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Pertinent Information As It Relates To New Jersey Family Laws

IS IT A PROBLEM THAT TWO DIFFERENT JUDGES CAN LOOK AT THE SAME FACTS AND ONE WOULD SAY PERMANENT ALIMONY AND ONE WOULD NOT?

Posted in Alimony, Practice Issues

Last week, I blogged about the fact that the Supreme Court was going to be hearing argument on the Gnall v. Gnall case on November 12, 2014.  I watched part of the argument streaming on the judiciary website and the rest of it later when it was posted to the site.  For those of you who have not read our prior posts on this case, this is the case where the Appellate Division deemed a 15 year marriage to be “long term” and remanded the matter for consideration of permanent alimony.

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Two things were interesting to me about the argument.  First, it appears as though loose language in both the trial court and appellate division decisions may have unnecessarily given rise to the appellate litigation that followed.  Reading the Appellate Division decision, it would have appeared that the trial court’s statement that this is not a 25-30 year marriage was all that was said.  Yet, reviewing the oral argument, it appears as though the trial judge wrote a lengthy opinion that considered all of the alimony factors.  Additionally, we previously blogged that had the Appellate Division added the words “in this case” to the discussion that 15 years was long term meriting a consideration of permanent alimony, the case likely would not have received the attention it got.  The bottom line is that this might have been much ado about nothing but for some imprecise opinion drafting.

What was most interesting about the argument was Justice Albin’s and Justice Patterson’s questions during the argument of one of the groups that filed an amicus brief.  Specifically, they asked whether it was  problematic that two different judges looking at the same facts could give such completely different results – one said permanent and the other said 11 years.  Justice Albin went on to ask something like, ”What doe that project to the public about our ability to apply the rule of law to achieve just results.”

The alimony reformers must have gasped and cheered out loud.  The issue was not one of a judge having the discretion to do justice in a particular case, but rather, that the same case, the very same set of facts, could result in two wildly divergent decisions.  How can the same parties go to courtroom A and get one result and go to courtroom B and get a complete different result on the same set of fact?  This seem to be the cause of some concern by at least these two justices. 

Many of us have been to meetings or seminars where there was a panel of judges who were given the exact same fact pattern and asked to tell how they would rule.  The wide divergence in opinion, much less the lack of uniformity certainly, gives cause for pause.  In fact, Justice Albin asked that given the discretion given to trial judges, couldn’t an Appellate court affirm both an award of permanent alimony and an award of 11 years of alimony in the very same set of facts.  Seemingly, one of these decisions should arguably be an abuse of discretion in that case but likely, both would be affirmed.  There seems to be something unsettling about that.

Whether or not this gives rise to renewed talk about guidelines or whether it was just an interesting intellectual debate remains to be seen.  Until then, the unpredictable application of the law remains an every day possibility.  If litigants are sure of victory and not afraid to try their case, they should think again because you just never know.

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Eric SolotoffEric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Roseland and Morristown, New Jersey offices though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com.

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PARENTS REQUIRED TO PAY $16,000 TOWARD ESTRANGED DAUGHTER’S COLLEGE EDUCATION

Posted in Child Support, Custody, Divorce, Modification, Practice Issues

“Caitlyn’s parents Maura and Michael were young loves. Their marriage only lasted two and a half years but the two say they amicably parented to give their daughter the best life they could.” ABC News Anchor, Wendy Saltzman, reported on last night’s news.

Caitlyn’s parents became estranged from their daughter when “Instead of following our rules, she decided she is going to leave her mother’s house where she was living and move in with her grandparents.”

When it came time for Caitlyn to apply to colleges, her parents made a joint decision they would not contribute to the cost of Caitlyn’s college education unless she attended a college in the State of New Jersey.

Despite not having meaningfully spoken with her parents in over two years, at age 21, Caitlyn approached her parents to contribute to the cost of Temple University, a Pennsylvania State School.

When her parents jointly refused, Caitlyn filed a Motion to intervene in her parents’ divorce action so that she could sue them for the cost of college.  The Court granted Caitlyn’s Motion and the lawsuit went forward with Caitlyn as an intervening party.

On October 31, 2014, a Camden County, New Jersey Court required Caitlyn’s parents to pay $16,000 toward her college tuition at Temple.  This Order was entered without any hearing.

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From a legal perspective, this decision may problematic on several fronts.

We all know that divorced parents in New Jersey are required to pay for college on behalf of their children under the landmark 1982 case, Newburgh v. Arrigo.  The theory is that college is a necessity and divorced parents should pay as a facet of their obligation to provide support to their children.

Among Newburgh’s twelve enumerated factors that a court must consider prior to apportioning college contribution between parents are the following: (1) whether the parent, if still living with the child, would have contributed toward the costs of the requested higher education; and (11) the child’s relationship to the paying parent, including mutual affection and shared goals as well as responsiveness to parental advice and guidance.

As to the eleventh factor, we have seen New Jersey Courts previously deny college contributions on the basis of an estranged relationship between parent and child.

For example, in Gac v. Gac, the New Jersey Supreme Court held that in certain circumstances an estranged non-custodial parent should not be obligated to pay for college.  The Court must examine the following issues:

(a)        What caused the breakdown in the parent-child relationship;

(b)        Whether it is the child that has alienated the non-custodial parent; and

(c)        Whether the non-custodial parent was consulted on the child’s choice of college.

Similarly, in Dahms v. DeSanto, a 2007 Appellate Division Case, the Court reversed a trial court’s decision to compel an alienated non-custodial mother to contribute to the cost of her child’s college education.  On remand, the trial court was required to specifically consider:

(a)        The mother’s limited financial resources;

(b)        The impact of the estrangement and the decision to exclude the mother from the college selection process;

(c)        The root factors as to the breakdown; and

(d)       The lack of evidence of the parents’ agreement to pay for college.

Most recently, in the case of Black v. Black, which I blogged on several months ago, the Court held that while it would enforce an estranged father’s prior  obligation to contribute toward his son’s college costs, such obligation was expressly contingent upon the son’s reciprocal obligation to actively commence and attend joint counseling for the father.

Thus, while Caitlyn’s lawyer, Andrew Rochester, stated, “The law in New Jersey is so clear. It is cut and dry. The law says parents are supposed to contribute to their children’s post-secondary expenses,” an examination of the case law demonstrates this is not so.

The fact is that accordingly to precedent is that New Jersey Courts must carefully examine the issues surrounding the breakdown of the parent-child relationship prior to apportioning college costs.  Here, there was no hearing, no examination of who was at fault for the breakdown, evidence that the parents were not consulted and their opinions not respected.

Moreover, there was no indication that the Court made the parents’ payments conditional upon Caitlyn’s effort to repair the relationship, perhaps even as a condition of the contribution, as in Black.  Rather, all we have here are wildly differing versions of what happened.

However, what I find most striking is the Court did not extensively consider the first Newburgh factor: (1) whether the parent, if still living with the child, would have contributed toward the costs of the requested higher education.

Oftentimes, an examination of this factor requires the Court to speculate as to what the parents would have done had they stayed together and made a joint parenting decision. A typical situation is that a custodial parent seeks contribution from the non-custodial parent because they are unable to come to an agreement and they invite the Court to resolve the dispute on their behalf.

But in this case it seems that the parents were on the same page; there was no need for the Court to speculate as to what their joint decision would have been.  It was the child, Caitlyn, who disagreed with her parents’ joint decision.  The parents were united.

From a Constitutional perspective, therefore, this situation hearkens back to the age-old questions “why do divorced parents have an obligation to contribute to college, but intact parents do not?” Eric Solotoff blogged about this conundrum on March 13, 2014 when Rachel Canning’s story hit the news (remember – that teen who sought and failed to compel her married parents to contribute to her education?).

It seems that the simple act of the parents’ divorce exposed them to an obligation to contribute to their child’s college education even when they were in complete agreement no to contribute.

The parents have stated that they plan to appeal.  It will be interesting to see what the Appellate Division does with this case, particularly because the facts are so unique.

Meanwhile, Caitlyn’s parents were to pay the cost of her tuition yesterday but have stated they will not pay a dime until their daughter re-reestablishes a relationship with them.

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Baer, Eliana T.Eliana T. Baer is a frequent contributor to the New Jersey Family Legal Blog and a member of the Family Law Practice Group of Fox Rothschild LLP. Eliana practices in Fox Rothschild’s Princeton, New Jersey office and focuses her state-wide practice on representing clients on issues relating to divorce, equitable distribution, support, custody, adoption, domestic violence, premarital agreements and Appellate Practice. You can reach Eliana at (609) 895-3344, or etbaer@foxrothschild.com.

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STALKING THE SOUL: CO-PARENTING WITH AN ABUSIVE NARCISSIST (PART II)

Posted in Custody, Divorce, Modification, Practice Issues, Visitation/Parenting Time

“Whereas victims rarely know how to use the law in their favor, the aggressor instinctively deploys the necessary maneuvers.  Abusive behavior can be used to find fault in a divorce action. But how can one keep track of guilt by innuendo?”

–Marie-France Hirigoyen, Stalking the Soul; Emotional Abuse and the Erosion of Identity.

You know you’re co-parenting with a narcissist.  You saw from Part I of this article that perhaps your ex-spouse evades direct questions regarding the children, your ex distorts language and uses innuendo, he or she lies, he or she uses sarcasm, ridicule, contempt and paradox, he or she pits the children against you or against each other, and your ex attempts to dominate you and/or your children.

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Unfortunately, many times there is no meaningful co-parenting with narcissists.  He or she probably does not have the same parenting instincts as you do.  There is no concept of teamwork or cooperation. Many times, children are just the pawns in the narcissist’s quest to dominate and control.

But what can be done?  I often hear from people that they are no match for their ex-spouse when it comes to custody or co-parenting. He or she is simply far too charismatic; the judge or expert will never see through that act. Worse yet, As Hirigoyen points out, a narcissist is adept at using the Court system to his or her advantage and will capitalize on every one of your perceived weaknesses in order to gain a win.

Rest assured, however, there are strategies that can help when it comes to being heard in Court or in an evaluation with a custody expert.  Here are some that I have found are helpful for my clients:

1.         Document Everything:  For example, keep a calendar of every time your ex canceled parenting time.  This will help you when your ex alleges that it was your attempts at alienation that caused him or her to miss out on time with the child.  Remember, narcissists are masters of mirroring – labeling the victim as the aggressor to deflect attention from their own wrongdoing.

2.         Communicate in Writing:  Email or text.  Avoid phone calls. This will help you prove a pattern of conduct.  Otherwise, litigation may devolve into a he-said, she-said exercise.  The judge won’t know who to believe.  Evidence in black and white provides more insight into who may be at fault.

3.         Do Not Engage:  The narcissist loves to engage with you in order to keep a strong hold.  This is not to say that you should just roll  over and accept the narcissist’s abuse.  It means that you need to identify the narcissism and accept that the narcissist says or does certain things as a result.  Let the digs wash over you assuming they don’t materially affect you or your children.  Focus on providing a loving and healthy environment for your children when they are with you.

4.        Stick to the Schedule:  Because narcissists view isolated incidents as global issues, if you change the schedule just a couple of times, in their mind you will “always” be changing things around.  Likewise, don’t make a habit of providing makeup time every time the narcissist does not show up.  They thrive on last-minute schedule changes to create chaos.  Don’t enable him or her by accommodating every unreasonable request.

5.         Seek the Advice of Professionals: If you have children with a narcissist, you are going to need long-term strategies to cope with the difficulties inherent in your daily life.  Family therapists, Law Guardians or Forensic Psychologists can be extremely helpful in navigating these types of issues.

Co-parenting with a narcissist can seem like an exercise in futility.  However, with these strategies, you may be able to minimize some of the conflict and move on with your life.

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Baer, Eliana T.Eliana T. Baer is a frequent contributor to the New Jersey Family Legal Blog and a member of the Family Law Practice Group of Fox Rothschild LLP. Eliana practices in Fox Rothschild’s Princeton, New Jersey office and focuses her state-wide practice on representing clients on issues relating to divorce, equitable distribution, support, custody, adoption, domestic violence, premarital agreements and Appellate Practice. You can reach Eliana at (609) 895-3344, or etbaer@foxrothschild.com.

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GNALL V. GNALL BEING ARGUED BEFORE THE SUPREME COURT TOMORROW

Posted in Alimony

Previously, we have blogged about the Gnall v. Gnall case.  In this case, the Appellate Division deemed a 15 year marriage to be “long term” and remanded the matter for consideration of permanent alimony.  At the time, I noted that:

When laws get changed, the preamble to the statute and/or the legislative history often tells you the perceived need for the change. As an example, when the palimony law, which we have blogged on numerous times before, changed a few years ago, the preamble of the amendment to the statute mentioned several palimony cases that the law sought to overturn. We have also blogged on the possible alimony reform movement. If the reform now passes, I would not be surprised if it is response to Gnall v. Gnall, a published (precedential) Appellate Division opinion decided on August 8, 2013.

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In any event, as we have previously noted, the Supreme Court agreed to hear the Gnall case, and that argument is scheduled for tomorrow – November 12, 2014. 

I was fortunate to be one of the authors of the amicus brief filed by the New Jersey Chapter of the American Academy of Matrimonial Lawyers (AAML).  Interestingly, when we filed the brief, it was before the new alimony reform statute had passed.  It will be interesting to see if that shapes tomorrow’s argument, and more particularly for the Gnalls, whether the new law or old law is to be used on the remand.  Moreover, given the new statute, does this opinion even matter anymore? 

Stay tuned. 

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Eric SolotoffEric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Roseland and Morristown, New Jersey offices though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com.

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WHAT DO YOU MEAN YOU ARE ENFORCING THAT PRENUP THAT WE TORE UP?!?

Posted in Prenuptial Agreements

It is not uncommon for parents of a person that is getting married to demand that their child get a prenuptial agreement to protect the family business, trusts or other assets.  While common, these can be difficult agreements to draft because the couple that is marrying appear to be aligned, and often will agree to terms between themselves, only for different terms to appear in the document, which are far less generous to the other party.

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It would not be shocking to learn that to induce their fiance’ into signing, the person promises that they won’t actually follow it, or they will tear it up after it is signed.  Well, the New York Post, a beacon for interesting divorce news, recently ran a story where the parties did just that.

The story reports that  the groom to be convinced his then-fiancée to sign the prenuptial agreement during their “whirlwind engagement of less than three weeks.” Allegedly, he told her that his father “threatened to cut him off” if he didn’t have an agreement. Further, he allegedly promised her that he would tear it up after the wedding and in fact, on the honeymoon, the parties jointly tore up the prenuptial agreements and threw it into the ocean.

Notwithstanding this act, a New York  judge enforced the prenuptial agreement because the document expressly states that no promises or covenants outside the agreement shall matter or be taken into account and because each party had their own lawyer representing them when entering into the agreement.

How does this square with the Petrakis case that we blogged about last year where a New York court threw out a prenup because it was coerced?  In that case, the husband allegedly promised to “tear up” the prenup when the parties had kids?  What about claims like fraud, fraudulent inducement to contract, detrimental reliance, etc.?  Should one party be bound by the other party’s undisclosed intentions – essentially ignoring the seemingly undisputed words and deeds of the other. 

That said, most agreements specifically have a clause that require all changes to the agreement to be in writing and signed with the same formality as the prenup itself.  Moreover, the New Jersey prenuptial agreement statute specifically says:

After marriage of the parties or the parties establishing a civil union, a premarital or pre-civil union agreement may be amended or revoked only by a written agreement signed by the parties, and the amended agreement or revocation is enforceable without consideration

So, what is the take away.  Sadly, you cannot rely on your spouse to be or spouse’s representation about changing or tearing up a prenup.  Like everything else, you need to get it in writing.

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Eric SolotoffEric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Roseland and Morristown, New Jersey offices though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com.

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B is for Budget – The ABC’s of New Jersey Family Law

Posted in Alimony, Child Support, Divorce, Property Settlement Agreements

How much do we spend each month?

It may easy enough, but preparing a budget in divorce proceedings, or when even just contemplating a separation or divorce can seem next to impossible.  When I first meet with a new client, I give them one of the most heinous forms know to man (and woman)- the Case Information Statement.  is a form that is required by the courts in NJ in most instances when there is a request for support or equitable distribution.  Part D of the form is a budget that is divided into three parts: Shelter, Transportation, and Personal. I tell my clients to take time to complete the form, as it may be one of the most important documents in their case.  A court will use the form to set support obligations which are based on the lifestyle of the marriage. The form is certified to, and it can be fodder for cross examination by the other side if not accurate.

There are actually two budgets that a client has to create in a divorce case. The first is the budget that the parties lived during the marriage,  the “current lifestyle” portion.  It is often difficult to come up with this, even though a litigant has had a long term marriage. Oftentimes, people do not realize how much they spend each month.  While the mortgage and car payment lines are easy, the others, not so much.  For example, the form asks a litigant to differentiate between “groceries and household supplies” and “sundries and non- prescription drugs.”  That’s sure to bring out the deer in the headlight look to even the most organized!

There are practical ways to recreate a realistic budget which represents how the parties lived during the marriage.  Luckily for divorce lawyers, credits cards and debit cards are widely used many purchases and bills are automatically debited from their checking accounts or charged to credit card accounts.  This captures the vast majority of purchases.  Obtaining bank and credit card account statements for the past 18 months (usually the longest time period an account holder can get statements online, or without a cost) can be extremely helpful.  Some credit cards, such as American Express, provide a yearly compilation of charges which are categorized.  This can be extremely helpful when creating a budget based on past practices.Also, litigants who use excel or Quicken on a monthly basis will find this to be invaluable.

Certainly there will be estimates on some categories.  However, it is important to be careful to estimate reasonably. It’s always a problem (at least for one side) when a budget totals $15,000 per month, but the available income from all sources is only $10,000.

 The other budget that is important, particularly for the spouse seeking support, is that of the projected budget. What is it going to cost you to live after the divorce?  This can be much harder because you don’t know how much you will have, you don’t necessarily know where you will live, and you don’t know how much it will cost.  This is where the skills of organization and preparation are most important.  A well versed attorney,  can give parameters of what to reasonably expect.  Then, possibly with the help of an accountant or financial planner, a litigant needs to determine what net amount of income he or she will likely have each month.  Then, creating a budget will be easier. Finding the costs of rentals in the projected area of residence, or likely mortgage and tax payments are critical as in most cases, shelter expenses is a significant portion of one’s budget.  Is your car paid off? Yes, how old is it. Don’t forget to add in a payment if you expect to have to buy a new one within the next few years.  These are questions to be considered when determining reasonable needs moving forward.

Jennifer Weisberg MillnerJennifer Weisberg Millner is a partner in Fox Rothschild LLP’s Family Law Practice Group. Jennifer is resident in the firm’s Princeton Office, although she practices throughout the state. Jennifer can be reached at 609-895-7612 or jmillner@foxrothschild.com.

PALIMONY REVIVED – NOT SO FAST – PART 2

Posted in Palimony

Regular readers of this blog know that we were involved in the landmark palimony case, Maeker v. Ross, which was recently decided by the New Jersey Supreme Court.  We previously blogged about our win in the Appellate Division.

Unfortunately, the Supreme Court reversed, holding that the Legislature could not have intended for the statute to apply retroactively to existing contracts.  This is despite the fact that the statute clearly said that “no action shall be brought” unless the palimony agreement was in writing and the fact that the preamble to the statute specifically cited Supreme Court cases that the statute was meant to overturn.

In perhaps a continuation of the battle royale between the Supreme Court and the Legislature on this issue, on October 27, 2014, Senators Scutari and Cardinale introduced S2553 which made clear that the 2010 statute was intended to apply retroactively.  The synopsis of the statute is as follows:

Makes retroactive current law requiring “palimony”  agreements to be in writing; provides that pre-existing palimony agreements are unenforceable unless put into writing within one year of enactment of this bill.

The statement after the language of the proposed statute is even more clear:

P.L.2009, c.311, enacted January 18, 2010, required that any “palimony” agreement must be in writing to be enforceable. The enactment amended R.S.25:1-5 to provide that a promise by one party to a non-marital personal relationship to provide support or other consideration to the other party, either during the course of such relationship or after its termination, is not binding unless it is in writing and was made with the independent advice of counsel for both parties.

In Maeker v. Ross, 2014 N.J. LEXIS 910, decided September 25, 33 2014, the New Jersey Supreme Court held that the Legislature did not intend the enactment to retroactively apply to palimony agreements made prior to the effective date of the enactment, and that such pre-existing palimony agreements are enforceable even if they were never put into writing. This bill would address the court’s decision by clarifying that P.L.2009, c.311 is intended to be retroactive. This bill provides that palimony agreements made prior to January 18, 2010, the effective date of P.L.2009, c.311, would be enforceable only if they are brought into compliance with P.L.2009,c.311 within one year of the effective date of this bill.

In essence, the concept of the ability to cure – that is, to get a writing put into place to confirm the existence of the palimony agreement – would be codified.

While this is a small measure of vindication for our position, who knows if it will be passed.  Stay tuned.

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Eric SolotoffEric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Roseland and Morristown, New Jersey offices though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com.

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RETIREMENT AND ALIMONY MODIFICATION: THE APPELLATE DIVISION WEIGHS IN

Posted in Uncategorized

Ah, retirement.  Your golden ticket.  You have visions of laying out on the beach, taking mid-day naps and going fishing with your grandchildren.  Sometimes, it’s the only thing that gets you through your long, arduous work day.  You plan, you scrimp, and you save; all in anticipation of that glorious moment where you walk out of your job for the last time.

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But, if you are a payor of alimony, those visions become more illusory, maybe even just wishful thinking.  Many considerations may come in to play; considerations that likely are not in that employee handbook you may have consulted when setting up your 401(k).  For example, will you be permitted to reduce your alimony obligation upon retirement?  How do you create a retirement savings plan that may need to take into account continued alimony or equitable distribution payments to your former spouse?

On the flip side, if you are the spouse receiving alimony, you need to plan for the potential that your income may be drastically reduced upon retirement due to the cessation of alimony payments.

Unfortunately, many of the issues surrounding retirement are not addressed at the time of the divorce, leading to potentially protected litigation regarding the finer factual disputes as to the retiring parties’ respective incomes and financial circumstances.  Part of the reason for that is that in New Jersey, there is a lack of real guidance as to when a paying spouse can retire in good faith and reduce or terminate their alimony payments.

In a recent reported decision, Krupinski v. Krupinski, the New Jersey Appellate Division tackled some of these muddy issues surrounding alimony and retirement head on.  Namely, what effect does a payee spouse’s receipt of pension benefits have on the payor spouse’s obligation to pay alimony?

In Krupinski, the parties were married in 1968, and separated twenty years later on October 24, 1988. The husband was a public school teacher at the time the parties separated in 1988, earning an annual salary of $45,798.28. He was enrolled in the Public Employment Retirement System (PERS). With respect to the equitable distribution of defendant’s pension benefits, Paragraph 14 of the Property Settlement Agreement (PSA) provided as follows:

It is agreed that at such time as the Husband starts to draw his pension, the Wife shall be entitled to one-third of each of the periodic pension payments made to the Husband. The Husband further agrees to execute such qualifying domestic relations order [QDRO] as may be necessary to direct the organization administering the pension to make the Wife’s one-third share of each pension payment directly to the Wife.

The husband was sixty-four years old when he retired on April 1, 2010 and he began receiving pension benefits on May 1, 2010, triggering the wife’s right to receive her share of the PERS pension benefit, per the parties’ PSA.

A fact found to be of notable importance by the Appellate Division was that following the divorce, the husband attained as Masters Degree, and was therefore elevated to school administrator. He ultimately retired with a pension based upon a salary of $132,000; nearly three times his salary at the time of the divorce.

In light of the above, the husband filed his motion to terminate alimony in August 2012. The record before the judge in 2012 showed that after plaintiff began receiving her share of defendant’s pension benefits, her annual gross income increased from $18,282 in 2009 to $40,734 in 2010, when she began receiving benefits.

Without holding an evidentiary hearing, the Court denied the husband’s motion for termination of alimony.  The husband’s appeal followed.

The Appellate Division found that the trial court erred by denying the husband’s application to terminate alimony: “Specifically, the court must discern what part of the $1,871 monthly pension benefits plaintiff has been receiving since defendant’s retirement in 2010 is attributable to defendant’s post-dissolution efforts, and thus may be considered income to plaintiff for purposes of determining alimony, outside the bar imposed in N.J.S.A. 2A:34–23(b).”

In so finding, the Court agreed with the husband’s argument that the trial court was required to address the fact that  the husband’s “pension benefits increased significantly as a result of his post-divorce efforts to continue his education and training, which led to his promotion to high school administrator [and] [t]hus…the motion judge was required to identify which portion of his pension shared by plaintiff was a joint effort of the parties during the marriage, and which part was due to defendant’s post-divorce efforts.”

As an aside, the Appellate Division heavily relied upon the case of Barr v. Barr, 418 N.J.Super. 18, 41 (App.Div.2011) – a case in which I was involved with writing the appellate brief – wherein the Court ruled: “[T]here are some extraordinary post-judgment pension increases that may be proven to be attributable to post-dissolution efforts of the employee-spouse, and not dependent on the prior joint efforts of the parties during the marriage. In such instances, these sums must be excluded from equitable distribution and the application of the coverture fraction may be insufficient to accomplish this purpose.”

The Appellate Division therefore concluded that the trial court must establish a discovery schedule, following which the trial court is to confer with counsel to determine whether there are material issues of fact in dispute warranting an evidentiary hearing.

It is also important to note that the new New Jersey alimony statute provides extensive language addressing a retirement scenario and, as a threshold matter, alimony may be modified or terminated upon the prospective or actual retirement of the payor spouse. There is now a rebuttable presumption that alimony terminates once the payor spouse reaches full retirement age (which can be set to a different date based on a showing of “good cause”).  The law then provides several factors for a court to consider in determining whether the rebuttable presumption can be overcome.  For more information about the changes to the alimony laws, you can find Robert Epstein’s blog on the issue here and the Family Law Altert by Eric Solotoff and Robert Epstein here.

Even with the new alimony laws now in effect, one of the my main takeaways from the case is that retirement should be addressed, to every extent possible, at the time of the divorce.  Spending some extra time during the divorce on these issues may ultimately avoid  protected litigation upon retirement as occured in the Krupinski’s case.

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Baer, Eliana T.Eliana T. Baer is a frequent contributor to the New Jersey Family Legal Blog and a member of the Family Law Practice Group of Fox Rothschild LLP. Eliana practices in Fox Rothschild’s Princeton, New Jersey office and focuses her state-wide practice on representing clients on issues relating to divorce, equitable distribution, support, custody, adoption, domestic violence, premarital agreements and Appellate Practice. You can reach Eliana at (609) 895-3344, or etbaer@foxrothschild.com.

Photo Copyright: zimmytws / 123RF Stock Photo

The ABC’s of Family Law- A is for “Assets”

Posted in Uncategorized

“What’s included” is a question which I hear many times each week as I meet with clients who are thinking about or embarking on the path of divorce or separation.  What assets are included in the marital estate is defined by statute in New Jersey.  Essentially, anything that was acquired by either party during the marriage by either party, regardless of whose name the asset is titled, is part of the marital estate and subject to equitable distribution.   There are, of course, exceptions to this rule, and those exceptions include assets that were acquired by way of a gift from a third party ( think 40th birthday present from your best friend, or transfer of property from your parent) – as long as it is maintained in the recipient name and not placed in  joint names with your spouse, and property that is inherited by one of the parties to the marriage.When having conversations with client, there are several questions that typically come up:

Pensions:  Pensions and other retirement accounts are included in marital assets. However, the amount is limited to the amount of money that was accumulated during the marriage ( and any growth  thereon).  For instance, if you have a 401(k) account and before the marriage you had $100,000 in the account, and during the marriage, you contribute another $50,000, it is only that $50,000 that is considered marital.

Businesses:  A closely held business that was started, or increased in value during the marriage is subject to distribution.  An example of this might be a spouse who started a tech company during the marriage.  The business will typically be valued by an expert (forensic accountant) and a portion will be awarded, or distributed to the non-business owner spouse.

Jewelry and other gifts between spouses:   Gifts from one spouse to another are included in the marital estate and will be distributed between the parties.  The one notable exception to this rule is the engagement ring.  That was a conditional gift that was given before the marriage, and once the marriage occurs, is considered a pre-marital asset.  Yes, that’s often a bitter pill to swallow!

The mountain retreat that I had before I got married:  As a general rule, this is considered a premarital asset and is exempt from distribution.  The exceptions to this can be when the  spouse whose asset it is has transferred the property into both names.  This happens sometimes during a refinance.    Also, if the non-titled spouse has made significant monetary contributions to the property during the marriage, and this has resulted in an increase in value, the non-titled spouse may have an equitable claim.

Restricted Stock and/or stock options that will not vest until after the divorce:  If the options or stock were awarded for service during the marriage, then at least a portion is marital.  What typically happens is that the distribution is not equal as there are post marital efforts that must be made in order to actually get the asset.

These are but a few issues that come up when discussing assets.  Not an exhaustive list for sure, but certainly issues to ruminate on and to discuss !

 

Jennifer Weisberg MillnerJennifer Weisberg Millner is a partner in Fox Rothschild LLP’s Family Law Practice Group. Jennifer is resident in the firm’s Princeton Office, although she practices throughout the state. Jennifer can be reached at 609-895-7612 or jmillner@foxrothschild.com.

NEW JERSEY FAMILY LAW PODCAST SERIES – CHILD SUPPORT AND EMANCIPATION

Posted in Child Support

In the return of our New Jersey Family Law Podcast Series, we are proud to present our fifth installment discussing child support and emancipation.  This has been a hot topic in recent months, especially following the Rachel Canning lawsuit from earlier this year.  Enjoy!

Listen to the Podcast and download the transcript here.

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Robert A. Epstein is a partner and Eliana T. Baer is an associate in Fox Rothschild LLP’s Family Law Practice Group. Robert practices in the firm’s Roseland, New Jersey office and can be reached at (973) 994-7526, or repstein@foxrothschild.com. Eliana practices in the firm’s Princeton, New Jersey office and can be reached at (609) 895-3344, or etbaer@foxrothschild.com.