Interest in a Dispensary - by Dale E. Johnson

In a divorce context, does the valuation of an interest in a marijuana dispensary or grow business differ from the valuation of other businesses?  Because marijuana businesses are legal in Colorado but not legal under federal law, the taxation of profits and expensing of costs differs dramatically from other businesses.  How does this difference impact the valuation process?  A typical method for valuing a spouse’s interest in a business entity is based upon earnings, both historical and future.  But if the gross revenues for a marijuana business are subject to different tax and expense rules, what adjustments have to be made by the valuation expert?  Is it certain that the federal government will continue to have a “hands off” policy towards marijuana businesses?  Does the uncertainty over the federal government’s policy increase the risk factors associated with an interest in a marijuana business?  If so, does that also increase the discounts that should apply to a fair market value?  Are there other risk factors that should be applied to a marijuana business?

Colorado was one of the first states to legalize marijuana but, as of yet, we have no reported decisions from our appellate Courts regarding the rules for valuing interests in a marijuana business as part of a property division in a divorce.  These businesses generate significant revenue. The next few years should see these cases make their way through the Colorado Appellate Courts.

Relief for Support - by Dale E. Johnson

The Colorado Court of Appeals has recently opened the door for equitable relief for obligors who owe years of unpaid court ordered child support or maintenance who believed they did not have to pay due to conduct of the obligee.  While the new defenses are not easy to prove, they at least are now available.  Before now, they were not available at all in Colorado.  If you have a child support or maintenance obligation, it is important that you comply.  It is best not to rely on oral promises that you do not have to pay or that the payments will be forgiven.  Seek legal advice about the obligation and whether it can be modified.  But, if you did not pay because the other party led you to believe you didn’t have to, you now may have a defense.  It all depends on the facts.

Frozen Embryos - by Dale E. Johnson

As a Fellow in the American Academy of Matrimonial Lawyers, I am always pleased when the Colorado Supreme Court asks us to file an Amicus Brief on a pending case.  We have been asked to file a Brief in the pending In Re Marriage of Rooks case, which deals with the Court’s authority to determine the disposition of frozen embryos.  In Rooks, the contract signed by the parties with the reproduction center, did not include agreement as to what would happen to the embryos if the parties divorced.  As part of the divorce, mother wanted the embryos awarded to here, whereas father wanted them destroyed.  The trial court weighed various facts and ordered them destroyed.  Should a court ever have authority to order otherwise where the contract is silent on the issue?  Should Colorado reproductive centers be required to include provisions regarding what would happen to frozen embryos if the parties divorced?  The Supreme Court’s decision should come later this year.

GUARDIAN AD LITEM - by Dale E. Johnson

There is a bill circulating in the Colorado Legislature which would set statutory standards for appointing a Guardian ad Litem (“GAL”) for an adult.  The standards the courts current use have been created via judicial decisions, including IRM Sorensen (2007 Colorado Court of Appeals).  The current draft of the proposed bill would expand the authority of the court to “sua sponte” appoint a Guardian ad Litem for a party.  This means the court could appoint a Guardian ad Litem without waiting for a party to file a motion.  The bill provides five different grounds for appointing a Guardian ad Litem.  One of these is that the litigant is “incapable, because of a mental impairment, of weighing the advice of counsel or directing counsel on the particular course to pursue in his or her own “interest.”  This is a highly subjective assessment of a litigant’s level of functioning for a court to make on its own without an attorney for a party bringing the matter before the court.

The Colorado Legislative session is nearing a close.  It will be interesting to see if this bill is passed into law.

Transgender Birth Certificate Bill Does not Pass Colorado State Senate - by Evan Branigan

For the third consecutive year, a bill to allow transgender individuals to change their birth certificate to reflect their current gender identity failed in the Colorado State Senate. The bill was killed in the Senate State, Veterans, and Military Affairs Committee on a 3-2 party-line vote with all three Republicans opposing.

 The Colorado legislature recently simplified the process to restore a prior name after a decree of dissolution or legal separation has been entered when Governor Hickenlooper signed  House Bill 16-1085 on March 31, 2016. This law clarifies that a party need not conduct a fingerprint-based background check and publication of their name when restoring a prior name before marriage.

 If you have any questions about restoring your name, please call Dale E. Johnson, P.C. to set up an appointment with either Evan or Dale.

Family Law Arbitration - by Dale E. Johnson

This is the time of year when new family law legislation gets introduced into the Colorado legislature.  A proposed bill to provide a simplified family law court system for cases where the total assets do not exceed a certain level appears to be gaining support.  Cases diverted to this system could not have children’s issues but with limited assets and income, a simplified court system would be a benefit to a large number of Coloradoans.  A version of the Uniform Family Law Arbitration Act might also be introduced this year.  Family law arbitration typically relies on simplified procedures to save costs and expedite getting decisions.  This bill would formalize what has, up to now, been a somewhat loose procedure.  And apparently a Boulder legislator is expected to introduce a bill prohibiting CFI’s or PRE’s from making parental responsibilities recommendations.  Such a bill would be highly controversial since one of the chief reasons for CFI’s and PRE’s is to help the court fashion parenting time orders.  Without such recommendations, courts might have to spend significantly more time on these issues with each case or else fall back on “one size fits all” formulas that might not be best for individual cases.

Simplified Family Court - by Dale E. Johnson

End of summer is always an active time of year for new family law proposals being floated or introduced in the Colorado Legislature.  As a former Chair of the Family Law Section of the Colorado Bar Association, I follow these proposed bills.  One bill that bears watching comes from Representative Beth McCann, who was the moving force behind the recent maintenance “formula” statute.  Representative McCann’s new bill would create a Simplified Family Court to handle “small marital estates”.  “Small” is defined as estates where the combined gross income of the parties is less than $80,000 per year, the net marital estate is less than $100,000 and there are no children.  This proposal attempts to address the pro se family law litigation explosion that has buried the District Courts.  It could be one of the most important pieces of family law legislation to be introduced in many years.


New Trust Decanting Statute - by Dale E. Johnson

The Colorado Legislature has recently been discussing whether to pass a version of the Uniform Trust Decanting Act. This bill is of major interest to Colorado matrimonial lawyers because it could, arguably change Colorado law regarding trust interests being marital property in a dissolution of marriage action. The bill authorizes a trustee, under certain circumstances, to move trust assets (“decant”) from one trust to another. There is concern that, if the bill is passed, trustees could “decant” marital trust property interests into non-marital interests as part of divorce planning. This is a bill that is of more than passing interest to many in Boulder County as there are numerous trust beneficiaries residing here.  

"How to Keep a Business Alive After a Divorce" - by Dale E. Johnson

As to follow up to the December 2014 article I wrote for the Colorado Bar Association’s Journal, the Colorado Lawyer, I was interviewed by the Wall Street Journal. While the Wall Street Journal article focused on married but divorcing business partners who might want to stay in business together, I was interviewed regarding how couples going through a divorce had an interest in handling the financial dissolution in the most civil and business-like manner possible. You can read the Wall Street Journal article by clicking the link below.

Holiday Parenting Time - by Dale E. Johnson

            There is an unfortunate tendency for divorcing parents to have difficulties agreeing to when each of them will have parenting time with their children during the holidays. As holidays coincide with a break from the school schedule, children have more available time. In addition, these are special days for parents and extended family. All this can lead to conflict between the parents.

            When parents who are not getting along try to reach agreement regarding holiday parenting time they should keep this in mind. When the children grow up, they will not remember whether the holiday transition occurred on Christmas Eve or some other time on Christmas Day. What they will remember is whether their holiday was warm, friendly, and nurturing, or whether it was nasty and filled with memories of upset parents. If parents keep this one thing in mind, there might be less conflict and happier children this time of year. 

Emotional Separation and Boundaries - by Dale E. Johnson

           The period of separation and divorce is one of the most stressful times that any individual can experience. Unfortunately, that stress often results in individuals treating the other person in rude, aggressive, and controlling ways. The process of divorcing is a process of separating a married couple physically, emotionally, and financially. The process of accepting the reality of the emotional separation is often lost on one or even both of the parties. When children are involved, the problems of emotional separation can impart negative consequences.

            Anyone going through separation and divorce should expect to experience stress. How an individual handles that stress depends upon his or her willingness to accept the reality of what is occurring and the right of the other party to proceed. Where children are involved, the divorcing couple should try to create new balance where there is physical, financial, and some emotional separation but also a reconstructed co-parenting relationship with different boundaries than the couple previously had. Creating this new relationship with these new boundaries is not always easy but the sooner it can be accomplished, the better the children will be likely to fare.

            Counseling and therapy can be important and even necessary tool to help out clients get through this difficult time. We can help refer clients to professionals suited to the particular personalities and issues involved. 

Reasonable Expectations - by Dale E. Johnson

     We recently received a telephone call from someone who wanted a post-nuptial agreement that would “hold up in court,” but where there were no financial disclosures to the attorney.  The caller was unhappy when we explained that he had to provide financial disclosures.  In Colorado, by case law and statute, marital agreements will not “hold up in court” if the person seeking to enforce them has not made full and fair financial disclosures to the other party. 

            It is important that clients understand that lawyers do not have magic wands that allow their clients to accomplish whatever goals they have irrespective of the legal requirements.  The smart client consults with lawyers early on to discuss their goals, whether those goals can reasonably be accomplished and the steps necessary to do so.

            Having reasonable expectations of what the lawyer can accomplish and making plans in accordance with those expectations, is the key to making the system work for you.


Same-Sex Marriage - by Evan Branigan

On June 26, 2015, The U.S. Supreme Court held that the right to marry is guaranteed to same-sex couples under the United State Constitution. This decision abrogates the Colorado Constitution’s prohibition on same-sex marriage which was passed by voters in 2006.

 Boulder’s County Clerk and Recorder, Hillary Hall, began issuing same sex marriage licenses the same day the decision was announced. It’s unclear whether every county in Colorado is already issuing issue same sex marriage licenses—but they are all required to under the Supreme Court’s Obergfell v. Hodges decision.

The Colorado Legislature created Civil Unions in 2014, which confer most—but not all benefits of marital status—on any two Coloradoans who choose to enter a Civil Union. Same sex and opposite sex couples are eligible. One important difference between civil unions and marriage is that the IRS does not consider parties to a civil union as married.  Generally speaking, marriage provides federal tax benefits to some couples and penalizes others. To see whether marital status would reduce your tax bill, the Tax Policy Center has a convenient calculator here:

For some couples, marital status would result in higher federal taxes every year. Such couples may consider entering into a civil union rather than a marriage. That arrangement could save significant money over the course of a marriage. As with all family issues, couples should carefully consider the many benefits and drawbacks before entering into a marriage or civil union. This blog cannot cover every possible ramification but we encourage you to contact us to set up an initial consultation where we can review your options.

Looking Before You Leap - by Dale E. Johnson

     Many people who are moving to a dissolution of marriage become fixated on “getting it over with” as the first priority.  This is almost always a mistake.  Impulsivity can lead to serious errors being made.

     If a lawyer is consulted too late in the process, actions may have been taken or binding arrangements made on parts of the issues that then prejudice an equitable resolution of the other issues.  The fairness of a financial statement must be viewed as a whole.  If you are heading towards a dissolution of marriage, spending an hour early on with competent legal counsel can provide you with information and insight that will be invaluable.

     This office charges a reduced rate for the initial one-hour consultation.  Whether you proceed with full legal representation or not, that hour may save you a great deal of time and money.  However, the earlier you see an attorney, the sooner you’ll have the information you need to protect yourself.

Facebook and Divorce - by Evan Branigan

According to the ABA Journal, a New York Judge allowed a Wife to serve her husband with a divorce summons via facebook.

 To be clear, changing your facebook relationship status from "Married" to "Single" won't start the divorce process in Colorado. To get divorced in Colorado, a spouse must file a case. Before a Court has the authority to grant a divorce, the Court must find that the other spouse was properly served. In Colorado, these procedures are found in Rule 4 of the Colorado Rules of Civil Procedure. 

Ordinarily, spouses voluntarily "accept" service by signing a document accepting that they are on notice of the case. But occasionally a spouse does not agree to accept service and requires the filing spouse to formally serve him or her. Personal service is ordinarily accomplished by a process server who hand delivers the documents to the person being served. There are special rules in cases where the other party is outside of the state of Colorado. In some cases, tracking down a person can be costly. 

In rare cases, the other spouse cannot be found. Fortunately, Colorado law allows spouses filing for divorce to serve their spouse through other means, by, for example, publishing notice in a newspaper. The divorcing spouse in the New York case proposed a creative way to serve her husband -- by sending the notice through a facebook message. 

The determination of whether service is adequate depends on the particular facts and circumstances of each individual case. Moreover, a Colorado Court may have jurisdiction to grant a divorce but lack jurisdiction to enter Orders respecting children and/or dividing property.  

Every case is different; be sure to consult with a qualified attorney if you need legal advice about this issue.

Consulting Services

Lawyers often are asked to consult rather than serve in a representative role.  There is a long history of lawyers consulting with other lawyers regarding areas of the law where specific expertise is needed.  For example, our firm handles only family law cases.  While we have some familiarity with other areas of the law, we often work with consulting attorneys whose expertise in a specific area is beyond ours.  For example, while we frequently work with divorce taxation issues, we often consult with tax lawyers or accountants where complex issues are involved.

In 1971 when I started practicing law, family law lawyers did not offer consulting services with clients.  The lawyer either represented a client or did not.  But over time, the “unbundling” of legal services has allowed for family law lawyers to offer ongoing consulting services.  Parties who want some ongoing legal advice but want to operate pro se to save attorney’s fees now can find more lawyers willing to act as consultants.

Not every case is one where an attorney will feel comfortable acting in a consulting role.  To protect the client, it is sometimes necessary to decline a consulting role and insist the client seek full representation.  It all depends upon the facts, and the complexity of the issues involved. 

If you are thinking about using an attorney as a consultant, make certain you are fully advised of the benefits as well as the risks involved so that you can make an informed decision.

Family Law Legislation

This time of year, a number of bills are introduced into the Colorado legislature.  Usually, there are some that deal specifically with family law.  This year we have several.  One, in particular, is highly controversial.  Senate Bill 15-129 (“SB15-129”) would require Judges to presume equal parenting time for children, irrespective of their age, and the parenting abilities and skills of their parents.  This would also restrict Child and Family Investigator (CFI) and Parental Responsibility evaluations (PRE) by not allowing them to make recommendations.  The presumption compromises the current “best interests” standard that requires the Court to look at each individual case and determine what is best for children.  This bill is opposed by many professional groups as being contrary to the established research on what is best for children.  It also has serious constitutional problems.  If you are concerned about these kinds of presumptions being applied to children, you should contact your legislator.

 On another issue, The Colorado Chapter of the American Academy of Matrimonial Lawyers presents an annual one day advanced topics seminar for family law attorneys, judges, and mediators.  This year the seminar will be held on Friday, December 4, 2015.  The location will be the Doubletree in Denver where we have held the seminar for the last several years.  As past Chair of the Colorado Chapter, I wanted to announce this date on our website as soon as we had the date and place confirmed.  This seminar is the premier family law seminar in Colorado and I encourage attorneys to mark your calendars and save the date.

After Your Divorce is Final - by Dale E. Johnson

After your dissolution of marriage decree is entered, there are a number of tasks that should be completed.  Here are a few tasks that generally have to be considered:

1.    See your estate planning lawyer and review your will and any estate planning.  Make sure the life insurance beneficiary designations comply with the final court orders.

2.    See your accountant to review how your marital status affects new withholding and other tax planning.  If maintenance and child support are being paid or received, your tax liabilities will be affected.

3.   If any tax-deferred accounts are to be divided and awarded to you, make sure the final divisions are accomplished as soon as possible.  Some tax-deferred divisions require Qualified Domestic Relations Orders or Domestic Relations Orders in order to be finalized.  It is also critical to update your beneficiary designations with each of your bank, retirement, and investment accounts.

4.   Unless specifically agreed otherwise, close all joint accounts and credit cards.  One of the goals of any dissolution of marriage is separating you financially from your spouse.

5.   Execute all deeds and change of title as soon as possible.

6.   Keep a checklist of all post-decree follow-up tasks and make sure you and your ex-spouse take care of completing all of them.

Common Law Marriage

Colorado is one of a handful of states that recognizes common law marriage.  This doctrine arose from English common law.  Though most states have abolished common marriage, attempts to abolish common law marriage in Colorado have always failed. 

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