This blog continues to focus on some of the procedural and substantive legal changes that resulted from the 2021-2022 Legislative Session.
2021 Act 204: Codifying Keller and Creating Uniformity in Procedure
In addition to some of the procedural statutory updates in the last blog post, a new procedural format was established for litigants in family court cases. This change, while procedural in nature, does have substantive legal implications for both lawyers and litigants.
This bill amends Wis. Stat. § 767.35(3) and creates Wis. Stat. § 767.33, addressing stipulations that are filed prior to the entry of judgment in divorces, legal separations and annulments. The Act would create a statute to permit Judges to enter the terms of certain stipulations as initial orders before judgment in actions for divorce, legal separation and annulment. Essentially, the new statute aims to codify the ruling in Keller[i]. The statute requires that before entering an initial order adopting the stipulation of the parties, the Judge must hold a hearing, on the record, to ensure the agreement is understood and accepted by all parties. The hearing must also include the parties and the child support agency, if a party to a case. However, the new statute does allow the Court to accommodate parties and allow them to appear at this hearing via telephone or video, if good cause is shown. For agreements addressing legal custody and physical placement, if the parties confirm the agreement and the Court finds the agreement is in the best interest of the children, the Court can adopt it as an initial order when entered. The statute clarifies the date of entry of the order is the trigger date for modification relating to legal custody and physical placement, not the date of the entry of judgment. The newly created statute also addresses stipulations relating to child support, maintenance and property division. The statute permits the approval of these stipulations, provided the parties comply with all statutory requirements, including statutory guidelines for future modifications of support. The statute does not prevent the application of enforceable orders prior to the judgment of divorce. In short, this statute specifically states that the hearing requirement is not intended to apply to parties’ Temporary Orders during the pendency of a case. Out of all the procedural legislation filed this Session, this statute will likely have the most pronounced difference for attorneys’ practice and Courts, as the submission of partial agreements during a divorce is a frequent practice. Act 204 became effective on March 20, 2022.
In addition to the procedural bills described in this article, the Wisconsin Legislature passed additional bills that substantively impact support orders in certain situations as well as placement determinations in cases in which a parent is deployed in the military.
2021 Act 35: Eliminating Family Support and Restructuring DCF 150 Child Support Provisions
Effective May 23, 2021, the option of “family support” no longer exists for new support orders. However, existing family support orders remain in effect. Family support was a blend of child support and maintenance payments mainly designed to maximize tax benefits to families in certain situations. Because maintenance is no longer deductible to the payor, and no longer income to the recipient, family support as a separate type of support designation is no longer needed.[ii]
Act 35 also provided for restructuring of Wisconsin Administrative Code Chapter DCF150, effective December 1, 2021. This restructure complements the cultural and legal shift toward more shared placement, and thus more shared placement child support calculations. The reorganization reflects that shared placement is now the primary method used to calculate support. There are no substantive revisions to the calculations themselves.[iii]
2021 Act 160: Excluding Variable Housing Costs From “Gross Income”
2021 Act 160, effective March 13, 2022, amends the definition of “gross income” under DCF 150 to include basic military allowances for subsistence and housing but exclude “amounts attributable to area variable housing costs” for military service members.[iv]
2021 Act 259: Creating Clarity and Uniformity in Annual Exchange of Financial Information; Also Adding Maintenance Cases to the Requirement
First, 2021 Act 259 amends Wis. Stat. § 767.54, which addresses the exchange of financial information in family related cases involving the payment of family support, maintenance and child support. The statute now requires that all financial information be exchanged “no later than May 1, unless otherwise agreed upon in writing by the parties.” The revisions to the statute elucidate the specific financial documents now required: (1) a complete copy of the parties’ state and federal income tax returns, in addition to all W-2 and 1099 forms; (2) the parties’ last paystubs from all sources of employment for the previous year; (3) the parties’ most recent paystub, from all sources of employment, showing year-to-date gross and net income from the current year; and (4) any other documentation of the parties’ income from all sources of employment. The revised statute also specifically addresses what information can be redacted from this exchange of information and adds maintenance cases to the types of support for which exchange is required. The effective date of this revision is April 17, 2022.
[i] Keller v. Keller, 214 Wis.2d 32, 571 N.W.2d 182 (Ct. App. 1997).
[ii] See 26 USC §§71; 215.
[iii] See, generally, Chapter DCF 150. Highlights of the changes include a retitling of DCF 150 to “Child Support Standard” instead of the previous “Child Support Percentage of Income Standard.” Act 35 also created a new definition set forth in DCF 150.101(9m) as the “designated percentage,” which is the new terminology to refer to the applicable percentage of a parent’s income available for child support. Finally, the shared placement formula is no longer designated as a “special circumstance” and will be contained in its own section, DCF 150.035, which appears as the initial possible method of calculating support in (1), followed by the old percentage method of determining the support obligation of “non-shared” placement parents in (2) and other existing variations thereafter.
[iv] DCF 150.02 (13) (a) 8.