Author: Amy Edwards

The ABCs of College Expenses in North Carolina

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First Things First. When Does Child Support End?

The age of majority in our state in age 18, and child support obligations generally end when a child reaches that age. There are several exceptions to that rule. Support ends when a child is emancipated (by marriage for example) before reaching age 18. If a child is 18 but has not yet graduated from school, support continues until the child graduates or ceases to attend school on a regular basis, fails to make satisfactory academic progress towards graduation, or reaches age 20, whichever comes first. The court does, however, have the ability to terminate support at age 18 before high school graduation if he or she deems it appropriate. See NC Gen. Stat. §50-13.4.

When Do College Expenses Begin?

They begin based only on parental agreements. Because child support obligations end at age 18 or graduation, the court has no ability to order continuing support (i.e., college expenses). However, while there is no legal obligation for either parent to pay these expenses, they are free to enter into an agreement to address them. The agreement is frequently a separation agreement, which the court will enforce. When parents obligate themselves to be responsible for college expenses, the obligation is not only enforceable against the other parent. The obligation is enforceable by the child against one or both parents in the event a parent fails to abide by the agreement.

Considerations For Parents Negotiating College Expenses

How are “college expenses” defined by the parents?

Do the expenses include tuition, housing, books, transportation, insurance, etc.?

Can the parents truly afford to pay for college?

Will each parent be required to contribute a specific dollar amount, to be supplemented by the student taking on loans or working while in school?

Are there restrictions on which university or college, usually related to either in-state rates in North Carolina or out-of-state rates?

Will the same rules apply to all of the children?

Will one parent pay or both share the cost?

If both pay, what percentage of expenses will each parent pay?

Should the parents contribute to a 529 College Savings Plan, or pay expenses directly?

Does the agreement require the child to meet standards, such as earning a minimum GPA or living at home while in school?

Are there limitations concerning anticipated degree programs, such as a two-year degree or four-year degree?

 

Child Abuse and Neglect in North Carolina

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By North Carolina statute, anyone who has reason to believe a child is being abused must make a report to CPS (Child Protective Services).  This also applies to suspected neglect or dependency upon the state when a child is abandoned.  The identity of a person who reports suspected child abuse is sealed by the State so that the parent or caretaker of the child will not know who made the report to CPS.  As long as you have a good faith basis to report child abuse, you do not have any legal liability if CPS decides no abuse has occurred. The name of the person reporting is strictly confidential.

The policy of the law is to trigger an investigation into a child’s circumstances so CPS can prevent potential harm to the child, or remove the child from an abusive environment. People sometimes hesitate to report suspected abuse because they feel the parent will be punished.  Reporting doesn’t always result in a finding that abuse or neglect has occurred.  Upon receiving a report of suspected abuse, there is an investigation by social workers and/or other trained and licensed professionals. If the CPS investigation finds evidence there is abuse or neglect, a lawsuit may be filed and the parent will usually be entitled to an appointed attorney to represent him or her in the case. Parents are then given access to resources that give them tools for dealing with their inclination to abuse their child. Punishment is not the goal in these civil (non-criminal) courts. The constitutional rights of parents must be respected, just as they are in criminal cases.

What Counts as Child Abuse?

In a perfect world, there would be a simple definition for child abuse.  But we live in an imperfect world where it is necessary to include lots of examples of abuse as we try to define it. Taken together, this patchwork of situations creates the legal definition of child abuse in our state.  It gives you a flavor of the sort of thing you must report. Fortunately, you don’t have to figure all of that out because it is the task of the NC Department of Social Services through CPS to decide exactly what fits into the definition of child abuse or neglect. All you have to do is err on the side of caution and call CPS when you see abusive behavior or evidence that indicates a child is in danger. An abused child is one whose parent, guardian, custodian, or caretaker:

  • Inflicts serious physical injury by other than accidental means.  This includes an adult allowing someone else to inflict injury on the child;
  • Creates a substantial risk of serious physical injury to the child by other than accidental means (or allows someone else to create that risk);
  • Uses or allows . . .  cruel or grossly inappropriate procedures or cruel or grossly inappropriate devices to modify behavior;
  • Commits, permits, or encourages the commission of various sexual and obscenity offenses;
  • Creates (or allows to be created) serious emotional damage to the juvenile shown by the child’s severe anxiety, depression, withdrawal, or aggressive behavior toward himself or others; or
  • Encourages, directs, or approves of delinquent acts involving moral turpitude committed by the child.

What are the Signs of Child Abuse?

For the signs of suspected abuse, see the list on the NC Department of Social Services web site. If you suspect a child is being abused in Pitt County, call 252-902-1110 during the day, and 252-830-4141 after hours. There is also information about the basics of reporting suspected abuse in NC, offered by the TEDI Bear Children’s Advocacy Center.

Why Can’t We Use the Same Attorney If We Both Agree?

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This is a question I often hear during consultations. The potential client may say they agree on everything and don’t want to pay for a second attorney. Depending on the circumstances, there are at least two main reasons a family law attorney usually can’t take a case for both parties.

One reason is that representing both clients is a conflict of interest, or it creates the appearance of one. Another reason is that sifting through the case with an attorney uncovers a number of important issues that weren’t discussed between the parties.

What Is a Conflict of Interest?

A conflict of interest means divided loyalty. An attorney is required to zealously represent a client and act only in the best interest of that client. When that best interest of one party differs from, or conflicts with, the best interest of the other party, an attorney must choose which person to represent. Even taking on responsibilities that limit an attorney’s ability to fully represent the client is a conflict. In most family law cases, one person’s best case scenario is the other person’s worst case scenario. For example, if one spouse is seeking alimony and the other spouse is trying to use legal defenses to avoid payment, there is a conflict of interest. The State Bar has strict rules about an attorney’s ability to represent more than one party so the lawyer’s responsibility is only to one. Even when parties are in agreement about the outcome of the case and want a separation agreement, there are negotiations after the other spouse gets a copy of it to review. Your attorney cannot answer legal questions by the other spouse or give any legal advice to your spouse. Your ex should choose an attorney to advise him or her about the case.

What Else Matters Beyond the Agreement We Have?

Clients tend to think that once they address child custody or support, the house they own, or the payment of certain bills, they are finished with the unpleasant task of legally wrapping up a separation. A client may be disappointed to discover there are numerous topics he or she did not discuss with their ex. Many clients don’t stop to consider the tax implications of their settlement, whether the money they exchange will be taxed as income or as a tax deduction, and whether the division of retirement assets will be subject to taxes and IRS penalties instead of simply being treated as a tax-free exchange of marital property. A court order is usually required to divide retirement assets the proper way, to avoid detrimental tax consequences. Even if the parties agree concerning alimony, it must be addressed properly to get tax benefits (or to avoid tax burdens).

Lots of Details

Clients look at the big picture of custody and visitation agreements. The devil is in the details. When they say they have already agreed to a custody schedule that gives each parent ½ of the Christmas, what does that mean? Do they mean December 24th and 25th every other year or did they assume the holiday was determined based on the school calendar, from the first day off until the day school starts? Does either parent intend to go out of town for Christmas and need to add specifics concerning the travel arrangements over state lines? Other typical problem issues include an “agreed upon” amount of child support. Parents might have an agreement that one pays for daycare while the other pays for health insurance. That tends to be unrelated to the way the state determines child support. Is there an argument that a bonus or commission should be included as income? What about extra-curricular expenses, sports and the payment of medical expenses not paid by insurance? Will there be out-of-state travel expenses by one parent? Should child support be calculated based on a shared visitation schedule or the more typical visitation schedule? And yes, you pay your attorney to be a pessimist, which usually means making sure things are handled properly at the beginning of your case after your attorney gives you legal advice. The decisions will be yours to make, but don’t assume you’ve reached an agreement until you know all the questions have been asked.

My Ex Is Using the Attorney That I’m Paying For?!

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The Attorney Client Relationship

Clients can be resentful that their attorney is wasting time dealing with the pro se person. In most family law cases, each person has an attorney. When the other person is pro se, Latin for representing himself or herself, lawyers aren’t working for the pro se person and charging you for it as clients sometimes think. That is prohibited. An attorney may represent only one person in a family law case, such as a divorce or child custody case. Failure to do that is usually a conflict of interest. That means what is good for one person might be a bad thing for the other person. For example, if one spouse gets alimony that’s a good thing for him or her, but it is might be a bad thing for the other spouse. The lawyer has to choose one person or the other as a client.

What’s Different?

If your ex had an attorney, your attorney would have to talk with the other about settlement, discovery (documents, etc.), trial matters, and logistics of court events such as depositions. In other words, your attorney would still be taking time to talk with the other attorney. It doesn’t always take more time than it would to negotiate with an attorney. In fact, some people without attorneys are anxious to get down to business instead of posturing the way other attorneys will because they want to avoid court.

The Law and Equality

The law requires everyone to be treated in the same way, regardless of whether they have an attorney or not. The same deadlines, rules, laws and other requirements apply to both sides. In the eyes of the law, people shouldn’t be penalized if they cannot afford an attorney. But the judge is still bound by the law. Judges have to walk a fine line in these cases. Attorneys also have to be very careful when communicating with a pro se person. We certainly can’t give them legal advice but sometimes we do explain the reasons why the offer we are making on behalf of our client is a good one. Depending on the circumstances, the attorney will tell the pro se person that he or should talk with an attorney.

Same Rules as Everyone Else But . . .

Attorneys have specific things they need to prove in court, based on what the law requires in each situation. But in court, judges sometimes give pro se people a little leeway when they testify and present their side of the case because if they were held to a strict standard they probably wouldn’t be able to say much at all. More often than not, the pro se person usually just wants the judge to hear what they want and why they want it. In a democracy, it is important for all citizens to have the right to their day in court. It’s especially important for parents who are in child custody cases to be heard because the judge must award child custody to one or both parents based on what the judge believes is in the child’s best interest, regardless of whether the parent is represented by an attorney.

Can My Ex Look at My Credit Report?

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The Problem: Hide the Ball

The short answer: No! He or she can’t legally access your credit report without your permission. When I begin representing a client, I suggest he or she pull a recent credit report because that is the only way to identify whose name is on what account. I generally don’t need to see it, but I do need my client to be certain what debts are reflected there so we can address them in court or by settlement. That may be the only way to see if your ex has opened a credit card in your name, or jointly in both names. People are sometimes surprised to discover accounts they were unaware of, opened when the ex signed his or her name on the account application. It is not uncommon for the other spouse to open a post office box so mail does not come to the residence. You probably won’t know about this credit problem unless you look.

Now What?

If you find out your ex has been snooping around looking at your credit report, what can you do? You have various rights pursuant to the Fair Credit Reporting Act, including the right to sue him or her. You may want to consult with a consumer law attorney about the remedies available to you pursuant to that statute, including any claim for attorney’s fees. You can also file a police report. Federal law 15 U.S. Code §1681q “Obtaining information under false pretenses” says: Any person who knowingly and willfully obtains information on a consumer from a consumer reporting agency under false pretenses shall be fined under title 18, imprisoned for not more than 2 years, or both. The Federal Trade Commission has a link for consumers to file complaints. Consider asking the credit reporting agency to place a fraud alert on your account, or have your credit frozen, which protects you from any future activity unless you specifically agree.

While there are many web sites that advertise credit reporting services, you should consider checking your credit on the federally recognized web site where you can access free credit report each year: www.AnnualCreditReport.com  This site permits you to access free credit reports from the three credit reporting, TransUnion, Equifax, and Experian once each year for free. Ideally, you should access one credit report every four months. That way, you can cross reference the data available to you and find any variations on a regular basis all year long.

 

Businesses in NC Marital Property Division Cases

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In equitable distribution cases when the court divides marital property, a business ownership interest is an asset to be identified, classified, valued and distributed to (usually) one of them. Like any asset, it might be marital property or separate property and it may be distributed to either spouse if it is marital. The scope of this topic is very broad and cannot be fully addressed here. This article is a brief overview of the things experts, such as CPAs, might consider when performing a business valuation.

Business Entity: What is the Structure?

The way a business is organized impacts the value of it and the manner in which the business is taxed. Sole proprietorships are businesses owned and operated by an individual, created without filing any formal paperwork. Other businesses are created formally by paperwork filed with the NC Secretary of State.  Limited liability companies (designated with “LLC”) are more suited to ownership by an individual or a few people, and they usually require less paperwork. Corporations (designated with “Inc.”) are formal, and require special paperwork to be annually maintained, corporate officers to be elected and formal bylaws to be followed.

Why the Business Structure Matters

There is value added or subtracted from the value of a business based on many factors, including whether the business is publicly traded or owned by a few people as a closely held corporation (CHC).  CHCs owners are often family members who sign buy-sell agreements that require the co-owners to give each other the first right of refusal if one chooses to sell his or her share of ownership. The ability of an owner to sell his or her ownership interest is key because market value is based on what a willing buyer would pay a willing seller. In CHCs for example, willing buyers might require that only a few people, such as family members or business partners, get the first right of refusal in the event a spouse wants to sell. This can reduce the value of the business. If the business owner is a licensed professional, such as a doctor or lawyer, who works alone as a solo practitioner, the value is limited because the value of the practice depends on that one person whose license isn’t transferable. While a business or practice has a value, the actual professional license or business license that terminates on transfer is separate property. Businesses and any co-owners must be named as a party to the lawsuit for the court to have authority to order them to do things.

Factors That Impact Value

Name recognition of the business is known as “good will.”  For example, a local car dealership that has existed for 40 years has more name recognition, and may be more valuable than, a brand-new dealership. Consumers tend to more highly trust an established business. Tangible assets contribute to the value as well. Company assets might include equipment and office supplies, vehicles, bank and investment accounts, certain contractual rights, promissory notes and outstanding accounts payable to the company, inventory, and even real estate. Retained earnings are funds that remain in the business accounts, instead of being distributed or paid to the owner(s). This is critical when determining income for purposes of support to the other spouse, especially if it is unclear whether these funds are counted twice, once as business value and again as income. Company debts and expenses can include mortgages, lines or credit and business loans, insurance, state and federal taxes for the business and employees, payroll, retirement contributions for employees, health insurance, etc.  Business value is also impacted by potential liability in the event the business is faced with litigation (personal injury, unemployment claims, malpractice, bankruptcy, etc.) or the likelihood of anticipated litigation.

 

Is My Attorney Friends with My Ex’s Attorney?

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When I was a law student, I remember tagging along with my mentor for a trial and being shocked that he was talking and joking with the attorney who represented the opposing party before court. In my mind, court was a war and the opposing party was the enemy. It wasn’t until I began trying cases myself that I had a context for that event. Lawyers by definition are zealous advocates for clients. However, clients sometimes think that means an attorney must be rude, loud and hostile. When I became a lawyer, I realized that is not the case. In fact, cordial relationships can benefit both parties.
Professional Relationships
As “officers of the court” attorneys are expected to have a respect for everyone, including the opposing party. Professional relationships among attorneys are often long-term. A trend for attorneys is to choose an area of law to concentrate in, or even become a board certified specialist, as I am. As a consequence, more attorneys practice only family law, spending years or even decades litigating or negotiating cases with each other. And a smart attorney makes efforts to keep a cordial relationship with his or her colleagues.
Consequences 
But more to our point, attorneys who are professional and have a basic level of respect tend to cooperate when it is necessary, even though they are deeply divided on the disputed issue. They return calls to each other and try to determine whether there are issues that can be resolved outside of the courtroom. They can actually have conversations about the case instead of just “performing” in court. A frank conversation before the trial could lead to a stipulation to certain things, for example, giving the judge a written agreement saying they agree to those things. Such an agreement might reduce a three day trial to two days, benefiting both parties.
On the other hand, the attorneys lacking a cordial professional relationship with colleagues tend to be the same ones who drive up billable time with big displays of bravado even when doing so isn’t really necessary. That often translates into a long, hard and expensive road. When that type of attorney is in a case, I can tell my client to count on the case costing twice as much what it should cost.  There are cases that absolutely have to be litigated tooth and nail. But that doesn’t mean the lawyers have to needlessly inflame an already tense family situations, especially when children are involved. Seeing your attorney shake hands with the other attorney, or make small talk, is not a bad thing.

Is Your Attorney Listening?

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The trail of emotional destruction that follows the breakup can be immense and long-lasting. Being distressed and angry is completely normal. In fact, as I tell people who end up at my office during a consult, you wouldn’t be normal if you weren’t! Family disputes are painful. Depression is common when people suffer a breakup, especially when the relationship lasted for a long time or when there are children.

Does the Attorney Get It?

When you begin working with your attorney, it may seem he or she isn’t very sympathetic to what feels like the end of your entire life as you know it. Although we want the same goal as you, we have to take a very different approach to arrive there. As an attorney, I’m constantly thinking of how a judge would analyze the case if and when we go to court. The judge is a stranger, a third-party neutral who comes to court with certain expectations about how things are done. The judge first sees each party as a clean slate and doesn’t necessarily think the opposing party has done anything “bad” although you see it differently. Your attorney has to first analyze your case objectively the way the judge will perceive it in order to properly advise you and prepare for court. We’re zealous advocates but we are wise to focus on the substance of your case, and not just the drama your ex created, that may come out in the closing argument. We have to pace ourselves to let the judge see the facts before we make the closing argument because the judge must rule based on the facts. We bide our time, so don’t be surprised if we don’t seem to “get it” until we reach the courtroom. It is against this background that your attorney is working.

Our Job as Attorneys

Every client needs moral support, especially from friends and family. Clients also need to vent, which can be a good thing. However, good attorneys try to guard against using a client’s resources and money by spending substantial time addressing the need to vent or have moral support. We have feelings too, sometimes the very same outrage about your ex or the attorney that you have. But as attorneys, we can’t let ourselves focus on that (or on our egos). We need to keep boundaries in place to properly do our job. An emotional attorney makes things personal, creating hurdles and obstacles, fanning the flames that are already there. This makes it harder to resolve a case outside of court, and more expensive. Believe me, once the process is underway, your attorney probably knows what a jerk your ex can be. But he or she must analyze your legal situation, which may have very little to do with how you feel at all. Unless you are in the midst of a custody case, your case may be purely about dollars and cents, like a business transaction.

What Do You Need to Do?

We are sympathetic to your personal life, but we have to help you recognize you may benefit from talking with a trained professional to help you move past intense anger, loneliness and sadness. Judges consider it a positive thing when a person seeks help, especially when there are children in the family. We aren’t trained to properly assist clients with addressing those feelings. Plus, your attorney’s shoulder is too expensive to cry on, especially because your insurance won’t cover it. The best thing attorneys can do when these issues arise is to refer a client to a counselor or other trained professional to assist with working through these feelings. Even people who lack insurance can seek help, sometimes on a sliding fee scale, such as the East Carolina University Family Therapy Clinic. A client should always talk to his or her attorney when there is a concern about these matters.

 

Medical Records in Family Law Cases

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In family law cases, a party may seek medical records for several reasons, perhaps to show whether someone is able to work in child support and alimony cases. Another common reason for requesting them is during child custody case to show whether a parent is physically able to care for a child, or whether a parent is mentally stable.

What Are Medical Records?

Medical records (MRs) are described differently in federal and state laws. The critical starting point is determining what MRs are actually being requested, and for what time period. Examples of MRs include pharmacy records, hospital records, therapy records, and patient files at the doctor’s office. MRs can include other sensitive information about STDs, substance abuse, pregnancy and abortion, and mental health history showing a person was suicidal or involuntarily committed to a mental hospital.

Seeking the Records

MRs are confidential. As such, a patient must generally give consent before MRs are provided to anyone. Attorneys typically request MRs in the civil discovery process, usually by requests for documentation to be produced. An attorney may also issue a subpoena to be served on the other party or to a third party, such as the doctor or the pharmacy.

The Law

MRs are privileged, meaning they are generally protected from being disclosed unless the patient consents or there is a court order requiring disclosure. The patient, doctor or other medical provider may file a motion objecting to the release of the MRs. The party seeking access to MRs then has the burden of proof to show they are “necessary to a proper administration of justice.” NC Gen. Stat. §8-53 et seq. There are federal laws such as HIPAA that hold the medical provider to certain standards, as well as state laws. There are special laws that protect mental health and substance abuse records.

What Can the Judge Do?

In Pitt County, the MRs are usually sealed and held by the clerk of court (or the judge) until the trial. Only if the judge finds the MRs are relevant to the issues in the trial, he or she then moves to the next step of deciding what to do with the MRs.  A judge might review the records in camera, which means privately in his or her office. The attorneys do not have access to the records unless the judges makes a ruling on whether some or all of the MRs are admitted as evidence.

After reading the MRs, the judge can deny or grant the motion to admit them as evidence. Or, the judge might limit the scope of the MRs. For example, the only records given to the attorneys might be for the last six months instead of the three years of records the attorney subpoenaed. For any MRs given to the attorneys, the judge has the authority to require the attorneys shred the records after the case is finished. Judges sometimes order the MRs to remain exclusively with the attorneys, not to be reviewed or copied by the clients. Even if the judge doesn’t require the attorneys to do anything specific with the records, attorneys are still bound by State Bar ethics rules to maintain confidentiality of records.

Is Your Life an Open Book? Quashing Subpoenas

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Subpoenas require witness to appear at the courthouse to testify and/or produce evidence such as “records, books, papers, documents, electronically stored information, or other tangible things.” (NC Subpoena form). Although people sometimes call it squashing, the motion to quash a subpoena has nothing to do with the yellow vegetable with the same name. Instead, it is a motion that can be filed if the person or entity being subpoenaed objects to the request for information and/or the presence of a witness in court or at a deposition. If the subpoena is quashed, that means the judge can render it void, or possibly limit it to make it more reasonable. Family law cases usually involve the spouse, former spouse and other family members as witnesses. But there are also third party witnesses such as teachers, doctors, social workers, neighbors, or co-workers. A witness might also be an alleged sexual partners of a spouse.

What’s Fair Game?

Most of the time in family law cases, the parties in the lawsuit must disclose information about assets, debts, and in some cases, marital fault. Subpoenas in property cases usually mean there are subpoenas issued for bank accounts, vehicle titles, retirement documents and anything that shows there are assets or debts. A co-owner of assets might be subpoenaed for information related to the value of a business.

Marital Fault

If you’re not happy about being subpoenaed by your girlfriend’s ex-husband, is that a ground for filing the motion to quash? Probably not, if her husband is alleging she engaged in an adulterous relationship with you, because that is an allegation of marital fault. Perhaps your credit card statements are also subpoenaed because you met her on a social networking dating web site that will appear on the statement. It might well be fair game too. On the other hand, a judge might grant the motion to quash the subpoena if the case involves the division of marital property, which involves only financial fault, not marital fault involving an intimate sexual relationship.

Medical Records

If your ex has served you with a subpoena to produce your medical records, those records may or may not be required by the judge. Medical records are privileged, meaning the general rule protects you from disclosing them. After all, they document everything from your weight, medications and illnesses, to STDs and possible substance abuse. As with any rules, there are some exceptions. The judge in a child custody case might deny your motion to quash the subpoena because he or she makes a ruling that the best interest of your child overrides privileged medical records. If you have an alcohol addiction, for example, the judge might very well deny the motion to quash the subpoena because your child’s safety is at issue. If you have a pending child support case and you are alleging you are unable to work, the judge probably will require you to provide your medical records, but might limit how far back the records must be provided.

The Rules in North Carolina

Anyone objecting to a subpoena has a legal duty to appear at the time indicated on the subpoena with the requested items unless the judge enters an order saying otherwise. In NC, the subpoena form itself states the protections and lists objections a judge will consider if you make a motion to quash a subpoena. Grounds to file a motion to quash the subpoena include avoiding undue burden or expense complying with it, allowing reasonable time for compliance, disclosing privileged or other protected information and disclosing trade secrets. Subject to a judge’s interpretation, a subpoena cannot be unreasonable or oppressive, and cannot be outside of certain legal procedures. A witness may be “reasonably compensated for the cost of producing the records, books, papers, documents, electronically stored information, or tangible things specified in the subpoena.” (Subpoena form).