Part of Real World Divorce: web edition | Kindle edition
Our questions regarding Michigan law and customs were answered by Richard S. Victor, who graduated from Michigan State University-Detroit College of Law in 1975. He has been a practicing family lawyer since then and has conducted about 50 trials over the years, representing men and women in roughly equal proportions. Victor is one of the most distinguished divorce lawyers in the United States, but rather than go through a long list of his accomplishments as a litigator it is more interesting to consider his efforts to reduce the harm that divorce does to children and families. Victor is a co-author of "You and Me Make Three," a book for children suffering through the divorce of their parents. He co-created the SMILE ("Start Making It Livable for Everyone") program that started in Michigan but has now spread as far as Australia. He is a founder of the Grandparents Rights Organization. Victor is is the founder of The Law Offices of Richard S. Victor, PLLC and is currently Of Counsel with the firm of Hertz Schram, a mid-sized firm in southeast Michigan. See http://www.richardsvictor.com/ for additional biographical information. Victor's direct phone number is (248) 646-7177.
Victor is unusual in that rather than charge an hourly fee for some of his matrimonial work, he charges for value-added to clients. "It is a conflict of interest against our own client to bill divorce litigants by the hour," notes Victor. "I should not get paid more if I extend the suffering. I would rather resolve the case quickly and efficiently in my client's best interest and sometimes I am able to get to a solution very quickly, but opposing counsel will say 'We need to sit on this for 2-3 months so that I can bill enough hours to my client.'" Victor's comments are consistent with what we've heard about some prominent divorce lawyers, e.g., "He likes to collect $500,000 from each case but then settle it just before trial so that he never needs to do that much work." Victor notes that over the course of his career "there has been a change in the practice of law with many new attorneys. It has become more of a business to them and less of a profession."
"Michigan has taken some giant progressive strides into what's best for children and the relationship with parents. The attitude and philosophy is that, in the absence of a parent being unfit, a child has a right to have a relationship with both parents. Court will take a look at who the primary caretaker was during the marriage and some judges will try to continue the status quo and established environment. But in the nonperfect world that we live in, there may be a stay-at-home parent and another parent who is off working. When there is a divorce things will change. If the wife says 'the husband didn't have anything to do with the kids' the court can respond 'that's not necessarily what he will do once he has the kids. Maybe he didn't come home because he didn't want to be around you.'"
"The preference of the child is one of 12 factors for a court to take into consideration. The statute says that 'if child is of reasonable age to express preference' but there is no hard definition of 'reasonable.' Case law says that 'reasonable' can be as young as 7 or 8 years old but on the other hand a 12 or 14-year-old was not of a 'reasonable' age because the kid talked about promises from dad to get him a motorcycle."
Child support in Michigan stops at 18 or 19 and a half for a child who has not graduated from high school. Michigan courts will not order college costs to be paid. Nor will Michigan courts order costs to be paid for disabled children older than 19 and a half. However, if the parties agree in a property settlement to divide college or special needs costs then the court will enforce the agreement. Michigan has child support guidelines but Victor said the formulas are not available to laypeople. Confusingly there are at least two formulas, "one is from Craig Ross out of Ann Arbor, which comes up with a higher number than Springfield's formula, which is what most courts use." These formulas take into account the income of both parties, the number of overnights children have with each parent, and health insurance premiums paid. "Consumers can look this up on the Web but it is not usually correct." There is no limit to child support in Michigan, but with very high income earners the court can deviate from the formula and has the ability to write an opinion why there should be a downward deviation from the guideline numbers. "I had a case where the formula result was $30,000 per week and the court came back with about $4,500 per month."
[Note that via a Google search we were able to find the "Michigan Child Support Formula Manual" and "Michigan Child Support Formula Supplement". These are more than 100 pages total. We used the 2017 version for some of the calculations in this chapter. The Supplement contains a "General Care Support Table" indicating that, for a single child of an upper-middle income defendant, child support revenue will be $1,540 per month plus 10 percent of the defendant's after-tax income over $9,684 per month. Comparing among other states that offer unlimited child support profits, children of high-income defendants are more lucrative in Michigan than in Virginia (2.6 percent of pre-tax income) and Florida (5 percent of after-tax income). Child are less lucrative in Michigan than in California (11.5 percent of after-tax income), Illinois (20 percent of after-tax income), Massachusetts (11 percent of pre-tax income), and Wisconsin (10-17 percent of pre-tax income).]
Prenuptial agreements in Michigan "are valid and enforceable as long as not unconscionable, negotiated at arm's-length with counsel for both sides, and full and complete disclosure. I had a case with an IT employee with $70,000 per year income who married a woman worth $200 million. Michigan is an equitable property state so this could have been a very profitable marriage despite its having lasted only 9 months. However, the prenuptial agreement was upheld." Unlike in Massachusetts, for example, there is no requirement in Michigan that a person be able to obtain a financial profit by marrying a wealthier person and then divorcing.
"Property division is typically 50/50. There are 14 factors for alimony: past relations and conduct of parties, length of marriage, ability of parties to work, source and amount of property awarded to parties (is it income-producing?), age of the parties, neither one should be impoverished, parties' health, standard of living when they were together, responsibility for support of others (e.g., child from another marriage). Alimony for one third to one half the length of marriage is a rule of thumb but not a hard line. First courts determine a child support number. Then they look at total income, take out the taxes, and reduce by child support. Then you have another number for disposable income. Then add any of the child support recipient's income. Then compare the two numbers and come up with something equitable."
As in other states, a prenuptial agreement cannot limit a court's ability to award custody or child support. "If there is a settlement agreement during litigation regarding child custody, the court must still make a finding that it is in the best interest of the child and approve it. Custody and parenting time are always modifiable but you have to show a substantial change in circumstances since the last order and there is probable cause that it is in the best interest of the child to change custody. A 'substantial change' has to be something other than a normal life event, e.g., having more time with a sibling would not be one of the factors, nor would a child growing up from 2 to 4 be sufficient because this is natural development that the parties should have known about. You need to include reevaluations in a proposed child custody order."
The average hourly wage in Michigan is $21.14 per hour. A person who goes to college at the University of Michigan will spend approximately $98,476 over four years to earn a bachelor's degree. Census 2014 show that the median income for 22-36-year-old college-educated women working full time is $37,000 per year ($28,453 after taxes). The corresponding man has a median income of $60,000 per year ($43,641 after taxes). Michigan collects a close-to-average percentage of residents' income to run state and local government (Tax Foundation).
The average annual cost of child care is $10,114 for an infant in Michigan, $7930 for a four-year-old, and $4576 for a school-age child. Thus the total cost of commercial child care from age 0 through 12 is $53,628 ($40,342 in a family care setting). According to Victor, if the child care is necessary for a child support recipient's job or education a court will typically order the payor to pay for daycare costs in addition to child support.
For a man who goes to college and then works for 14 years, his total after-tax income would be approximately $512,498, net of college expenses. Factoring in the USDA-estimated actual expenses of single parents who have children at home, he will have a greater personal spending power than his college/work peers if he can collect at least $3,123 per month in child support. This is obtainable by suing a woman earning at least $306,168 per year after taxes. If he has two children, however, with two different mothers, he comes out ahead financially when each pays him at least $1,937 per month. This is obtainable from defendants earning $163,848 per year.
The corresponding woman will earn $299,866 if she chooses college and work. She is better off when she can collect child support of at least $2,138 per month. She can do this by suing a father earning $187,968 per year. If she has two children, she needs to get $1,444 per month from each father. This corresponds to defendants earning $106,000 per year.
Among Michiganders surveyed by the Census Bureau in 2014, 94 percent of those collecting child support were 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.
"If he can't make a profit from his photography business, the man will have to go to work and get a job," says Victor. "They may impute income and he will be paying as if he is working. Then the judge will look at what kind of time he will have available. He won't have the nanny anymore."
What kind of schedule will the court order? "The starting point is one week on/one week off," says Victor. "The 'every other weekend' schedule is not good for children unless a father is not competent or isn't capable of taking care of a child during the week."
How does income imputation work in Michigan? "You start by asking whether a parent is voluntarily unemployed or underemployed. The burden of proof is on the person trying to get income imputed to the other person," Victor notes. "This man's prior employment experience, education, disability, and availability for work in his area will be considered. The wife will need to bring in a vocational expert to testify."
"If she ends up winning the majority of the parenting time, child support would likely be minimal because the court would impute anywhere from $25,000 to $100,000 per year in income to this photographer," says Victor. "Due to her higher income of $325,000 per year, however, she would be paying child support to him if they split parenting time 50/50."
Using the "Prognosticator 27.0 2013" program from Springfield, and a $0/year income assumption for the father, the guideline calculations for this family are the following:
In other words, given the 17 years of potential child support remaining and the fact that the main cost for this child will be providing a dedicated room in the house (a fixed cost regardless of 70/30, 50/50, or 30/70 parenting time), the mother stands to make $401,472 after taxes if she can win 70 percent custody as opposed to letting the slack-from-home father be the 70-percent parent. The mother will be approximately $200,736 richer if she can get what other states would call "sole physical custody" compared to 50/50.
Given the disparity in income, what is the likelihood that the mother will be ordered to pay the father's legal fees of defending this lawsuit? "Michigan has a very specific law," says Victor.
"The Court may order one party to pay the other party's reasonable fees if the record shows that other party is unable to bear the expense of the action."
Can the slacker father coast for a few more years based on a property division and alimony from this short-term marriage? Victor rains on his parade: "Property accumulated during the marriage is all that is on the table. If she took out a mortgage to buy a house, for example, he can get half the house. It would be unlikely for the Court to award alimony in this case."
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.
"Most realistically the custody order would be one week on, one week off, with pickup/dropoff at a neutral place such as a school or camp," says Victor. "The parents would be sent to a program to attempt to help them reduce conflict and keep children in conflict-free zone."
With a 50/50 parenting time schedule there would be no child support paid. Due to the equal incomes there would be no alimony and the property division, as agreed, would be 50/50.
What's at stake financially if the wife succeeds in getting sole custody? The Prognosticator 27.0 program, with the defendant husband taking care of the children 109 nights per year, the wife would gain a tax-free revenue stream of $14,952 per year. By IRS regulation, she would also be entitled to claim all four children as dependents. According to the ADP paycheck calculator, she would have a net pay of $51,509 plus the child support to gain a total spending power of $66,461. The father, on the other hand, with a filing status of single, would have $46,879 in after-tax pay. Subtracting the child support he would have $31,927 to spend in a household that swelled to 5 for one third of the time. I.e., he would be trying to maintain a five-bedroom home at close to the federal poverty guideline income.
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.
"The outcome would depend heavily on what county he was in," says Victor. "If the distance was not too far and he was able to handle the kids, there would have to be a reason to show why he was less of a parent than the mom." If the father did obtain 50/50 custody what kind of schedule would it be? "Courts don't necessarily like to order one week on/one week off versus 2-2-5-5," says Victor. "They like the parents to pick something. Studies all show that the younger the child is the more frequency that the child needs to be with both parents. Children under 5 need to have more frequency, and one week on/one week off is not ideal. A young child should not be away from a parent for more than 3 days."
Victor predicted an equal division of assets, child support at the guideline level, and alimony. The Prognosticator 27.0 program, using 2013 guidelines formulae, calculates that the plaintiff, if successful in a bid for 2/3rds parenting time, could get $35,532 per year in tax-free child support and predicts that the plaintiff in addition would get approximately $40,000 per year in taxable alimony or "spousal support." How long would the alimony last? Under one-third to one-half the length of the marriage rule articulated above, it would be unlikely to last more than five years.
What if the court awarded 50/50 parenting time? The plaintiff's tax-free child support revenue would fall to $19,464 per year but her taxable alimony would be increased to $47,736 per year.
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.
What kind of courtroom theatrics would Victor expect to see here? "Oftentimes the mother will say 'He wanted me to abort the baby. He didn't even want to have this baby.'"
Child support will be at the guidelines level, says Victor. During the period in which the mother cares for the child at least two-thirds of the nights, the Prognosticator 27.0 program kicks out a number of $23,196 per year in tax-free child support plus $41,376 in taxable alimony. What if the the parents share child care on a 50/50 basis? Child support falls to $12,660 per year while alimony grows to $46,644. Note that under the rule Victor articulated above, it is possible but unlikely that a judge would award long-term alimony following a 1.75-year marriage.
What about the defendant's $2 million in premarital savings? "If all the money was kept separate and distinct then there can be no invasion of premarital assets. Michigan has separate and marital property laws. This is not a marital asset." Note that any income on the $2 million would be considered when calculating child support.
[The 2017 Michigan Child Support Formula Manual invites litigation over how much income the $2 million could be generating:
To the extent a parent’s assets could be (but are not) used to generate regular income, a parent’s income includes an imputed reasonable and regular investment return on those assets, except a home and its reasonable furnishings, an automobile, and other small items of personal property
What's a "reasonable and regular investment return" over an 18-year period? Nobody on Wall Street can agree on this, but a Michigan family court judge is supposed to figure it out after attorneys, paid for by child support plaintiffs and defendants, present arguments, evidence, and experts. Note that Michigan state and local governments were unequal to this challenge in forecasting pension fund returns. Failures to meet forecasted returns have resulted in multi-billion dollar pension funding gaps and contributed to the 2013 bankruptcy of Detroit.]
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.
For the purposes of custody, "a child born out of wedlock won't affect parenting time or support, " says Victor. "There will be the same standards as above regarding the child's tender age."
A minimal income will be imputed to her. Child support will be strictly according to the guidelines formula (a little over $20,000 per year) but the father will also have to pay for day care if it is necessary for the mother's work.
What if at 25 she marries a man earning $100,000 per year? "His income will not be considered but if they have joint investments or joint savings accounts, then that could have an effect. It is essential that their tax returns show whether income-producing accounts are the husband's or wife's."
After the trial is over and everything has been divided, how easy is it for a parent to move with the children?
"If she has sole legal custody she can just petition the court with a request to remove and there is little that he can do. If they have joint legal custody, which is typical, then she has to file a change of domicile petition with the court and a specific statute MCL 722.31 governs. Note that none deal with best interests of the child."
Here's the relevant section of the statute:
(4) Before permitting a legal residence change otherwise restricted by subsection (1), the court shall consider each of the following factors, with the child as the primary focus in the court's deliberations:
(a) Whether the legal residence change has the capacity to improve the quality of life for both the child and the relocating parent.
(b) The degree to which each parent has complied with, and utilized his or her time under, a court order governing parenting time with the child, and whether the parent's plan to change the child's legal residence is inspired by that parent's desire to defeat or frustrate the parenting time schedule.
(c) The degree to which the court is satisfied that, if the court permits the legal residence change, it is possible to order a modification of the parenting time schedule and other arrangements governing the child's schedule in a manner that can provide an adequate basis for preserving and fostering the parental relationship between the child and each parent; and whether each parent is likely to comply with the modification.
(d) The extent to which the parent opposing the legal residence change is motivated by a desire to secure a financial advantage with respect to a support obligation.
(e) Domestic violence, regardless of whether the violence was directed against or witnessed by the child.
If a court has limited a child's contact with the father to every other weekend but he faithfully takes care of the child during those weekends, what is the likelihood of the mother succeeding with a removal action? "Some judges are known to refuse all of these. In the 1970s it was expected that a mother, who typically had custody, would follow the new husband to a new job. If one parent takes up and leaves the other parent behind, that precludes the other parent from participating in normal everyday activities. Now the burden is on the parent who is leaving and the court must be convinced that there is no other way to improve the child's life and the parenting time schedule offered. Is this a parent who was at every school event? If it was an M&M dad (movie and McDonald's) then maybe he could have two-thirds of the summers, long weekends, etc. About 35-40% of these removal actions succeed."
We asked Victor about his work in the area of grandparent rights. Why would this matter? Under what circumstance would a parent not want the grandparents (free babysitters!) to see the children? "A typical situation starts when the mother wins custody and the father has minimal visitation," says Victor. "The mother will often use her power to get back at the ex-husband. She acts as a gatekeeper and won't let the former in-laws see the children."
What kind of rights do grandparents have? "All 50 states have different laws regarding grandparents," says Victor. "The only federal law is that one state's laws will be enforced in another state. In 2000, the U.S. Supreme Court in Troxel v. Granville was asked to rule that all grandparent visitation laws were unconstitutional. Sandra Day O'Connor said 'no we will not make laws unconstitutional' but states had to modify their laws to be in accord with the following criteria: (1) if if there is a request for grandparent visitation over parent's objection, burden of grandparent to proceed, (2) if a conflict, courts will give deference to a parent's wishes, (3) courts must be given guidelines or factors for determining. Several states went far beyond the Supreme Court and made it tough by requiring 'clear and convincing evidence'."
Who comes out against Grandma seeing the kids? "The ACLU has opposed grandparents laws because children don't give them money." (Our Web search uncovered the fact that the ACLU submitted a brief to the Supreme Court in the Troxel case summarized by Attorney Aaron Larson as follows: "it argued that the grandparents should be required to show that a denial of grandparental visitation would substantially harm a grandchild before grandparenting time should be allowed.") Anyone else? "Gay and Lesbian organizations because gay parents don't want their parents involved in how they raise their children."
What's on the horizon for grandparent visitation? Victor says "the commission on uniform laws is taking up the grandparents’ rights question to try to make a standard for all 50 states." A Web search uncovered a "Third Party Child Custody and Visitation" committee, but no draft results from the committee as of July 2014.
What can be done now? "In a divorce judgment there should be derivative visitation that grandparents can use if the father cannot," Victor suggests. How would grandparents have an opportunity to request anything in a lawsuit in which they are neither plaintiff nor defendant? "The grandparents would file a motion to intervene in the divorce case."
Michigan provides financial incentives to have children with multiple partners. When suing defendants earning $116,208 per year, for example, four children with one defendant will yield $713,876 (tax-free) over 18 years. Four children with four different co-parents/defendants will yield $1.33 million.
Michigan explicitly encourages disputes and litigation when calculating child support. Here are some excerpts from the state's "Child Support Formula Manual" (2017 edition):
The term “net income” means all income minus the deductions and adjustments permitted by this manual. A parent’s “net income” used to calculate support will not be the same as that person’s take home pay, net taxable income, or similar terms that describe income for other purposes.
[for a self-employed defendant] In order to determine the monies that a parent has available for support, it may be necessary to examine business tax returns, balance sheets, accounting or banking records, and other business documents to identify any additional monies a parent has available for support that were not included as personal income.
Deductions for Tax Purposes. For a variety of historical and policy reasons, the government allows considerable deductions for business-related expenses before taxes are calculated. Those same considerations are not always relevant to monies a parent should have available for child support. Therefore, some deductions should be added back into a parent’s income for purposes of determining child support, including:
Depreciation figured at a straight-line (not accelerated) rate on a parent’s (not a corporation’s or partnership’s) tangible personal property, other than for personal vehicles or home offices, should be deducted from income. Any parent who uses accelerated depreciation for tangible personal property may deduct the value of the straight-line depreciation amount for property other than personal vehicles or home offices, if the parent provides proof of what the straight-line amounts would have been.
Entertainment expenses spent by the parent. Legitimate expenses for customer’s entertainment are allowable as deductions.
Travel expense reimbursements, except where such expenses are inherent in the nature of the business or occupation (e.g., a traveling salesperson), and do not exceed the standard rates allowed by the state of Michigan for employee travel.
Each of the above clauses could lead to $50,000 in legal fees, depositions, expert fees for accountants, etc. If that doesn't generate enough litigation then the plaintiff and defendant can always fight about the hypothetical:
Potential Income
When a parent is voluntarily unemployed or underemployed, or has an unexercised ability to earn, income includes the potential income that parent could earn, subject to that parent’s actual ability.
There are 11 factors that a judge is instructed to weigh when guessing at "potential income". Each of these may require attorneys to examine documents, depose witnesses, bring witnesses to trial, etc. Note that the parent who is victorious in a custody fight also has a leg up in the "potential income" battle due to one factor being "The presence of the parties’ children in the parent's home and its impact on that parent’s earnings."
What does Victor see on the horizon? "Michigan has a 50/50 shared custody law that is proposed." Will it get through the Legislature? "It is being heavily opposed by the family bar, psychologists, and social workers. This is partly because it doesn't take into account whether both parents are equally able to care for their children and provide the necessary needs the children require at the time of the divorce; the child’s schedules; and how far away the parents live from each other," says Victor.
[The authors note that such a law would substantially reduce fees collected by the lawyers, psychologists, and social workers that Victor mentions as being in opposition.]
Michigan occupies a middle ground between states that have a strict 50/50 custody presumption and states where courts try to determine what the voluntary division of labor was between parents during a marriage, however brief it may have been, and then extend that division of labor via court order until the child becomes an adult. As such, it is more difficult for a plaintiff to lay the groundwork for a successful custody (and therefore profitable child support) lawsuit by adjusting the child care arrangements during the year prior to suing.
Child support obtainable in Michigan exceeds the USDA estimates of what parents actually spend on children and greatly exceeds what the State of Michigan will pay a family to take in a foster child (just over $6000 per year). However, it is not so lucrative that being a child support plaintiff would typically pay better than going to college and working.