New Hampshire

Part of Real World Divorce: web edition | Kindle edition

Despite its small population (1.3 million), New Hampshire divorces can be big. So we pulled together a team of two attorneys to answer our questions: Tracey Goyette Cote and Andrea Labonte, both with Shaheen & Gordon. Cote and Labonte pride themselves on creative settlements and collaboration but when cases need to be tried they each do 5-15 trials per year. See http://www.shaheengordon.com/ for a full list of the accolades earned by Cote and Labonte.

Cote and Labonte handle a 50/50 mix of male and female clients, though the majority of cases are ones in which a woman is the "petitioner" and a man is the "respondent" (corresponding to the "plaintiff/defendant" nomenclature in other states).

What motivates divorce and child support plaintiffs in New Hampshire? The answer was similar to what we have heard from attorneys in other states: "I hate to say it, but money is definitely a factor. That becomes more true when you go up the scale of income and wealth." At the same time Cote and Labonte presented a more nuanced perspective than some attorneys: "Oftentimes in the wealthier families there is a traditional structure. Mom is highly motivated to maintain her role so as to keep getting the child support and alimony, but also because stay-at-home moms become invested in their role and that becomes their identity. She won't want to have the kids half-time and go out and find a job that pays $50,000 per year."

As in other states, there is little practical right of appeal. "New Hampshire judges have a lot of discretion in these fact-driven cases. The standard of review is deferential. There is an interesting distinction right now regarding appeals to the Supreme Court of NH. In divorce cases both parties have the right to a mandatory appeal by the Supreme Court. In parenting cases [where the parents were never married], however, the appeal is discretionary."

New Hampshire is in some ways a litigator's paradise. Custody is whatever a lawyer can argue is in "a child's best interest" with no presumption toward 50/50, sole custody, or anything in between. Unlike in Texas, where a child's schedule with a non-custodial ("loser") parent is fixed by statute (and therefore will not, as a practical matter, be the subject of litigation), "every [New Hampshire child's] schedule is customized and subject to litigation."

Once custody and a parenting time schedule is determined, at first glance it would appear that calculating child support is simple. The state publishes a child support calculator at http://www.dhhs.nh.gov/dcss/calculator.htm that functions up to incomes of $1.8 million per year (yielding more than $206,000 in tax-free payments for the winner parent of one child). Attorneys make use of privately produced and sold computer programs that will calculate child support for higher incomes. There is no income limit beyond which the guidelines do not apply. For example, a Wall Streeter who earned a pre-tax $10 million per year would have a guideline child support obligation of $1.1 million (roughly 20% of after-tax income).

The guidelines do not end litigation over the proper amount of child support, however, because court has discretion to adjust these amounts, e.g., when there is "Significantly high or low income of the obligee or obligor."

The effect of a parenting schedule on child support obligation is much murkier than in states such as California and Florida. The guidelines state that "Equal or approximately equal parenting residential responsibilities in and of itself shall not eliminate the need for child support and shall not by itself constitute ground for an adjustment." Thus in a 50/50 parenting situation, the obligor might pay the same as before. The court will look to see (1) "Whether the obligor parent has established that the equal or approximately equal residential responsibility will result in a reduction of any of the fixed costs of child rearing incurred by the obligee parent."; (2) "Whether the income of the lower earning parent enables that parent to meet the costs of child rearing in a similar or approximately equal style to that of the other parent."

A child support plaintiff in New Hampshire can collect money every month until the child turns 18. This is a more secure revenue stream than in most other states due to the high bar that New Hampshire places on modification of custody: "Most of the grounds for modification require some kind of misconduct. A parenting plan issued by the court for an infant will usually have some built-in extra time for the father as the child gets older." Doesn't this result in a lot of unhappy 12-year-olds whose parenting schedule was set when they were infants? "You will not find a practitioner in New Hampshire who is happy with this standard."

The presumptive age of maturity is 14 but for a mature 13-year-old might be able to have a say in his or her parenting schedule. "If a mature minor asserts a preference, that is an independent basis for modification under the statute."

New Hampshire statutes forbid a court to order a parent to pay for college.

Unlike in many other states, New Hampshire courts will not order an obligor to pay child support and pay an additional amount for day care, according to Cote and Labonte. A child support recipient who did not wish to take care of children himself or herself would have to pay for day care expense using the guidelines money received.

A "walk-away" prenuptial agreement, in which neither party can profit from property division and alimony via a marriage, is of questionable validity in New Hampshire. "There is no per se rule, but such an agreement would likely be valid if the parties were similarly situated in economic terms. When there is a significant disparity in financial circumstances, the agreement will be scrutinized more closely by the court. Of course there are other conditions that must be met such as disclosure and both parties being represented at the time of signing." What is a standard by which a prenuptial agreement would be invalidated? "If an agreement is unconscionable either at the time it was made or at the time it is being enforced." What do Cote and Labonte advise their wealthier clients? "Give at least something to the less wealthy party, but maybe not until after three years of marriage. A 1-3 year marriage is considered 'very short term.'"

Despite the wide range of issues that are up to a Court's discretion and therefore subject to litigation, a careful attorney can keep the cost down. Cote and Labonte estimated the cost of one side of a fully litigated divorce, handled by their firm with a partner at $275/hour, would be unlikely to exceed $100,000. When asked to respond how it was possible that this was so much less than consumers in other states reported spending they responded, "Oh, there are law firms in New Hampshire that will give you the $1 million divorce, but we aren't one of them."

State background

The average hourly wage in New Hampshire is $21.92 per hour. A person who goes to college at the University of New Hampshire will spend approximately $118,000 over four years to earn a bachelor's degree. According to U.S. Census 2014 data, the median income for a college-educated woman age 22-36 who works full time is $42,000 per year in New Hampshire or $33,893 after taxes. For her male counterpart it is $60,000 per year or $46,191 after taxes. The Tax Foundation says that New Hampshire runs state and local government by collecting approximately 7.9 percent of residents' incomes in taxes, below the national average of 9.9 percent. New Hampshire taxes dividends, interest, and capital gains, but not wage income. Among New England states, New Hampshire is unique for not having an estate tax.

The average annual cost of child care is $11,995 for an infant, $9,451 for a four-year-old, and $4,198 for a school-age child. Thus the total cost of child care from age 0 through 12 is $61,429 in commercial settings or $$50,719 in a family care setting.

For a man who goes to college and then works for 14 years, his total after-tax spending power would be approximately $528,674 (14 years of average earnings minus college outlays).  After subtracting USDA-estimated costs of a child, he would have greater personal spending power by collecting child support if he can get at least $3198 per month. This would require suing a mother earning at least $290,400 per year. If he has two children with two different mothers, however, each mother need pay only $1974 per month per child. This occurs when each mother earns about $173,000 per year.

For a woman who goes to college and then works for 14 years, the comparable number is $356,502. Collecting child support for a single child is more profitable than going to college and working when the father earns at least $212,400 per year and thus pays $2400 per month. A female child support plaintiff collecting from two defendant-fathers will do better than the college alternative when each father has an income greater than $125,000 per year.

It is much more lucrative to take care of one's own child in New Hampshire than to care for someone else's. The state pays just $6,205 per year to foster parents (a little more than Professor Comanor's Census data-derived estimate of actual child-related costs).

Among New Hampshire residents surveyed by the U.S. Census Bureau in March 2014, 98 percent of those collecting child support were women. Among women aged 30-40, approximately 27 percent collect child support.

The Scenarios

Scenario 1: Professional Wife and Loser Husband

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.

Cote and Labonte: "This is perhaps the hardest case for us to predict. Courts in NH presume that both parents are fit and able to take care of a child. Statute says both parents should be involved with the child. Just because he is not the most attentive dad doesn't mean he won't get a shared parenting schedule based on his available time. An interesting question is whether Dad might get primary. Mom works pretty long hours. Mom's case is stronger for shared because they've used a nanny in the past so it would not be a change for the child to be cared for by the nanny. Mom has an argument for shared."

Cote and Labonte note that New Hampshire no longer uses the terms "physical custody" or "legal custody." The terms now are "residential rights and responsibilities" and "decision-making authority." The term "shared parenting" means an approximately 50/50 schedule, which courts certainly can and do impose, though the law does not encourage them to do so.

If the mother can win what would be called sole custody in other states, reducing the father to a visitor, she will not have to pay any child support to him. If the result is custody to the father or shared custody, however, she will pay roughly $3,500 per month under the guidelines regardless of the schedule. Over the remaining 17 years before this child turns 18, that works out to 714,000 after-tax dollars.

Unlike in New York it is not a given that the mother will have to pay the father's legal fees, but it certainly is a possibility. Cote and Labonte say that "It is within the Court's discretion. The Court must find 'need' on his side and 'ability to pay' on hers."

Due to the short-term nature of the marriage there would be no alimony. "Alimony is more likely the longer the marriage. There is a wide variation from judge to judge. It is totally discretionary." The father, however, would get to keep the photography equipment because he needs it for his livelihood. The Court could find that it was a gift. As far as the rest of property division is concerned, "in a short-term marriage the general rule is to try to restore the parties to the pre-marital position. It is possible that any increase in the value of a house would be divided 50/50."

Scenario 2: 14-year marriage of equals

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.

Cote and Labonte predict that a judge would say "Stop fighting. You're sharing the kids 50/50." There would also be no child support in that case due to the equal parenting time and equal incomes. "The Court may fashion a plan where exchanges are all at school so that the parties don't directly interact." How about Washington, D.C.-style splitting up of decision-making so that one parent would decide health care and the other education? "We have not seen that. There is a presumption of joint decision-making. There are deviations from that when there is domestic violence, but an argument in the kitchen does not qualify."

Can the plaintiff ("petitioner") get any mileage out of the abuse claims? "No. We see the allegations of abuse more when there is alimony at issue. Fault of a spouse can be considered in an alimony award."

What if one parent can become "primary"? In that case the secondary parent would pay the primary parent $1,427 per month or $17,126 per year. According to the ADP paycheck calculator, the primary parent would have an after-tax income from wages of $53,559 (filing as head of household with four dependents). He or she would then run a five-bedroom household on $70,685 in after-tax spending power (wages plus child support received). The secondary parent would take home $49,559 filing single. After paying child support he or she would be trying to run a five-bedroom household (to host the children one third time) with $32,433 per year, slightly above the 2015 federal poverty line of $28,410.

Scenario 3: 10-year marriage with kids 2 and 5

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 answers to this scenario revealed that New Hampshire is a moderately solid representative of the states where divorce courts try to replicate and extend whatever conditions existed during the marriage, i.e., if Parent A took care of the kids while Parent B worked, New Hampshire will try to maintain that relationship post-divorce at least until the youngest child has turned 18.

"The father can make the argument that he can scale back his working hours, but he is unlikely to get 50/50. And remember that Dad is going to encounter some issues if he voluntarily reduces his income in order to be more available to the children. He will pay child support on his former income of $275,000 per year [guideline amount: $3,050 per month], regardless of what he actually earns."

What's the process? "After the case is filed the parties are required to go to mediation. If that doesn't work there is a temporary hearing about three months from filing. At that hearing the mother will be designated as the primary parent. The Court will want to preserve the status quo. The trial would typically be 12-18 months after filing." What kind of schedule would the children have with their father during this period of litigation? "Typically it would be every other weekend from Friday evening through Monday morning if he can get the kids to school (otherwise Sunday evening). Also one or two evenings per week, one of which might be an overnight." [i.e., roughly 5 out of 14 nights] Could the father get a 50/50 schedule after a trial? "It is unlikely."

As noted above, a New Hampshire court's first order regarding a child's schedule is very difficult to overturn, so whatever is decided at the trial is likely to be in force for the next 16 years.

Cote and Labonte predict either a 50/50 property division or a larger share to the mother. They also predicted roughly $24,000 per year in taxable alimony payments for 4-5 years to supplement the roughly $36,000 in tax-free child support.

Scenario 4: 1.75-year marriage with 8-month-old child

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.

New Hampshire turns out to be the virtual opposite of Alaska when it comes to parents sharing responsibility for a baby: "The court will assign a parenting plan with a schedule that gives the child progressively more time with the father, but no overnights initially." The father's potential to transition to a 50/50 schedule is rated as low by Cote and Labonte, due to the fact that the standard for modification is so high.

Can the mother get a share of the $2 million in pre-marital savings? "In theory yes, in practical terms no. She might get a nominal property settlement. There will be no alimony." Could a court gradually transfer the pre-marital savings to the mother in the form of child support by imputing a high rate of return to the savings and then adding that into the child support calculation (California-style)? "No. The court will likely just look at what the father actually does earn on any investments."

Scenario 5: 18 year old free spirit/music lover; no marriage

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.

This kind of case is becoming an increasingly common one for Cote and Labonte ("I'm working on a similar case right now. The mother's potential profit is about $2 million."). When the parents were never married, or even barely acquainted, inevitably the custody and child support lawsuit comes when the child is an infant. Therefore whatever parenting plan is set forth by a court is going to be in place for 18 years, regardless of whether it suits the child. If the father wants any role at all he will have to act fast: "If he steps up to the plate on Day 1 and says he wants to be involved in the child's life and there is a reasonable mother who wants him to be active, he does have a chance for a meaningful amount of parenting time."

Child support would be at the same level as if the parents had been married, i.e., approximately $36,000 per year, tax-free.

What if the mother gets married at 25 to a man earning $100,000 per year? "A court could impute income to her at that point, but it would be the $12 per hour that she earned prior to her pregnancy. So it would have no effect on the child support calculation."

Quirks

Due to the fact that existing child support awards are deducted from the income used to calculate new child support awards, New Hampshire assigns different cash values to different children of the same parent. A father with two children, for example, will pay a higher amount to the mother who sued first.

New Hampshire encourages diversity in co-parenting by making it more profitable to have three children with three different co-parents than to have three children with one parent. Assuming that each co-parent earns $150,000 per year, for example, the "three kids with three different co-parents" scenario yields $1,775 per month per child, roughly a tax-free $63,900 per year. But if a parent goes the traditional route and has all three kids with the same co-parent, child support revenue is only $2,919 per month, $35,028 per year. Over 18 years, this is a difference between receiving $1.15 million and $630,504.

Removal/Relocation

How easy is it for a parent to move out of state with a child? "The parent seeking to move out of state has to first show that he or she has a legitimate purpose in moving, which could be a job, a marriage, wanting to be closer to family, etc. Once that is shown, the burden shifts to the other parent that the move is not in the child's best interest."

How easy is it for the to-be-left-behind parent to meet that burden? "The reported cases [those decided by an appeals court and therefore published] tell us that it is extremely difficult to move, even if a parent is an every-other-weekend parent.  If parent is involved by going to soccer games, school events, etc., then it won't be the same if the child sees that parent only during school vacations."

Interstate Issues

Due to New Hampshire's uncapped child support guideline amounts, a move to New Hampshire could be financially advantageous for an unwed pregnant woman. As noted above, a woman who became pregnant in Massachusetts or New York as a result of a brief acquaintance with a man in the financial services industry could be entitled to more than $1 million per year under the New Hampshire guidelines, i.e., a total of $18 million. This compares to a likely cap of $2-4 million in New York and an uncertain amount in Massachusetts due to the fact that judges have discretion to award amounts over $40,000 (total of $920,000 over the 23 years that child support is payable in Massachusetts). [Though at least some judges in Massachusetts will award, for the victorious custodian of a single child, a straight 11 percent of a defendant's pre-tax income above $250,000, regardless of a child's needs, making the total profit very similar to what it would be in New Hampshire.]

If a woman does not inform the father-to-be of the pregnancy, moves to New Hampshire, gives birth, and establishes a pattern of being the primary caretaker of the baby, how can she go about collecting child support from a father who lives in another state?

Cote and Labonte: "There is a uniform act (the Uniform Child Custody Jurisdiction and Enforcement Act) that governs jurisdiction over interstate disputes involving children.  New Hampshire would be the child’s 'home state' under the facts you present, and the New Hampshire court would have jurisdiction.  The UCCJEA, which has been adopted by every state except Massachusetts (I believe there is a bill pending in Massachusetts) requires states to cooperate in interstate cases.  For example, Mom doesn’t necessarily have to get Dad to come up to New Hampshire; the court can request that the Massachusetts court hold an evidentiary hearing, or can order that Dad’s testimony will be taken by deposition in Massachusetts.  The states are also required to cooperate regarding issues of enforcement.  Interstate child support issues are governed by another uniform act, the Uniform Interstate Family Support Act."

As noted in our scenarios, New Hampshire laws favor continuity of care for the child. Thus a child support plaintiff would be wise to spend at least a few months taking care of the infant prior to initiating a lawsuit. The child support obligation will go back to the child's birth and thus the mother will not suffer any financial loss from waiting to file, only a delay in receiving whatever monthly amount the court decides to order.

Closing Thoughts

Cote and Labonte don't see major changes coming down the road in New Hampshire. "There is more of a move toward mediation." How about codification of custody or parenting schedules? "Absolutely not. There have been some bills introduced in the Legislature codifying 50/50 custody but they haven't even made it out of committee."

Cote and Labonte are strong advocates of staying out of court, especially when it comes to custody and parenting time. "When I meet initially with a client I say 'You know your child and to-be-ex. The best thing is for you and your ex to work out custody and a parenting schedule rather than having a court that has never met your child craft a decision for you.’" How about practical advice for schedules? "In a 50/50 schedule the most practical is 2-2-5-5 for younger children, possibly transitioning to a one-week-on, one-week-off schedule for the tween/teen years. What we think is bad for kids is a chopped-up schedule where a child has to go back and forth every day."

Summary

Due to the emphasis on preserving the "status quo" by identifying the "primary caregiver" and the difficulty of modifying custody, New Hampshire rewards pre-lawsuit planning more than most states. In a two-career household, for example, the spouse who expects to file a lawsuit can prepare by voluntarily assuming most child-care duties during the year prior to suing the unwary co-parent. In the event of a sole custody award, this year of extra effort with the children could easily yield $1 million or more in tax-free child support (over and above the actual cost of the children during up to 18 years of collection).

Due to the lack of a cap on child support, New Hampshire rewards the search for a high-income one-night partner more richly than most states. Due to the lack of cap and the ease of calculating child support at high income levels, New Hampshire encourages the marketing of abortions following casual encounters with high-income individuals (see the Massachusetts chapter for how this works in practice).

More: read the rest of Real World Divorce: web edition | Kindle edition