Spring 2015: New Minnesota Legislature
New Law: In the spring of 2015, the Minnesota legislature made changes to family laws. It made these changes to address problems that practitioners recognized in the practice of family law.
Under the previous law, a problem arose regarding income tax dependency exemptions because there was a lack of specific statutory authority for allocating exemptions between parents. There was also a lack of standards to use when allocating dependency exemptions.
This problem was highlighted by a federal case, Armstrong v. Commissioner of Internal Revenue, 745 F.3d 890 (8th Cir. 2014), which held that the non-physical custodian of a child cannot rely on a court order to show that party’s right to claim the dependency exemption. Instead, the party needs to submit Form 8332 as executed by the custodial parent.
The new law addresses this problem in Minnesota Statute § 518A.38, subdivision 7, by providing authorization and standards for allocating dependency exemptions.
Additionally, the new law authorizes the placement of conditions upon an award, authorizes modifications of an award, and provides sanctions for the wrongful claiming of an exemption or wrongful refusal to execute Form 8332.
The Minnesota case Gossman v. Gossman, 847 N.W.2d 718 (Minn. App. 2014), highlighted an issue regarding Karon waivers that arose under Minnesota Statute §518.552, subdivision 5. Gossman held that courts lacked jurisdiction to approve parties’ agreements to undo prior agreements to preclude or limit modification of maintenance. These maintenance modification agreements are also known as Karon waivers.
The new law addresses this problem by granting courts the authority to approve agreements to restore the court’s authority to modify spousal maintenance.
The new law also provides that a Karon waiver may be made part of a post-decree stipulated order rather than just a divorce decree.
The new law further provides that a court may award maintenance post-decree even though no maintenance was originally ordered.
Two Minnesota cases highlighted an issue regarding interest rates on judgments: Redleaf v. Redleaf, 807 N.W.2d 731 (Minn. App. 2011) and Soeffker v. Soeffker, No. A12-0211 (Minn. App. Nov. 19, 2012). These cases held that a 2009 amendment to the interest judgment statute, Minnesota Statute §549.09, required courts to set interest at 10% for property settlement money judgments (Redleaf) or property division equalizers (Soeffker) in excess of $50,000.
The new law addresses this problem by exempting family court property settlement judgments in excess of $50,000 from the 10% interest rate. It also provides that courts are authorized to award interest at the standard judgment rate. Further, it provides that the court can award a lower interest rate or no interest rate at all if a finding of unfair hardship is made.
Parents had difficulty convincing education and medical care providers for their children of the parents’ right to access the information and records regarding custody orders under Minnesota Statute §518.17, subdivisions 3 and 3(a).
The new law addressed this problem by making parental rights to the information and records a part of the court order.
There was also an issue regarding parenting time in which the presumption of 25% parenting time was perceived to be treated as a maximum rather than a minimum under Minnesota Statute §518.175, subdivision 1(g).
The new law fixed this issue by providing that the level of parenting time is presumed to be a minimum of 25% rather than at least 25%, thus potentially giving a parent more time with the child.
Under Minnesota Statute §518.175, subdivision 6, courts appeared to lack the authority to grant make up parenting time in appropriate cases due to the way the statute used the word denial. The statute’s use of ‘denial’ seemed to contemplate an intentional denial of parenting time. A related issue was that the courts did not seem to seriously penalize parties for repeated and intentional denials of parenting time.
The new law addresses this problem by first providing statutory authorization for a grant of compensatory parenting time when a substantial amount of court ordered parenting time has been made unavailable unless the compensatory parenting time requested was not in the child’s best interests.
Second, the law now requires courts to grant compensatory parenting time when a denial of court ordered parenting time is repeated and intentional.
Third, the law requires courts to grant at least one of the enhanced penalties outlined in subdivision 6(d), which includes civil penalties and attorney’s fees, if the court finds that a party has repeatedly and intentionally denied parenting time after a previous order finding the have repeatedly and intentionally denied parenting time.
Fourth, the law allows a defense that a denial of parenting time was necessary to protect a child’s physical or emotional health.
Minnesota Statute §518A.28 (b) and (e) addresses a party’s requirement to provide income information requested by the opposing party and the penalties for failure to provide the information that is required by statute or court order.
A problem arose here because the statute only required the production of the past year’s tax returns. In some cases this would not be helpful because a party had sought an extension or had failed to file. Additionally, some parties did not provide copies of their complete tax returns or only provided their form 1040.
The new law addresses this problem by requiring production of complete tax returns, production of 1099’s, W-2’s, and K-1’s if a federal return has not been filed for that year.
In the new Minnesota Statute §518A.28 (e), if a party has violated an order or statute requiring disclosure of income or employment information, or changes to that information, the court can issue an order requiring compensation, cost, and reasonable attorney’s fees to the party who was wrongfully deprived of the information. In no event can this information be provided later than three years from the date it should have been provided.