds that would otherwise be used for affordable housing or relocation assistance. Of course, none of that will be necessary if we can find common ground and help these people move in a fair and timely manner.

Third, I have a number of concerns with the attached “Weekend Update” from Mike Scanlon. The suggestion that any of my clients or I are unwilling to work with the Town is inaccurate. If anything, your lack of response to my overture to settle last week and combative correspondence indicate that it is the Town that refuses to work with my clients for no other reason than they question the Town’s methodology. Moreover, Scanlon says that the residents will be offered less because they have hired us. That statement is puzzling because, as noted above, there is nothing in Section 16-418 or the leases you provided or elsewhere that supports offset. If you have support for the concept of offset, please let us know.

Contrary to the representations that Mr. Scanlon made to the Aspen Daily News and you appear to have made to the Town Council, litigation is the last resort for our clients and would only be necessary if the Town remains as inflexible as it appears to us. Cooperation and compromise are two-way streets and right now we feel that we are walking the wrong way down your one-way street. As appearances may be deceiving, please let us know if we are reading the situation incorrectly.

Most concerning is the disconnect between Mike Scanlon’s statement that he would stake his professional reputation on getting our clients into affordable housing and the Town’s commensurate refusal to reduce that promise to writing. As you know, a promise need not be in writing and we believe that Mr. Scanlon’s statement to that effect (and others like it, either in the press, in Town Council meetings, or directly to our clients) constitutes a promise, the breach of which is actionable.

Again, since we want there to be no confusion, it is not our first or even second intention to engage in litigation. On Friday, I asked you to provide me the contracts for Jose Ramos. We are trying to advise him of what he’s signing so he can do what the Town wants: voluntarily leave the Pan & Fork. It is completely illogical for the Town to now refuse to work with us to help Mr. Ramos move. We hope the Town will reconsider it’s position so that at least Mr. Ramos and his family can start a new chapter in their lives.

In sum, our representation of WJDB is centered on one principle: to make sure that our clients are being treated fairly and are given the best help possible under the circumstances, whether monetary or otherwise. You and the Town appear to view our involvement as a threat, but our presence should not be concerning to the Town unless the Town is attempting to act in an untoward manner. By failing to consider alternatives, the Town is creating an issue where one need not exist.

We understand that the position of the Town is that no promises were made to our clients regarding affordable housing. Our clients certainly do not agree with this position, but perhaps that is beside the point for the moment. The Town is acting in a way that is consistent with a promise to provide affordable housing or relocation assistance. If we can capitalize on that momentum  and work together to determine solutions that meet the disparate needs of our clients, we will be able to avoid conflict and move forward in a way that is beneficial to everyone.

Best, Ryan

DUI, Divorce and Marijuana Laws in 2014

Welcome to 2014. New laws are now in effect for Aspen DUIs and Vail DUIs, especially how those cases are handled with the Colorado DMV. Read more here.

In addition, those filing for divorce must aware that Colorado now has a significantly different law on how maintenance/alimony is analyzed in 2014 and beyond. Make sure your Aspen divorce lawyer knows about the change. To see more about the amendments, click here.

Finally, as has been widely reported in the news, recreational marijuana is now perfectly legal in Colorado. By all accounts, the transition went smoothly. There are no retail marijuana stores currently open in Garfield County or Aspen. They are coming, though.  Contrary to other mountain communities, both Vail and Eagle County are holding off on allowing recreational marijuana for now.

We are in the midst of Aspen’s prime tourism season. It will be interesting to see the effect of “marijuana tourism” in Aspen next year.

New Colorado DUI Laws for 2014

Starting  Jan 1 next week, several new laws  go into effect for DUIs in Colorado. First, a driver will be able to challenge the basis for a police officer’s stop at a DMV hearing. I’ve written before about DMV hearings, but have yet to cover a terrible case – Francen v. Colo. Dept. of Revenue – from July 2012 for those accused of drunk driving.

In Francen, the Colorado Court of Appeals held that the legality of the police officer’s initial stop was irrelevant for determining whether a driver’s license should be suspended. As a result, a driver had little hope other than an officer skipping a DMV hearing in keeping their license.

The new law, C.R.S. 42-2-126(8)(h) & 42-2-228, overrules Francen and allows a driver to contest the validity of the initial stop. Among DUI lawyers, the law is called the “Francen Fix.” An example of the Francen Fix can be seen with a previous DUI case I worked on. My client still lost her license at the DMV hearing even though the criminal case was completely dismissed when I persuaded the Eagle County Judge that there was no “reasonable suspicion” for the Basalt Police officer to pull her over. The Francen Fix would have likely resulted in my client keeping her license.

The second change coming in 2014 is the “Interlock Bill.” Offered as House Bill 13-1240 and signed by Governor Hickenlooper at the end of May, the Interlock Bill gives some hope to those that refuse a chemical test when arrested for drunk driving. I’ve already covered Colorado’s Expressed Consent and authority for revoking a driver’s license.

As it stands today, a person that refuses a chemical test when arrested for their first DUI will lose their license for a year. There is no opportunity for a driver who refuses to get a probationary or restricted license. Draconian, I know. However, the new Interlock Bill  offers some breathing room in 2014 because a first-time refusal will allow a driver to apply for reinstatement after two months of no driving. The early reinstatement comes with a catch: the driver will have to install and use an interlock device for 2 years following reinstatement. These drivers are designated by Colorado law as “persistent drunk drivers.”

The Interlock Bill, which amends C.R.S. 42-2-132.5, also provides that a separate suspension for a conviction of DUI will run concurrent to a suspension for a refusal. A refusal and DUI each may result in revocation of a driver’s license. Previously, those suspensions would run consecutive, or stacked on top of one another. A driver that refused and was also convicted of DUI faced the prospect of a 2-year suspension. In 2014 and beyond, that same driver will likely be facing a 1-year revocation with the option to reinstate early using an ignition interlock device.

Finally, the Interlock Bill  lowers the bar for “persistent drunk drivers” who take a blood or breath test as part of a DUI. In 2013, a driver with a BAC over .170 is tagged as a persistent drunk driver and required to have an ignition interlock  device to drive for  2 years. Starting next week, a driver with a BAC of .150 will face that same penalty.

We’re in the midst of the holiday season. In the hoopla of celebrating, people make mistakes. If you’re accused of drunk driving and looking for an Aspen DUI attorney or a Vail DUI attorney, make sure they are familiar with the new changes to Colorado law.

Parental Relocation in Child Custody Battles

As noted previously, Bode Miller’s ongoing child custody saga provides a good backdrop to analyze Colorado law for relocation cases. A brief summary of Miller’s situation is necessary.

Miller and Sara McKenna briefly dated in the spring of 2012 in California. She got pregnant in May, which, coincidently, was the same month that Miller married another woman. McKenna decided to go to college and sent Miller a text in October: “Just a heads up, I met with an advisor from Columbia [in NYC] today and we will probably be moving there in the fall.” Before the baby was born, Miller filed a “Petition to Establish Parental Relationship” in California. McKenna moved to New York in December when she was seven months pregnant. Their son was born in New York and the legal wrangling over custody began.

While there are complicating jurisdictional issues between New York and California in Miller’s matter, at its core, the case is about a parent’s right to relocate with a child. These types of cases frequently come up in divorces or general child custody disputes in places like Aspen or Vail because of the high cost of living. Parents going through a divorce realize that living alone is more expensive and challenging in terms of a work-life balance. Often times a parent will determine that moving closer to family or a less expensive area is necessary even though it will result in the other parent having significantly less time with the children.

In Colorado, relocation cases are separated into two distinct categories: (1) initial allocation of parental responsibilities and (2) post-decree modifications. For example, the analysis for a mother going through a divorce in Vail who wants to relocate to New York City is different than the same mother who wants to leave Vail five years later.

The former situation — where a parent is going through an initial allocation of parental responsibilities — is guided by Spahmer v. Gullette and C.R.S. 14-10-127. The latter — a post-decree relocation — is controlled by In re Marriage of Ciesluk and C.R.S. 14-10-129. The differences between how a Colorado court deals with these two scenarios will be the subject of my next substantive post.

Colorado Maintenance (Alimony) Threshold Test

Before a court even gets into the new Colorado spousal maintenance (alimony) guidelines previously discussed, a threshold test is applied. There are two prongs of the “threshold test” under C.R.S. 14-10-114.

Sufficient Property

First, the court must find that a spouse lacks sufficient property to provide for his or her reasonable needs. This means that a court must divide property in the divorce before turning to the issue of maintenance. If a spouse is awarded an income-producing asset, such as a rental property, they are less likely to need maintenance/alimony from the other party. However, a spouse is not required to sell or consume property awarded to them before being entitled to maintenance.

What does “reasonable needs” mean? It depends on the particular circumstances of each case – an inherently squishy and debatable concept. The standard of living established during the marriage is a relevant factor. A marriage where frequent travel and fine-dining were enjoyed is different than a spartan one. The reasonable needs will be based on the present circumstances at the time of the hearing rather than the past or future conditions.

Spousal maintenance is to provide the means to obtain food, clothing, habitation and other necessities. Colorado courts have taken a fairly expansive view of “reasonable needs,” and stated that it does not mean the minimum requirements to sustain life. Nevertheless, a court is not required to ensure spouses have an equal lifestyle forever.

The totality of the parties’ financial circumstances will also be considered. If a spouse is the beneficiary of a trust, that may be considered even though the trust is not “property” under Colorado law. The reasoning behind this rule is easy to understand – a party doesn’t need maintenance/alimony if they’ll be perfectly fine on their own.

Appropriate Employment

If property awarded to a spouse is insufficient to provide for their reasonable needs, the court will move on to the second part of the threshold test: employment. A person won’t need maintenance/alimony if he or she can support themselves on their own. Again, each case is different.

The court will determine what is “appropriate employment” for a spouse requesting an award of maintenance. The expectations and intentions established during the marriage will be considered along with the age, education, work history, health and of the requesting spouse. A court will also take into account if a person is voluntarily underemployed or completely unemployed. A famous Colorado divorce case (In re the Marriage of Elmer) involved an attorney that voluntarily quit practicing law and decided to pick apples at $10/hour. The court imputed income to that party based on his higher earning capacity.

The above is a brief summary concerning Colorado’s “threshold test” for awarding maintenance/alimony in a divorce. There are a number of other factors that a court will consider in a Colorado divorce where a party is requesting spousal maintenance. Those factors will be discussed in upcoming posts.

Colorado Civil Union Act: Is there a difference between a civil union and marriage?

The Denver Post has a fairly extensive article covering the recently-passed “Colorado Civil Union Act” that’s headed for Governor Hickenlooper’s desk. As the Denver Post headline notes a civil union for a same-sex couple is different from marriage. That difference is non-existent for Colorado domestic-relations law.

The Civil Union Act provides that a civil union in Colorado will be treated essentially the same as marriage for purposes of a dissolution, separation or annulment. For example, a same-sex couple contemplating a civil union can enter into a pre-nuptial agreement. See C.R.S. 14-15-108. Colorado case law interpreting marital agreements will apply to agreements relating to civil unions. C.R.S. 14-2-307.5. And a divorce between same-sex couples will be treated the same as a dissolution of marriage of a man and woman in Colorado. See C.R.S. 14-10-106.5 & 14-15-115.

Nevertheless, we will have to wait and see whether the Colorado courts interpret the Civil Union Act differently for purposes of parenting rights, disposition of property, maintenance and the like. There will likely be some unintended consequences and wrinkles in the law that will crop up in the future.

The other interesting legal issues are noted below:

·         There’s a privilege for communications between same-sex partners. See C.R.S. 13-90-107.

·         Same-sex partners are now entitled to damages for wrongful death, emotional distress and other personal-injury claims. 

·         Probate and estate-planning aspects for civil unions are also treated fairly similar as a marriage between a man and woman.

·         A right to claim a homestead exemption or seek protection against attachment, execution and garnishment of property.

UPDATE (March 21): The Civil Union Act was signed into law today by Governor Hickenlooper.

Bailey v. United States

In Bailey v. United States, the US Supreme Court recently clarified its ruling in Michigan v. Summers (1982), which allows law enforcement officers to detain persons near or at a place subject to a search warrant, as limited to people in the immediate vicinity of the premises. The Supremes seem to be narrowing the broad discretion given to police officers in searching people and places under the Fourth Amendment in each case it considers.

For more analysis, check out SCOTUS.