Florida alimony profits and child custody litigation preserved by governor’s veto

“[Governor] Scott scuttles Florida alimony overhaul, citing child custody clause” describes a veto by Florida’s Governor Rick Scott of a bill passed by the state’s legislature that could have reduced alimony profits and custody litigation in the state.

See this Florida family law chapter for a description of the current law. Florida is unusual in offering “permanent alimony” after potentially just 7 years of marriage. This leads to stories like the following, from the Summary chapter:

a 50-year-old business manager who was between jobs told us about his first consultation with a top practitioner in Florida, a state that offers permanent alimony. His wife earned $220,000 consulting to government agencies and was divorcing him after more than 20 years of marriage (the youngest child had just turned 18 and thus aged out of the child support system). “The lawyer told me to go out immediately and rent the most expensive apartment in the city. She said ‘Start seeing this therapist right now. She is going to come testify that you are clinically depressed and will never be able to work again. My retainer is a non-refundable $10,000.'”

Florida offers unlimited child support profits, albeit at a smaller percentage of the defendant’s income than Massachusetts or Wisconsin. The precise profitability of a child is based on the division of the child’s time between the two litigants. Florida has no guidelines regarding a child’s schedule with the two litigants. As in other states with unlimited child profitability, profitability that is dependent on the schedule, and no guidelines for the schedule, this typically leads to 50-100 percent of the litigants’ combined assets being spent on legal fees. As in other states, however, it is typical for there to be a “primary” or “winner” parent and a “secondary” or “loser” parent. The child spends most of his or her time with the winner parent and the loser parent pays all of the child’s bills as well as most of the winner parent’s bills (assuming the winner parent wasn’t unwise enough to procreate with an impoverished defendant). Florida is a better-than-average state for men seeking to profit from the family law system. Census 2014 data show that 16 percent of Floridians profiting from child support are men, compared to only 3 percent in Massachusetts or 2 percent in Maryland.

The law that was passed by the legislature, Senate Bill 668, risked reducing the profitability of divorce lawsuits for both plaintiffs and attorneys by suggesting that alimony cashflow be a function of “time served” in the marriage. This is an increasingly common practice in other U.S. states, except where states, such as Texas, have gone to a German-style “no alimony” system. The proposed 50/50 custody default “premise”, not in any way binding on judges, would have brought Florida into line with just a handful of states, such as Alaska, Arizona, and Delaware that have a 50/50 custody presumption or guideline. (Note that largest studies of children of separated parents show that a 50/50 schedule is best for children (references; discussion).)

[If you dig into the text of the law, it is plain that there would still be plenty to fight about. Judges are encouraged to consider domestic violence allegations, for example, when awarding custody of cashflow-positive children. Judges are encouraged to speculate regarding what a defendant might be able to earn in a hypothetical perfect world: “‘Potential income’ means income which could be earned by a party using his or her best efforts and includes potential income from employment and potential income from the investment of assets or use of property.” This speculation is to include what “a party could reasonably expect to earn from the investment of his or her assets or the use of his or her property in a financially prudent manner.” (This does raise the question of why a judge who actually did know what different investment classes are going to return would continue to work as a judge. He or she could become infinitely rich on Wall Street with leveraged futures and options investments based on that knowledge.) Judges are instructed to hear evidence from both sides regarding what is “the customary retirement age” in an alimony defendant’s occupation and whether the alimony lawsuit loser’s “retirement is reasonable upon consideration of the [payor’s] age, health, and motivation for retirement and the financial impact on the [alimony recipient]”.]

The governor’s veto letter is interesting. for what it reveals about American attitudes toward family law. First is that years of litigation is the natural end of a sexual relationship between two Americans. There is no suggestion that American parents could separate via an administrative process as in some European countries. Some of the most successful lawyers whom we interviewed thought it was nonsensical to have litigated no-fault divorces, i.e., lawsuits that the plaintiff has a 100 percent chance of winning. Here’s an excerpt from Angie Hallier, a top Arizona litigator:

Existing divorce law in the United States says the only way to end your marriage is for one party to file a lawsuit against the other. … Divorce, by law, starts as an adversarial act. … Our legal system was set up to address wrongs. It deals with criminals. It decides who’s in the wrong when there’s a car wreck, or whether someone is guilty of medical malpractice when healthcare goes awry. When divorce laws were first written, somebody had to be in the wrong before a divorce could be granted. … Today, the litigation model of divorce still stands, despite the fact that no-fault divorce is the norm. … This adversarial system helps no one in the end.

Apparently what Hallier calls “this adversarial system” is helping at least some folks in Florida because nobody seriously contemplates replacing it! Certainly during our March/April trip to Ft. Lauderdale we saw plenty of billboards advertising the services of litigators, primarily those claiming to specialize in lawsuits regarding the profitability of children.

Second is the conflation of marriage and divorce with child custody litigation: “I would like to commend Senators … for their diligent efforts to reform Florida’s dissolution of marriage and alimony laws … child custody laws have evoked passionate reactions … because divorce affects families in many different ways.” In fact, the typical American child whose life is disposed of by a family court is not the subject of divorce litigation because the biological parents were never married and, indeed, may be only slightly acquainted.

Third is that spending 100 percent of the parents’ assets on legal fees through years of litigation results in some kind of thoughtfully customized schedule for children. The Governor writes “when a divorce involves a minor child [again, the conflation of marriage with child custody and child support litigation], the needs of the child must come before all others. … Our judges must consider each family’s unique situation and abilities and put the best interests of the child above all else.” (Again, note the use of the term “family” to describe two litigants who might have been acquainted for just one evening.) “Every child and/or family is unique” is a constant refrain throughout the American custody and child support litigation industry and yet the outcome of nearly all the cases is the same: every other weekend with the loser parent. (Texas is the only state that has been willing to tell litigants “You’re not special and your kids are probably not special; if you don’t agree on a schedule for your kids then you’ll find one in the statute [a 57/43 winner/loser time split].”)

What are the practical implications for citizens? If you’re the higher earning spouse and want to avoid giving your current partner an incentive to sue you, but without going to a state that imposes an income tax, move to Texas (no alimony; capped child support). If you’re a Floridian seeking to profit from the family law system, apparently one safe way to do that is to become a divorce litigator. The governor will apparently work to ensure that there is plenty at stake for parents to fight about. (A competent divorce litigator in Boston makes at least $1 million per year, according to a lawyer interviewed here; Florida is probably somewhat less lucrative due to the lower child support stakes.)

The legislature seems to be intent on shutting down the permanent alimony system and may yet succeed. Alimony is taxable whereas child support is tax-free. These two factors make out-of-wedlock children almost surely more profitable and lower risk than marriage+children. Lawyers we interviewed pointed out that their plaintiff clients were able to find higher-income partners for unmarried sex than to agree to a marriage. Thus child support revenue for a single child will be higher if the child wasn’t conceived as part of a marriage. Florida’s child support formula makes it more lucrative to have multiple children with multiple partners than multiple children with the same partner, e.g., if suing partners with a net annual income of $120,000 per year, three children with the same partner yield $637,260 over 19 years but $982,908 if there are three different co-parents (Florida gives a winner parent a cash incentive to discourage children from graduating high school on time as the cash continues to flow to age 19 only if the child has not yet graduated).

Foreigners can profit from Florida’s system most easily as explained in the “American Child Support Profits Without an American Child” section of “Child Support Litigation without a Marriage”:

The second method can be used by foreigners temporarily in the U.S., e.g., for seasonal resort employment. Businesses on Cape Cod and Martha’s Vineyard, for example, rely heavily on young Bulgarian, Serbian, Russian, and other Eastern European workers. If one of them were to have a one-night encounter with a hotel guest earning at least $250,000 per year, then return to Eastern Europe, she could be assured of at least $40,000 per year in child support under the Massachusetts guidelines. This is more than six times the average net salary of $528 per month in Serbia and more than eight times the average net salary of $400 per month in Bulgaria. We asked Jerry Nissenbaum, a Massachusetts divorce litigator, what practical steps would be required for this to work. He responded “She’ll go back to Bulgaria and stay a year or so to bond with the child and not let dad bond (she doesn’t want to get stuck here). Then she comes back with the baby, files a complaint, gets the $40,000 order. The Massachusetts Department of Revenue will collect it for her and send it to her US-based bank account that she can use with a debit card in Bulgaria, or wherever she is in the world.”

Due to Federal funding conditional on successfully suing residents, the Florida Department of Revenue will presumably be equally happy to assist any foreigner with a child support claim against a Florida native. (Note that a plaintiff shouldn’t wait more than two years after the child’s birth to notify the Department of Revenue and/or file a lawsuit through a private attorney. The Florida guidelines limit retroactive support to “24 months preceding the filing of the petition,” unlike in some states where a plaintiff can wait until a day before a child’s 18th birthday and successfully sue for 18 years of child support cash.

Florida readers: What do you think of your governor acting to preserve the status quo?