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Can you get a divorce for free?

In all honesty, a divorce can be expensive.  Clients often ask me for for guidance as they plan for the financial cost of their divorce. I read a report that estimated the average cost of a contested divorce to be $15,000, per party.  Based upon 13 years of experience, I would say that is an accurate figure for a contested divorce in Florida.  Uncontested divorces can be a fraction of that cost (like a 1/10 fraction).  Money is tight enough with the parties taking on all of the household bills that were previously shared, so uncontested divorces are always preferred. However, for various reasons, the parties are often unable to reach an agreement and file the divorce as an uncontested case.

How will these parties, who are already strapped for cash as they go about setting up separate households, pay the fee for legal services? And how will they pay for litigation costs, such as filing fees and depositions and the normal costs of a diligent representation? How much time will you need to take off from work in order to litigate the case, and what will that cost? There is no consistent answer to these questions.  Some of my clients clients simply pay with stored away cash.  Others borrow money from relatives, put the fees and costs on credit cards or have relatives front the costs.  However, if none of these options are available, can you force your spouse to pay for a contested divorce?

In Florida, attorney’s fees cannot be awarded unless authorized by statute or agreement of the parties. Section 61.16, Florida Statutes, governs the apportionment of attorneys fees and costs in divorce cases.  It states, in part:

(1) The court may from time to time, after considering the financial resources of both parties, order a party to pay a reasonable amount for attorney’s fees, suit money, and the cost to the other party of maintaining or defending any proceeding under this chapter, including enforcement and modification proceedings and appeals….

This provision is designed to ensure that both parties have a similar ability to obtain fair representation for their divorce. This requires a two-step analysis.  First, Florida judges must consider the financial resources of the party requesting attorney’s fees as they determine whether there is a need to award attorney’s fees.  If a need exists, the court will proceed to the next step.  Secondly, the court will consider whether the other party has an actual ability to pay an attorney fee award.  If the requesting party meets both of these tests, he or she may be able to obtain attorney’s fees and costs from your spouse and force them to pay for a contested divorce.

Attorney’s fees and costs can be awarded at any point in the case.  The court can award suit monies to finance ongoing litigation at any point during the case, or the court can award attorney’s fees and costs at the end of the case.  In either event, you will likely have to pay for the cost of the divorce until such time as a judge forces the other party to pay your attorney’s fees and costs.

Ashley Madison in Florida Divorce Cases

By now you have certainly seen at least one headline stating that private data from Ashley Madison, a web-based service that assists married people to cheat on their spouse, was released to the public. Reports suggest that the information includes names, email addresses, credit card information, and sexual preferences for tens of millions of personal profiles across the country.

If you are a Florida resident, and you or your spouse are found among the lists of people who were utilizing Ashley Madison’s services, what does that mean if you or your spouse file for divorce?

No doubt, infidelity is a very common reason people file for divorce.  However, Florida remains a “no-fault” state.  Therefore, Florida courts do not generally care whether one of you cheated on the other.  But that does not mean cheating is irrelevant to your divorce.  For various reasons, infidelity can affect the outcome of the divorce.

First, if the cheating spouse wastes money on an affair, the expenditure may be deemed “intentional dissipation” or “waste” of marital assets. If so, during the equitable distribution of property, the innocent spouse may be entitled to a larger share of the remaining marital assets. Second, the amount of alimony, if awarded, may be affected by infidelity.  Third, obviously, cheating can affect the credibility of a spouse in a court proceeding.  Finally, cheating, and any other illegal behavior, may call into question the moral character of the disloyal spouse. Under Florida Law, a court’s assessment of moral character can affect how the Court assigns parental responsibility and time-sharing.

Evidence that you or your spouse utilized Ashley Madison’s service may not be admissible.  Proper foundations for the admission of evidence must be laid and, so far, the source of this information is weak at best (hackers).  On the other hand, other evidence, including credit card statements that are discoverable under Florida’s mandatory financial disclosure laws may provide evidence to prove adultery or waste of marital assets. You should consult with an attorney in your state regarding what evidence may be applicable in your case or if you have any questions about the information found in this blog post.

How to Qualify for Medicaid (and keep your property): Part II

The asset and income restrictions on Medicaid benefits are what bring a great many people to an elder law attorney.  The applicant meets the age, citizenship and other basic requirements for Medicaid benefits, but they nevertheless can’t be immediately qualified because of the limitations on what an applicant can own or earn while receiving Medicaid benefits.  So, what are these limitations?

Asset Limits

Generally, Medicaid applicants are limited to $2,000 in countable assets. Moreover, if the applicant is married, the applicant’s spouse (who may not be going to live in a long-term care facility) is limited to $119,220 in countable assets for the year 2015. If both spouses need Medicaid, their asset limit is $3,000 total or $1,500 each.

And there’s another problem.  With certain exceptions, if the applicant has transferred property or funds in the past five years, that property or those funds are counted in the Medicaid application. The idea of the look-back period is to prevent people from hiding assets or income in order to qualify for Medicaid (in other words, to ensure that Medicaid is only paying for people to have nursing home care if they truly need it).  However, for those who did not foresee a need for long-term care, this provision can be a major hurdle when seeking long-term care.

An applicant must disclose transfers of assets or income made during the look-back period if the transfer was for less than fair market value or was a gift.  Any transfer for less than fair market value or an uncompensated transfer is presumed to be for the purpose of becoming eligible for Medicaid, and can be counted against the applicant as a penalty.  Transfers that occurred more than five years before the application is completed will not be counted against the applicant.

Penalties for transfers are calculated as a function of the average cost of a nursing home in the State of Florida.  For example, assume the applicant gifted $15,990 in funds or property to a grandchild within five years before the application was submitted.  The average cost of a nursing home in the State of Florida is $7,995 per month.  Therefore, $15,990 divided by $7,995 equals 2.  In this example, the applicant will be penalized two months, and will not qualify for Medicaid benefits until the penalty period is complete.

Exempt Assets

An average person or couple has a home, cars and various other property that they accumulate in everyday life.  The average value of such assets will easily exceed $2,000 in value, and typically will range between $300,000 and $700,000 for middle income couples and retirees.  Do the Medicaid limits mean that mom or dad will lose everything to get the care they need in a nursing home or assisted living facility? Fortunately, various asset exemptions exist to allow applicants to keep some or all of their assets.

  • Homestead:  The homestead, with contiguous acreage, is exempt up to $552,00 in value (for 2015) as long as the applicant intends to return home or the applicant’s spouse continues to reside in the home.  Verification of intent to return home may or may not be required.
  • Personal Property:  Applicants may keep one wedding band and an engagement ring.  Generally, all personal property is exempt as long as it does not include valuable assets such as art, jewelry, or collectibles.
  • Motor Vehicles:  One car of any age, and any motor vehicle that is seven years old or older is exempt.  Cars modified for use by a handicapped individual are exempt as well.
  • Life Insurance:  All life insurance policies with a combined face value of $2,500 or less MAY be exempt if a separate burial fund has not been established.  Life insurance policies are also exempt if they are term policies or they have no face value.  If a policy exceeds the asset limit, the applicant may cash it in or borrow against it.
  • Burial Fund:  The applicant (and spouse if there is one) may have a burial fund in the amount of $2,500 if a life insurance policy has not been designated as the burial fund.
  • Burial Plan:  Burial plans are exempt in any amount.
  • Income Producing Property:  Income producing property is exempt as an asset if it meets certain criteria.  This exemption is significant in a state like Florida, with a great many vacation condos and beach homes.  However, income received from the property counts as income (discussed below).
  • Unavailable Real Property:  Real property can be unavailable for many reasons.  For example, if it is jointly owned with a third party and the third party refuses to sell the property, it is considered unavailable.
  • Annuities:  Although income received from the annuity would count as an asset, the principal or annuitized amount is exempt.
  • IRAs and 401ks:  May be exempt if the applicant is receiving their required minimum distributions.  The principal of the accounts is exempt as an asset but the minimum distributions will count toward the applicant’s income.

If a person has property or funds that do not fall within these exemptions, various tactics may be utilized to preserve the property or funds.  A personal services contract may be created to ensure care by a relative and thereby isolate funds, an irrevocable non-assignable annuity can be purchased, or funds may be used to improve the homestead and thereby funds can be merged with the homestead exemption discussed above.  Each case is different but you and your attorney can decide the best course given your individual circumstances.  The key is to plan early to avoid disqualification under the five year look-back period.

Income Eligibility

To Qualify for Medicaid benefits an applicant’s gross income must be less than the income cap. The income cap is three times the Federal Benefit Rate, which for 2015 is $733.  Therefore, the total income cap for 2015 is $2,199.  However, even if the applicant earns more than the cap, an elder law attorney can establish a Qualified Income Trust (QIT)  to defeat this limitation.  A QIT is a trust that holds the applicant’s income.  At the applicant’s death, the State of Florida will be paid the balance of the funds remaining in the QIT up to the amount of the Medicaid lien (the amount owed for long-term care services).  Any remaining amount can then be disbursed to the beneficiaries of the QIT. QITs must be approved by an attorney from the Department of Children and Families (DCF), which oversees the Medicaid program.

Estate Recovery Rules

Under Florida law, the State of Florida may recover from the estate of the deceased applicant the amount the State paid for medical services on behalf of the applicant. A Statement of Claim is filed in the applicant’s probate estate and the State becomes an interested party in the probate proceedings.  The debt is discharged after two years if no claim is filed.

If you are considering your options in filing for Medicaid benefits, or are concerned about financing long-term care for a loved one, consult with an elder law attorney about your options. Even if you are not actively seeking Medicaid qualification, early planning for that contingency is crucial.

Next, we will discuss Medicaid planning through trusts to secure and protect assets.

How to Qualify for Medicaid (and keep your property): Part I

Given the limitations on what a person may own to successfully apply for Medicaid, families often conclude that mom and dad will have to forfeit everything they own in order to qualify (to get mom or dad in a nursing home, or otherwise get the care mom or dad will need).  When I first heard about the “spend down” tactic as a way to qualify for Medicaid, I was horrified to realize that we as attorneys, in certain circumstances, are actually having to advise people to spend or transfer what they have in order to get into a nursing home.  Regardless, with proper planning, this result can be avoided.

This will be the first of several installments to provide general guidance on how to protect your property and funds while qualifying for Medicaid.

Before discussing the asset restrictions, some basics about Medicaid need to be discussed, such as: What is Medicaid? The Health Insurance Association of America describes Medicaid as a “government insurance program for persons of all ages whose income and resources are insufficient to pay for health care.” (America’s Health Insurance Plans (HIAA), pg. 232). Medicaid is the largest source of funding for medical and health-related services for people with low income in the United States.  When I first read that definition, I was a bit put off because it sounds like a program for people who are really poor.  But, as with many issues in life, it’s all relative – you have to have a standard to measure the need for Medicaid benefits.  That standard can be understood with one number: $8,000.00 per month.  That is the average cost of nursing home care in the State of Florida.  Obviously, many people will have income and resources that are “insufficient” to pay for health care by that standard.  Without long-term care insurance or independent wealth, Medicaid will be needed to pay for long-term care, such as nursing home or assisted living arrangements.

Before you can even get to the property or financial requirements imposed by the Florida Institutional Care Program (ICP) Medicaid, certain preliminary requirements must be met, including:

  • Age: Must be 65 or older, or otherwise blind or disabled;
  • Citizenship: Must be a U.S. citizen or a qualified noncitizen;
  • Resident: Must be a resident of Florida;
  • Medical Eligibility: The applicant must have medical needs that require a type and level of care that is provided by a nursing home (a person who only needs assisted living will not qualify for a nursing home).

In the next installment, we’ll begin a discussion of resource eligibility, including asset limits that must be met in order to qualify for Medicaid.

Financial Disclosure in High Net Worth Divorce

Financial and Asset Disclosure in a Florida Divorce

A party to a divorce must disclose their financial condition, including all real property, personal property, retirement accounts, household furnishings, bank accounts, antiques, collectables, business interests and other forms of property and income.  In a high net worth divorce, assets may be more difficult to value.  Therefore, it is often necessary to employ accountants, appraisers and other professionals to value stock options, artwork, antiques or collectibles.

One spouse in a divorce may have a high level of sophistication concerning financial matters.  Also, that spouse may attempt to hide assets or cash in a business entity or through sham financial transactions.  On the other hand, some spouses are simply malicious.  Regardless of their understanding of the financial disclosure requirements, they may refuse to disclose all of their financial holdings or property interests despite the requirements imposed by Florida law.

When a divorce is filed, as a matter of standard procedure, the court will issue an order prohibiting the parties from transferring or alienating marital property without the consent of both parties, until further order of the court.  Marital property, as a general rule, is any property obtained during the marriage.  Exceptions apply for various circumstances, such as property obtained through a bequest or devise from the spouse’s family.  Regardless, the parties must comply with mandatory financial disclosures under Florida law.

When a spouse fails to comply with the legal obligation to disclose all financial holdings and dealings under Florida Family Law Rule 12.285, we use the full range of discovery tools to expose unreported, hidden or diverted assets and income.  Techniques include:

  • Demands for Production – Florida rules allow a party to file Requests to Produce. A production request is a document filed with the court and served on the other spouse that includes a list of requested documents. The spouse that receives the production request must comply with the request within a relatively short time.  It is important to submit requests to produce early in the case in order to ensure assets and funds are identified and protected.  When the spouse fails or refuses to comply with the production request, a Motion to Compel can be filed and the spouse will be forced to disclose the requested information. If the spouse continues to fail to comply, sanctions can be imposed for noncompliance.
  • Deposition of a Spouse – A deposition is a testimonial proceeding conducted outside the courtroom. Everyone shows up at an attorney’s office, the office of a court reporter or other appropriate location. There is no judge present but the deposition is an official proceeding. A deposition is an opportunity for the spouse that is trying to find hidden assets to conduct a detailed examination of the other spouse. Depositions can expose lies or inconsistencies. Depositions can also provide sufficient information to conduct a more detailed search for assets through other means.
  • Requests for Admission – A Request for Admission puts someone under a legal obligation to either admit or deny an important financial detail. If someone denies a fact and it is later proven to be true– they can be responsible for attorney fees. Failure to respond to requests to admit can cause the facts to be deemed admitted.
  • Interrogatories – Interrogatories are formal written questions directed to a spouse to discern financial information. The respondent typically has 30 days to provide the answers. Interrogatory answers tend to be well planned out and end up being almost useless to the case.
  • Subpoenas – Record Subpoenas are documents sent to employer’s, financial institutions, medical providers, and businesses. Whoever receives a subpoena is under a court order to provide the requested records.
  • Forensic Accounting – Accountants can provide an expert analysis of a spouse’s income and financial resources. Attorneys and judges are often ill-equipped to process complicated financial transactions or holdings, but an accountant can streamline and simplify information for use at court.  Expenses for a forensic accounting commonly range between $5,000 and $15,000, but for those involved in a high net worth divorce, the loss that could be incurred by not employing an accountant can be much higher.

After gaining the necessary records, a careful analysis is required.  Tax returns, profit and loss statements, bank records and 1099 documents are checked for discrepancies, improper transfers, undisclosed income and improper liquidation of marital assets.  Once this analysis is complete, a comprehensive and accurate picture of the parties’ financial circumstances can be determined.  Accordingly, financial relief can be sought.

The Most Common Form of Financial Disclosure

Every Florida divorce case requires each spouse to file a financial affidavit. The affidavit is an overview of relevant financial information. The financial affidavit is a detailed listing of each spouse’s income, expenses, assets, and liabilities. No filing should be necessary to compel the filing of the financial affidavit; it is required by Florida Rule of Family Law 12.285 and it cannot be waived by the parties.

For a spouse that is hiding money or assets, the following issues tend to come up in their financial affidavits:

  • Reported gross income that does not match their payroll
  • Reported expenses that do not exist
  • Assets that are undervalued
  • Net deficits every month that do not result in building debts
  • Debts with no supporting documentation

Diligent and Experienced Representation

A diligent and experienced attorney, and a concerned client, are the keys to overcoming financial issues in a divorce case. The key to finding hidden assets is to spot inconsistencies in financial disclosures or patterns in financial dealings that do not coincide with other available information.  Many tools are available to assist divorcing spouses in this process, but they must be utilized properly and aggressively throughout the divorce.

Is it legally improper, or just bad etiquette to serve divorce papers through Facebook?

In order to obtain a divorce, the defendant spouse must first be served with a copy of the divorce complaint. Traditionally, this has been accomplished by a sheriff or private process server.  In some cases, this can be completed by certified mail. However, like everything else, the legal system has evolved with the proliferation of email as a preferred method of communication. Now, with the advancement of social media, things may be changing again.

A New York judge has apparently ruled that service of a divorce complaint can be provided through Facebook. And let me be clear: I like the idea! Seems harsh to use a social media platform to accomplish something that certainly will not be “liked”, but this is the method by which many people communicate these days. Indeed, I’ve seen several divorces that were caused due to a spouse’s inappropriate activities on Facebook, so why not serve that spouse with a divorce complaint through Facebook?

To be effective, service should reasonably apprise the defendant of the action that is pending against them.  A Facebook message can accomplish this goal just as effectively as traditional means of service, and far more efficiently than paper ever could.  It certainly will not be proper in every case, but it could be proper under the right circumstances.  I know of no cases supporting Facebook service of a complaint in Florida or Alabama, but don’t be surprised to hear about it soon.

The complete text of the New York decision can be found HERE.

Adopting a Foster Child

Adoptive children come from many sources. Some come from within a family, some from foreign countries on the other side of the world and others come from state protective agencies such as the Department of Children and Families in Florida, or the Department of Human Resources in Alabama. Children are placed in foster care due to some set of circumstances that usually stems from the parents’ inability or unwillingness to provide adequate for the child.  Foster parents open their homes, and their hearts, to children who otherwise have nowhere else to go.

Thousands of children are in foster care around the country, including Florida and Alabama, and they are awaiting one of two results.  The first option is for their parents to get it together and regain custody. The law of every state prefers this option due to the fundamental rights parents enjoy with respect to their children.  The second option is for the court to determine that reunification with a parent is not possible and to terminate the parents’ rights, and set the stage for an adoption by a foster parent.

Not every foster parent is seeking to adopt a child.  Many people become foster parents simply to help children in need.  Others become foster parents for the specific purpose of adopting a child that is placed in their home.  The state will provide financial assistance to support the foster home while the child is placed with a foster parent.  The foster parent maintains physical custody but the state retains legal custody and ultimate authority of where the child is placed.

Any person who considers adopting a child from foster care should understand that parents enjoy a strong legal preference for custody. This preference can be very frustrating for a foster parent who wants to adopt quickly.  There is not only a possibility, but a preference, to return custody to the parents.  Many foster parents who accept a child into their home wrongly assume that the adoption process will begin immediately. Nothing could be further from the truth, since various services will be offered to the parents who may be attempting to rehabilitate themselves, and a substantial amount of time will usually pass before the court can even consider a termination of parental rights.  In Florida, termination of parental rights is a necessary precondition of adoption in all adoption cases even if the child is not in foster care.  That is not the case in Alabama, but if the child is in foster care then an Alabama juvenile court must terminate parental rights before the child can be removed from the state’s legal custody.  The process of terminating parental rights can take up to two years, or longer, to complete.  If an appeal is filed, the process can take considerably longer.  In any event, foster parents should be prepared for the child to be returned to the parents if rehabilitation is successful.  Even if it is not successful, a foster parent should be prepared to wait quite a while before an adoption can be sought.

Whether that process is right for you will depend on your level of patience.  The emotional attachment that foster parents form with their foster children will not be mitigated by legal procedures or an understanding of the constitutional rights afforded to biological parents. However, If you are willing to be very patient, and are willing to help a child in their time of need while accepting that an adoption may not be the end result, then this process may be right for you.

For more information about adopting a foster child in Florida, click HERE.  For information about adopting a foster child in Alabama, click HERE.

Mo’ Money, Mo’ Problems (sort of)

Borrowed Genes

Today I talked to two different adoption consultant companies, Laura atFaithful Adoption Consultants and Shannon atChristian Adoption Consultants. I wasn’t looking exclusively for Christian organizations but these two had the best reputations by far for adoption consultants, (please note, consultants are not the same as facilitators, which are illegal in many states) and it was easy to see why. After speaking with both these ladies my heart sort of sank into my stomach because I realized that this is what our adoption journey could have looked like if I had chosen better. I didn’t know there were different ways you could expect to be treated by an agency. Now I do.

I enjoyed speaking with them both because they both validated what I knew to be true, that this journey the hubs and I have been in is abnormal, and not a good representation of what adoption…

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Elder Law: Florida Legislature Reins in Guardians

Elder abuse can take many forms, but those forms are never open or obvious.  Incidents of financial abuse almost always begin with relatives or friends who claim to have good intentions to help elderly individuals who are in poor mental or physical condition.  The following article is a good look at the issue, and some steps the Florida legislature is taking to help avoid misconduct by court appointed guardians.  Click the link below…

Legislature takes steps to rein in guardians.

Legislature takes steps to rein in guardians