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Posts by aedwards

Is a 529 College Savings Plan a Gift to a Child or Marital Property?

Is a 529 College Savings Plan a Gift to a Child or Marital Property?

Is a 529 College Savings Plan a Gift to a Child or Marital Property? By Amy A. Edwards Yesterday, the NC Court of Appeals addressed this question in Berens v. Berens. This was a case of first impression, meaning our courts have not yet made any decision on this subject. The Court defines 529 plan as “investment programs permit parents to set aside money for their children’s college expenses under tax-favorable conditions.” In the Berens case, the parents funded several 529 plans for their children while they were married and before they separated. The First Trial: Marital Property The lower court said the funds in the plans were marital property, and then awarded them to Mom as marital assets. She disagreed with that, and appealed the case, arguing that the money invested in the plans were gifts to each child, not marital property. And therefore, the court had no jurisdiction over the plans because they were not marital property. The Court of Appeals disagreed with her. The Appeal: Marital Property In this particular case, the Court of Appeals said the funds were not gifts to the children because they were all in Mom’s name alone. Besides the intent to give the gift to someone, a gift is only a gift if it is actually given to someone. Here, Mom failed to give a gift because no child was a named owner. Had the plans been gifts, each child would’ve had “all right, title, and control over the property.” Just because a 529 plan gives an owner a special tax benefit doesn’t mean it changes ownership. Although each child was a beneficiary, the plans were still owned by Mom. Therefore, she had the ability to spend the funds in any way see saw fit.  Amy A. Edwards is a family law attorney in Greenville, NC, certified by the NC State Bar Board of Legal Specialization as a Family Law Specialist, and is licensed only in NC. Laws change. This article is current as of 2018. www.AmyEdwardsFamilyLaw.com ©...

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Clients and Attorneys Going in Different Directions: Marital Fault or Bad Behavior by the Other Parent

Clients and Attorneys Going in Different Directions: Marital Fault or Bad Behavior by the Other Parent

Clients and Attorneys Going in Different Directions:  Marital Fault or Bad Behavior by the Other Parent In the Beginning . . .  By the time someone talks with an attorney about a divorce or a custody case, it is safe to say that it isn’t because something great just happened. Most people are struggling to make sense of what has just happened to them, or what finally became the last straw. Clients are devastated, shocked, angry, traumatized and anxious to vent about how the other person has betrayed and hurt them. Each case is unique but this article is a general response to a common question that clients ask me: Why are we worrying about this [insert something that’s tedious and dull] when I can prove my ex did [insert something that’s awful and life-changing]. What’s Your Attorney Doing? Meanwhile, after you have bared your soul to the attorney and handed a check or credit card to the receptionist, the attorney and his or her staff members are doing lots of busy-work.  All they appear to be doing is wasting time, filing court paperwork, gathering tons of financial records, drafting financial affidavits (budgets for court), listing details of property and debts, and perhaps doing discovery and then mediation. Clients quickly become disappointed and frustrated once they discover that fault and bad behavior won’t usually be addressed in depth until after all of that is completed, and then a trial. Unfortunately, it can easily take a year after you start the court process for a judge to make the final ruling on your case.   What Are Your Attorney’s Priorities? It might seem like your attorney isn’t really listening to what’s important to you, or that his or her goals appear to be at odds with yours. This legal process is backwards in the sense that clients have to deal with serious emotional turmoil and upheaval at the beginning of a case, but your attorney must work with an eye towards the end of a case. This means that the attorney might have to set aside what’s right and wrong at the beginning of a case to start building a foundation for the case before reaching those matters. One of the hardest lessons I learned upon my arrival at law school was that courts don’t dole out justice. In fact, they usually don’t focus on justice. Instead, courts apply the law to the facts of each case. The law must be your attorney’s priority. Attorneys...

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My Ex Is Using the Attorney That I’m Paying For!

My Ex Is Using the Attorney That I’m Paying For!

My Ex Is Using the Attorney That I’m Paying For! By Amy A. Edwards The Attorney Client Relationship Clients can be resentful that their attorney is wasting time dealing with the pro se person. In most family law cases, each person has an attorney. When the other person is pro se, Latin for representing himself or herself, lawyers aren’t working for the pro se person and charging you for it as clients sometimes think. That is prohibited. An attorney may represent only one person in a family law case, such as a divorce or child custody case. Failure to do that is usually a conflict of interest. That means what is good for one person might be a bad thing for the other person. For example, if one spouse gets alimony that’s a good thing for him or her, but it is might be a bad thing for the other spouse. The lawyer has to choose one person or the other as a client. What’s Different? If your ex had an attorney, your attorney would have to talk with the other about settlement, discovery (documents, etc.), trial matters, and logistics of court events such as depositions. In other words, your attorney would still be taking time to talk with the other attorney. It doesn’t always take more time than it would to negotiate with an attorney. In fact, some people without attorneys are anxious to get down to business instead of posturing the way other attorneys will because they want to avoid court. The Law and Equality The law requires everyone to be treated in the same way, regardless of whether they have an attorney or not. The same deadlines, rules, laws and other requirements apply to both sides. In the eyes of the law, people shouldn’t be penalized if they cannot afford an attorney. But the judge is still bound by the law. Judges have to walk a fine line in these cases. Attorneys also have to be very careful when communicating with a pro se person. We certainly can’t give them legal advice but sometimes we do explain the reasons why the offer we are making on behalf of our client is a good one. Depending on the circumstances, the attorney will tell the pro se person that he or should talk with an attorney. Same Rules as Everyone Else But . . . Attorneys have specific...

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What Do All Those Child Custody Labels Really Mean?

What Do All Those Child Custody Labels  Really Mean?

What Do All Those Child Custody Labels Really Mean? (Part 1 of 2) This article focuses on legal custody. Parents will fight tooth and nail about what kind of custody each of them should have. They are extremely concerned about the term custody. There are many parenting labels including visitation, joint custody, sole custody, physical custody and legal custody. Our state statute doesn’t help much. In fact, it probably creates more confusion. NC Gen. Stat. §50-13.1(a) states: Unless a contrary intent is clear, the word “custody” shall be deemed to include custody or visitation or both.” However, our case law and the NC Child Support Guidelines do give us more details about those labels. I’ve tried to avoid legalese, but some of it is inevitable. Our Changing Values  Unlike some states, our state law doesn’t start by assuming that any particular type of custody will exist. But a few years ago, it came just shy of it when the state policy was written to promote “child-centered parenting . . . and encourage . . . court practices that reflect the active and ongoing participation of both parents in the child’s life and contact with both parents when such is in the child’s best interest…” NC Gen. Stat. §50-13.01. This was significant because it wasn’t too many years ago that courts almost automatically gave moms custody of young children. The now debunked law of traditional custody, called the Tender Years Doctrine, assumed young children of tender years should be with their mothers if at all possible. Now, if either parent requests joint custody, the court is legally obligated to consider it. NC Gen. Stat. §50-13.2(a). Legal Custody (Parenting Decisions) Legal custody is decision-making custody, the right to make significant long-term decisions that impact a child’s life and welfare, such as a child’s education, health, medical care, discipline, and religious training, to name a few. Contrast that with physical custody, the day-to-day decision-making such as what bed-time is best or how long a child may spend on social media on a school night. There are three types of legal custody. Joint Legal Custody The trend these days is to award joint legal custody to parents, meaning that both parents equally share the decision-making. Ironically, when parents share joint custody, neither parent can veto the other, so neither parent really has any more rights to make a decision than the other. But, the system of checks and balances provides some incentive for decent behavior. If one parent acts badly or makes poor decisions,...

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21 Divorce Experts All Share Their #1 Tip

21 Divorce Experts All Share Their #1 Tip

    21 Divorce Experts All Share Their #1 Tip We’re excited to share this article, in which Ms. Edwards is featured as #16 ...

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