Part of Real World Divorce: web edition | Kindle edition
Honolulu-based Blake T. Okimoto is a soft-spoken man with more than three decades of divorce litigation experience through which he has maintained the demeanor of the Dalai Lama. He has been Chair of the Hawaii State Bar Association and current serves as the Director of the Family Law Section of that organization. He also serves as a "per diem" judge in the District Court. See http://www.honolulufamilylaw.com/ for more about Attorney Okimoto.
Okimoto works on divorce cases in which roughly two-thirds are filed by female "plaintiffs" against male "defendants." However, in paternity cases the nomenclature is "petitioner/respondent." A case can go from filing to trial in about one year and Okimoto handles roughly five full divorce trials each year.
Hawaii has what other states call "temporary orders" or "interim orders" but uses the Latin term "pendente lite." Okimoto says that "If I file the case I file a motion along with the Complaint. It is usually heard within about six weeks. This is very important because it sets the stage for the final custody decisions." Is it just attorneys talking and affidavits, as in some other states, and over within 10 minutes? "No," said Okimoto. "The hearing can be evidentiary, though only the parties can testify. It is typically 20 minutes per side. If the attorneys persuade the court that the case is complex, a hearing for up to two hours may be set for a Friday." Will Hawaii separate litigants as a matter of routine? "No," said Okimoto. "Without an allegation of violence a court won't necessarily order exclusive use and possession of the house. However, collateral issues such as children from a previous marriage, ownership of the home, or the length of the marriage could result in an order for exclusive use."
What's the role of the domestic violence prevention system? "If you allege violence, you're going to get the house," said Okimoto. Do some people take advantage of that? "Oh yes," he replied. "You sometimes wonder if it is a strategy." Is it an effective strategy? "Yes. The court's main concern is safety. The burden of proof is preponderance of evidence [51% more likely than not standard], unlike in the district court where we hear restraining order cases between non-related parties and the burden is 'clear and convincing' evidence." Unlike in some states, the judge who hears a request for a restraining order is not the same judge who will hear the trial because they are in different divisions of the court system. Hawaii is unusual in assigning one judge to hear all of the motions in a divorce case leading up to the trial and then a different judge for the actual trial. This prevents the trial judge from being prejudiced from anything he or she might have heard regarding settlement negotiations. It also avoids the phenomenon that attorneys say is prevalent in other states where trials become an expensive formality because judges don't like to revisit their previous decisions made after brief motion hearings.
Being a family court judge in Hawaii is not a lifetime occupation. "Judges are assigned to family court for one to two years," said Okimoto, "and rotate in and out. District court judges apply for the position and are appointed by the chief justice subject to confirmation by the legislature. There is also a circuit court judge in the family court system who is appointed by the governor. District court judges serve for 6 years and circuit court judges for 10 years. They must petition for retention and that is subject to review by the judicial selection committee. It is not automatic. There are also per-diem judges who fill in for full-time judges who are sick or on vacation." Okimoto himself serves part-time as a district court judge.
As in Massachusetts and Canada, a parent can collect child support for roughly five years into what is technically "adulthood." Okimoto told us that "child support goes to age 23 as long as the adult child is enrolled full-time in college." Does it end when a bachelor's degree is earned? "No," said Okimoto. "It could potentially continue while the adult child was in graduate school." Is there an age limit for disabled children? "No," said Okimoto. "I have negotiated and litigated child support through age 27 for disabled children." Can a court order a parent to pay college expenses? "This is an area that often comes up," said Okimoto, "and the answer is 'yes' but there are limits and it is discretionary. For example, I handled a case for a father who had the ability to pay but had been excluded from all decisions regarding college. He was just sent the bill. We were able to get his liability limited to half the cost of the University of Hawaii." What about for parents who had cooperated on college selection? Would the cost be allocated by the court in proportion to incomes? "It could be, but it is whatever the court feels is appropriate," said Okimoto.
Do adult children and child support recipients come into conflict over the money, as we found in Canada and Massachusetts? "Yes," said Okimoto. "If it comes into court they will order the mother and father to pay the child directly. If the child is over 18 he or she has to be brought into the case as a party. It gets uncomfortable for the child."
Consumers can calculate child support at the guidelines level using state-published materials, according to Okimoto. Hawaii has a similar system to Montana's. It considers both parents' income and assumes that the basic cost of supporting a child is $4,320 per year. Then there is a "standard of living adjustment" (SOLA) that is based on the parents' income (neither gross nor net, but close to the gross). This is calculated using a straight 10 percent per child up to a maximum of 30 percent. In other words, Hawaii departs from the standard assumptions that the per-child cost goes down when there are multiple children and also from the economists' findings that the percentage of income a parent spends on children goes down as income increases.
Child support in Hawaii begins to vary with the number of overnights starting at 144 overnights per year. For example, if two $400,000-per-year physicians with a single child have a custody dispute, the loser will pay the winner $3,392 per month ($936,192 over 23 years) if the child's schedule is 222/143 (a 60/40 time share). In other words, the custody victor will be nearly $1.9 million wealthier, after taxes, compared to the loser. The "extensive time-sharing worksheet" then assigns an "adjustment rate" of $84.40 "for each night over 143 nights). Over a 23-year period, this gives each night of parenting time a $23,405 value. Attorneys in other states have told us that this kind of formula tends to lead to litigation regarding the child's schedule. [Note that if the couple had three children instead of one, the total cash transfers would be about $120,000 per year, about $2.4 million over 20 years, for an after-tax wealth difference of about $4.8 million between winning and losing custody (comparable to earning nearly $10 million more pre-tax than the other parent).]
Unlike in Massachusetts, Wisconsin, and Canada, annual child support revenue in Hawaii may not be unlimited. Although theoretically the formula will extend at 10 percent of net income to infinite amounts, in practice Okimoto says that the largest award he has seen for a single child was $72,000 per year. "It is limited to the reasonable needs of the child," he noted. On the other hand, the child support numbers are higher than in many other states and yet expenses for day care and health insurance are ordered on top of the basic child support amount (the worksheet has a field labeled "Plus Monthly Child Care Expense (to allow custodial parent to work or attend voc. ed. or training).")
Child support revenue in Hawaii is moderately secure. A change in parenting time plan requires a showing of a "material change in circumstances," though Okimoto said that a child growing up from age 4 to 13, for example, would be a "material change." A child's preferences can be considered by a court, but "the judge usually will not speak to the child," said Okimoto. "A child custody evaluator may determine the child's preferences. Judges are extremely hesitant to bring a child into testify. An attorney would need to file a motion requesting it." At what age might a child's preference become significant? "A 13- or 14-year-old child may vote with his or her feet," said Okimoto.
Although child support going forward cannot be collected from the estate of a parent, a court will order a typical child support payor also to purchase, at his or her own expense, life insurance with the recipient parent as the beneficiary.
What about a "walk-away" prenuptial agreement in which parties keep pre-marital property separate and waive alimony. Would that be valid in Hawaii? "Yes and no," said Okimoto. "It would depend on the financial position of the parties and the extent to which there had been meaningful negotiation." What's an example of how this factors would be applied? "Consider a wealthy person who marries an immigrant from Thailand," responded Okimoto. "That's not likely to be enforced without a provision for support."
The average hourly wage in Hawaii is $21.54 per hour. Census 2014 data show median income for a 22-to-36-year-old college graduate woman working full time as $43,000 per year ($31,633 after income taxes). The corresponding man earns an average of $45,000 for a man ($33,887 after taxes). Attending University of Hawaii, Manoa for four years will cost $101,100. Hawaii collects 10.2 percent of state residents' income to run state and local government (higher than the national average; source: Tax Foundation). Personal income tax rates can be as high as 8.25 percent.
The average annual cost of child care is $12,876 for an infant and $7,752 for a four-year-old. The total cost of child care from age 0 through 12 is about $63,517 in commercial settings or $52,244 in a family care setting.
The male college graduate will have an after-tax spending power of $540,353 after 19 years of working (19 years of income minus taxes and the cost of college). Adjusting for USDA-estimated actual costs of child-rearing, He would be financially better off collecting child support when that support is $2,708 per month or more. According to the state-published Excel worksheet, this is obtainable from a mother who earns $300,000 per year before taxes. With two children from two different mothers, however, he could have an after-tax spending power larger than from going to college and work if each mother paid $1,566 per month, which is possible when each mother has a salary of $162,000 per year.
The female college graduate will have an after-tax spending power of $516,527 over the same time period. After adjusting for the costs of a child, she would be better off collecting child support when that exceeds $2,621 per month. This would require finding a father earning more than $288,000 per year. If she is suing two fathers, however, she is financially better off compared to the college/work case when she can get $1,523 per month from each one. This should be possible within the guidelines if each defendant earns roughly $156,000 per year.
Of Hawaiians who collect child support, Census data show that 92 percent are women.
A 35-year-old female hand surgeon earning $325,000 per year marries a 33-year-old photographer. She sets up her husband with a photo studio and $100,000 of equipment, but he works just a few hours per week. They have a one-year-old child who is cared for by a nanny. The father is often home with the baby and nanny, but he spends most of his at-home time watching TV and surfing the Internet, leaving the child-rearing chores to the nanny. With the mom at work and/or taking care of the baby, the dad begins an affair with a young fashion model. After two years of marriage, the mom sues for divorce, custody, and child support.
"Hawaii gives a lot of importance to the status quo and who was the historical primary caregiver," said Okimoto, "which means that mom wins custody in this case because she brought in the nanny and has been working with the nanny. Dad has not been particularly involved with child-raising. The fact that he works part-time is also against him for custody." Why? "The mother has a responsible full-time job. Thus she has the financial ability to pay the nanny."
What would the child's schedule look like? "Our judges look at the Maricopa County (Arizona) guidelines, which for a child of this age would provide brief visitation three times per week." What's brief? "One to four hours." Would there be overnights with father? "Not until age 3 to 5 depending on the maturity of the child," said Okimoto.
Okimoto agreed with the Illinois litigator who said that a stay-at-home mother with a nanny would be treated "a lot more leniently" than a stay-at-home father who let the nanny do the chores.
How about legal custody or what other states call "decision-making"? Okimoto said "Joint legal custody is not a presumption by statute, but most cases end up with joint legal custody. Only about 5 percent of cases with two fit parents result in sole custody."
How will the father's child support obligation to the doctor be calculated, given that his photography business is not profitable? "A court would impute at least minimum wage," Okimoto said, "and maybe as much as $36,000 per year if he is a healthy college graduate." Can the mother hire a vocational expert to come and testify regarding the father's earning potential? "She could," said Okimoto, "but that would cost at least $5,000 and therefore would probably be counterproductive."
The financial stakes of the physical custody decision are the following:
In other words, assuming that the father keeps a dedicated bedroom for the child regardless of the parenting schedule, the father can be approximately $800,000 better off if he wins custody compared to if he loses.
Okimoto charges $300 per hour and estimates that a case through trial could cost one side over $65,000 include discovery and custody evaluation. Will the judge order the mother to pay the father's fees? "If there are marital savings then he can get an order for his fees," says Okimoto.
The popular-in-some-other-states "she has a higher earning potential" argument for a greater-than-50/50 property division are unlikely to fly in Hawaii, says Okimoto, who expects a 50/50 division of marital property and notes that "she has a good argument to get back the $100,000 in equipment." What about alimony? "Hawaii is not a great alimony state like California," said Okimoto, "so the best that he can hope for is interim spousal support and then maybe six months of transitional alimony." Is the amount set by formula? "No, though that would be helpful. What we have in our statute are 13 factors for the judge to consider."
A 22-year-old woman marries her 22-year-old college sweetheart. After 14 years of marriage, they have four children, ages 3, 7, 9, 13. Both parents are public school teachers earning approximately $65,000 per year. They have shared child care duties roughly equally over the years. Now they can't stand to be in the same room together. He accuses her of having an affair. She accuses him of being verbally and emotionally abusive to her, but not to the kids. After a stormy argument in the kitchen, he moves in with a friend and she files for divorce, requesting sole custody and child support. The father answers the Complaint by requesting sole custody, but no child support. Both parents agree that the marital assets can be split 50/50. Both parents prefer as little post-divorce contact with the other as possible.
Even if both parents ask for sole physical custody, Okimoto says that a court can force shared parenting on them and expects that would be the outcome of this hypothetical. What would the schedule look like? "Probably alternating weeks," he said.
Can a party block an award of shared parenting by asserting the existence of conflict with the other litigant? "No," says Okimoto, "unless it materially affects the children." Would asserting conflict block joint legal custody, as in some states? "Probably not."
Do parents who expect a lawsuit try to improve their chances of winning custody by taking over more child-related tasks in hopes of activating Hawaii's preference for the "historical primary caregiver"? "I have seen that quite frequently," said Okimoto. "There is the gatekeeper mother and also Super Dad Syndrome once he gets the inkling that he will be going through the divorce system. Though Super Dad Syndrome is actually a good thing because the child wins a more involved parent."
The financial stakes here are $1,813 per month ($21,756 per year) if one parent can win sole custody compared to $0 if the children have a 50/50 schedule. Thus if a parent does prevail, the winner parent will be trying to run a five-bedroom household on $49,072 in after-tax earned income (head of household plus four dependents) plus child support = $70,828 per year. The loser will be trying to run a five-bedroom household with $44,760 in after-tax earned income (filing single) minus child support = $23,004. This is below the federal poverty level. However, it is not low enough to activate Hawaii's exclusion against taking more than 70 percent of a parent's gross pay. Given Hawaii's high tax rates we asked Okimoto if a parent who had been assessed with 70 percent of gross pay wouldn't have less than $0 to spend after taxes. "This is often the case," he responded.
An 18-year-old woman marries a medical resident. She spends the first four years of the marriage as a college undergraduate, earning a bachelor's degree, and then becomes a stay-at-home mother to two children. She files for divorce after 10 years of marriage. The kids are 5 and 2 years old at the time the divorce commences. The plaintiff does not allege any misdeeds on the part of the father, only that they drifted apart in the time that she aged from 18 to 28. The mother has very obviously been the primary caregiver. The father has now completed his medical training and is earning $275,000 per year. The family has home equity of $300,000 and additional savings of $200,000.
Unlike in Scenario 1, the high-income doctor's job here does not help with obtaining custody and, with no nanny, the stay-at-home parent's lack of a job is not a liability. "She's got a significant advantage in getting sole physical custody," Okimoto said. "The court will probably look upon it as 'mom should care for the children; dad has a duty to produce income.'" What if he says that, now that the marriage is over, he wants to cut back to four days per week and earn $225,000 per year so as to be able to handle a larger share of parenting time? "It depends on intangibles, such as whether or not the judge likes him, as to whether a $275,000 per year income will be imputed to him," said Okimoto.
If she has no income and holds onto custody of the children, her child support is $4,952 per month ($59,424 per year). This is cut roughly in half by a 50/50 arrangement, thus giving her more than a $600,000 cash incentive to fight against shared parenting.
Okimoto estimates a period of "transitional and rehabilitative" alimony of between two and four years at a level of roughly $80,000 per year. He explained that alimony is calculated first and then the child support calculation would be run using the alimony received as a component of the mother's income.
A 25-year-old woman marries a 40-year-old never-married medical doctor earning $275,000 per year. She had been earning $50,000 per year working as a receptionist in a medical office. She has a child after a year of marriage, quitting her job during the 7th month of pregnancy due to fatigue. She files for divorce when the child is 8 months old (after 1.75 years of marriage), alleging that the father did not participate in the infant's care, e.g., he did not change diapers or get up in the middle of the night to soothe the baby. The mother will allege that the father was verbally demanding and abusive, though there won't be any witnesses to corroborate. The father had savings of $2 million that he accumulated prior to the marriage but there was no significant accumulation of assets during the less-than-two-year marriage. The mother seeks a division of assets as well as alimony.
Does Hawaii operate a de facto "tender years" system that would make it easier for a mother to get sole custody of a 8-month-old compared to an 8-year-old? "The mother has a huge advantage because she's breastfeeding," says Okimoto, "but her success at getting and keeping sole physical custody will depend on how motivated and involved the father is."
Based on the doctor's earned income, the mother can get about $30,000 per year in child support in a sole custody situation, falling to $15,000 per year with shared parenting. Income from the $2 million in savings also goes into the child support calculation at close to 10 percent. Thus in a low-inflation environment, with the $2 million earning a nominal interest rate of 2 percent, she might get an additional $4000 per year. In a high-inflation environment, however, with the nominal interest rate up to 20 percent, she could get an additional $40,000. It would be possible, but not likely according to Okimoto, for the wife to collect alimony until the youngest child starts school.
Can she get a division of the $2 million pre-marital savings? "No," said Okimoto. "We have five categories of property: (1) pre-marital, (2) appreciation in Category 1 property, (3) gifts or inheritances, (4) appreciation in Category 3 property, (5) anything acquired during the marriage. Categories 1 and 3 remain separate and are not divisible by the court." The wife here can get a half share of any appreciation in the $2 million during the marriage, even if that appreciation was due to inflation or market forces (what other states would call "passive"). Thus in a long-term marriage without a prenuptial agreement, if there is a moderate inflation rate essentially all pre-marital assets are subject to a 50/50 division because the value at the time of the marriage becomes a small percentage of the value at the time of divorce.
What about volatility? Suppose that the $2 million in savings was actually two $1 million assets at the beginning of the marriage, an apartment building and some stocks. The apartment building burns down and becomes worthless but the stocks double in value. Thus the total value is still $2 million but one asset is gone. Is the wife entitled to a 50 percent share of the $1 million in stock appreciation? Or nothing because the package value remained unchanged? "Case law says that you can offset losses from losers against gains from winners," said Okimoto, "but I have argued against that. The case law is not crystal clear."
An 18-year-old woman goes to a music festival and meets a 38-year-old medical doctor earning $275,000 per year. Things get a little crazy and a few months later she calls him up to say "I am going to have a baby." The 18-year-old does not go to college, quits her $12/hour job during the pregnancy, and does not wish to return to work.
"Unmarried cases have become a big percentage of my work," said Okimoto. "People have babies and don't get around to marriage." How are the custody and parenting time issues resolved? "It is no different than in a divorce," said Okimoto. "He will not get custody. If he has not lived with the baby he will start out with supervised visitation. He might have to take affirmative steps such as attending parenting classes so that he knows how to treat an infant. The schedule will follow the Maricopa County guidelines."
The mother can get $30,000 per year ($690,000 over 23 years) in child support, which would be cut in half if she were to agree to 50/50 shared parenting. How long can she wait before informing the father and still get child support retroactive to the child's birth? "If she waits only a few years," said Okimoto, "she gets retroactive child support pursuant to the guidelines. If she waits 10 years then the amount might be discretionary."
If the mother is not receive welfare benefits, does she need to hire a private attorney to establish paternity and get a child support order? "No," said Okimoto, "the Hawaii Child Support Enforcement Agency will do it all for a nominal fee." The agency's Web site says the following:
The appropriate office will file a “Complaint for Paternity” naming the mother and alleged father as defendants. If there is more than one alleged father, a legal father (husband) or a caretaker, those persons will also be named as defendants in the Complaint.
The issues in a paternity case are: fatherhood; current child support and medical support/insurance; past support; birth expenses; genetic testing costs; father’s name on the birth certificate; name change; custody; and visitation.
CSEA is only concerned with the issues of paternity (fatherhood), current child and medical support, past support owed to Department of Human Services, adding the father’s name to the child’s birth certificate, and reimbursement of genetic testing costs.
Defendants in CSEA paternity cases may hire private attorneys to represent them at any point during the pendancy of the paternity proceeding.
In other words, as in other states, if the father does not have the resources to hire a private attorney he will be a layperson facing two professionals (a government agency employee, possibly an attorney, and the judge) in the courtroom. Also as in other states the father will emerge from the process with an obligation to pay the mother but without any visitation rights, unless he hires a private attorney to start a custody lawsuit.
What if the mother marries Larry Ellison and moves to a suite at the Four Seasons on his private island of Lanai? "Legally speaking she is still entitled to the same money," said Okimoto, "though she may not pursue it."
Hawaii calls it "relocation" when a parent wants to move. As Hawaii is the most isolated population center on Planet Earth, an interstate move is going to involve thousands of miles of separation between a child and the noncustodial parent. We asked Okimoto if a custodial parent could move to New York City to join a new spouse and take up a higher-paying job. "The mother can file a motion and likely win," said Okimoto, "but these are the toughest cases because they are pure win/lose. The questions the court will ask: Is the child going to be financially secure in New York? What will she do to maintain the relationship with the father? Will there be shared summers? School breaks? Is the relocation area going to be in the best interest of the child for educational and other opportunities? Are there relatives nearby?" What if there has been 50/50 shared parenting in place? "It becomes harder but not impossible," said Okimoto. "Relocation cases are less predictable than divorces. It is a two-fold process. First a parent must demonstrate that there is a material change in circumstances. Then the court uses the best interest of the child standard." Does the court stretch this at all by considering the moving parent's interest? "Yes," said Okimoto. "The court does use the philosophy that if the custodial parent's life improves then so does the child's. These cases have been softened a bit due to Skype and the iPhone, but you're going to have one parent who is elated that their plans for the future are going to be fulfilled while the parent who stays in Hawaii will be devastated from losing access to the child."
Hawaii does not provide the typical state's financial incentives for residents to have children with multiple partners. Given defendants earning a fixed $300,000 per year, three children with three defendants yield a tax-free cash return of $2.25 million. Three children with one defendant, on the other hand, are worth $2.19 million.
Hawaii has an explicit provision for assigning 100 percent of a parent's after-tax income to be paid out in child support. This happens under a provision for "Support of Additional Legal Children" and is triggered when the total amounts of "child support for the subject child(ren) … the Payor is required to support is greater than the Payor's net income." The judge is supposed to determine child support by "dividing the obligor's net income by the total number of all the children the obligor has a legal obligation to support." Unlike some other states, Hawaii does not have an explicit "self-support reserve" (typically a below-minimum wage income) that the parent is entitled to retain for his or her own housing and food.
Rather than a European-style "show us your tax returns," Hawaii opens the door to additional litigation and days of trial whenever a self-employed parent comes into the courtroom. The child support guidelines invite judges to consider arguments regarding to what extent business expenses that were legitimate for tax purposes are "reasonable and necessary." Hawaiian litigants can also spend time arguing about "the expense of direct deduction of depreciable assets in the year of acquisition should be spread over the assets' useful life." (So there might be a debate in the family court regarding the "useful life" of a specialized machine and then what method of "spreading" should be used.)
As noted above in Scenario 1, a judge may also consider whether a child support payor is "employed below full earning capacity" and then set an income consistent with "the reasonable work aspirations of the parent." A provision prevents the winner of custody from having income imputed until the youngest child turns 3 years old.
The developers of the guidelines note that "Child support is a complex area that is made all the more complicated because of the infinitely variable fact patterns presented to the Family Courts and the OCSH."
Okimoto did not expect to see too many changes in how our hypothetical scenarios would be resolved. He did expect to see "more of a movement toward joint physical custody or extensive visitation [more than every other weekend but not equal parenting time]". Okimoto was against the idea of a rebuttable presumption regarding shared parenting: "There would be instances when it would just totally be wrong. We need to maintain independence of the judiciary to hear arguments on equities."
When we asked what Okimoto would change with a magic wand he said "I wish for more peace and that people would have more respect for each other. There is too much domestic violence." Did he see physical violence among the high-income couples whose divorces he handles? "No," responded Okimoto, "but I also handle low-income cases." (Okimoto's 30 years of experience are consistent with statistical studies showing domestic violence rates to be inversely correlated with income.) Would he change the procedures for handling domestic violence? "No," responded Okimoto. "The temporary restraining order process is not good but it is the best that we have."
Hawaii is a tough state for American-style no-fault divorce. One doctrine that informs our nationwide system is that neither the children nor the lower-income spouse should suffer any reduction in lifestyle following a divorce. In other words, in an ideal world alimony and child support should be sufficient to enable a continuation of the marital lifestyle for the custodial parent. At the same time most states, including Hawaii, award a sufficient amount of visitation that the noncustodial parent must have a house large enough to accommodate the children. Hawaii has moderate incomes and high costs, especially high real estate costs. Thus where in some other states two separated parents might be able to use their former combined income to set up two family-size households, this could be an impossible goal in Hawaii.
Another challenge in Hawaii is that relocation to any other state, a common aftermath of an American divorce, means that children and parents must travel vast distances to spend time with each other.