NJ Family Legal Blog : New Jersey Divorce and Family Lawyer & Attorney : Fox Rothschild Law Firm : Domestic Violence, Prenuptial Agreements, Child Custody

For parties whose combined net after tax income is less than approximately $185,000, there are  Child Support Guidelines that control what the support should be.  Generally, people cannot agree to pay less child support than is mandated and, in fact, it is well settled that a custodial parent cannot bargain away their right to child support because in theory, the support belongs to the child, not the parent.  On the other hand, if you agree to pay more child support than the Guidelines call for, you may be stuck with that deviation in perpetuity.

This fact was highlighted in the recent unreported case of Foster v.McGee.  In this case, the husband had researched the child support when the parties settled and proposed a number that he believed was in accordance with the Guidelines.  In fact, the parties' Agreement reflects that the sum was determined after considering the Guidelines.  The wife was represented by counsel in the divorce, the husband was not.  Turns out, the husband figured the support out incorrectly, and support which should have been $198 per week under the Guidelines, was agreed to at $289 per week

Because this was determined not to be "mutual mistake" and that the increased support was in the children's best interests, the husband did not get relief.

That said, the parties later had a verbal agreement to modify the support to $240 per week.  Even though the parties' agreement said that changes had to be in writing, since there was no dispute as to the modification, it too was confirmed.  From a practical perspective, it is better to get any modifications confirmed in a writing.

However, as to the original point, was a fair result achieved?  If the Agreement suggests that the Guidelines were considered, then if there was not "mutual mistake", then were there sharp dealings?  Did the wife, who was represented by counsel. know that the Guidelines called for lower support by remained silent?  Moreover, when you submit your Judgment of Divorce, a Child Support Guideline Worksheet is supposed to be attached?  One think that if this happened, the mistake would be obvious?  If not, then why not"  Also, as noted in the opinion, there are supposed to be findings made by a trial judge if there is going to be a deviation from the Guidelines.  it does not appear to have happened here. 

While extra support will almost inevitably be in a child's "best interest".  That said, one wonders whether a fair result occur ed in this case.

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It has recently come to light that the court may have been calculating child support incorrectly.  This revelation comes to light from a Mercer County case where an attorney recalculated child support using the software in his office and came up with the different result than the Court.  As a result, the attorney wrote to the Court and the Court directed the matter to the Administrative Office of the Courts (AOC) for review.  Sure enough, the attorney was correct and a corrected Order was entered. 

Since the support as calculated by the Court's child support software was about 10% too high, this has raised concern among the bar whether all support orders calculated by the Court in the recent past have been too high. 

When the new Child Support Guidelines came out about a dozen years ago, there were essentially two main software packages that calculated support and the Court had one of the two.  While they usually were close, it was not uncommon for their to be a slight deviation in the calculations.  If there was a real discrepancy, the Court would usually accept the guidelines calculated using the same software that the Court had.

Several years ago, the Court went to a web based program to calculate child support.  This program was not available to the public or attorneys.  It now appears that there could be a problem with this program. 

If this is so, who knows how long it has been going on.  Perhaps there was user error in the matter described above - but that does not seem to be the case. Further, as both the taxes considered and other aspects of the Guidelines are essentially updated yearly, perhaps there was a programing error in the most recent update.  Worse yet would be if there has been a "glitch" in the Court's program since it's inception.

In the mean time, if your child support was calculated by the Court, you may want to have the calculations checked. 

Either way, stay tuned for updates on this story.

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On April 13, 2009, the Appellate Division issued a decision in the case of Cadavid v. Nieto which dealt in large part with the issue of child support in high income cases. To view the full text of the case, click here. 

We have previously blogged on this topic.  To view links to those prior posts, click here , here, and here.

In the Cadivad matter, the father appealed an Order requiring him to pay almost $9000 per month in child support.  Both parties were  immigrants from Colombia. The father is the successful founder and president of eight schools that teach English as a second language located in New Jersey, New York, Florida, and Canada. He also owns interests in several commercial properties in New Jersey and Florida as well as 4 homes.  In a June 2007 loan application, the father valued his various business interests at $8 million and the fair market value of his real estate holdings at $5.2 million. The trial judge calculated the father's annual income for purposes of child support at approximately $2 million annually.

On the other hand, the mother was a full time homemaker but had an associates degree from Bergen County Community College.

The parties had 3 children under age 10 at the time of the proceedings.

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 A long standing problem for matrimonial attorneys has been the calculation of child support in situations in which two parents have equal physical custody of children. The Court Rules tell us that when the combined net income of the two parents is $187,200 or below, the Guidelines must be utilized as a rebuttable presumption for child support. Practice tells us that the Guidelines are rarely deviated from in this income category. 

 The Child Support Guidelines are predicated on the supposition that there are three types of expenditures that parents make for or on behalf of their children.. The first is fixed expenses (representing 38% of the child support amount) are those expenses incurred even when the child is not residing with the parent. Examples of this include housing-related expenses, such as mortgage or rent, utilities, household furnishings and household care items. The second is variable expenses (representing 37% of the child support amount). Variable expenses are incurred only when the child is with the parent. This category includes items such as transportation and food. Finally, controlled expenses (representing 25% of the child support amount) are those expenses which include items like clothing, personal care, entertainment and other miscellaneous items.

The Guidelines presume that each parent has fixed and variable expenses on behalf of the child. On the other hand, the Guidelines also presume that controlled expenses are ONLY incurred by the parent who is designated the “Parent of Primary Residence.”  However, in a true joint custody scenario, neither parent is the Parent Primary Residence and both have controlled expenses. The calculation of child support in these cases has been problematic for many years and there has been little consistency as to the child support awards in these cases. On April 13, 2009, a published trial court decision was handed down in which there is a specific formula to determine child support.

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On December 31, 2008, the Appellate Division released the opinion in the case of Cardell v. Kirby.  In this case, child support over the guidelines was limited to a nominal amount by the trial court and the Appellate Division affirmed.  To see the full opinion, click here.

In this case, the defendant-father lived in NY with his wife and two children.  As some point, he became estranged from his wife and had a relationship with the plaintiff-mother  that resulted in a child born in November 2006.  Subsequent to that time, he resumed living with his wife.  The defendant seemingly earned or had the ability to earn more than $500,000 per year.  In fact, in 2006, he earned  just under $700,000 and the plaintiff earned just under $87,000

The plaintiff filed a complaint and motion seeking, among other things, $4,000 per week. The defendant began paying support of $2,600 per month and filed a cross motion seeking to limit his support to that amount.

The judge determined that the top child support due from the defendant to the plaintiff, inclusive of his share of child care, was $632.00 per week.  Noting that he had to add some amount over that, he added $17.50 per week to pay a portion of plaintiff's loan that was required to renovate her
apartment to accommodate the parties' daughter.  The plaintiff appealed.

The Appellate Division noted the established principle that the needs of an infant are less than those of teenagers.  The Court also noted that "a balance must be struck between reasonable
needs, which reflect lifestyle opportunities, while at the same time precluding an inappropriate windfall to the child or to the custodial parent."  The Court disagreed with plaintiff's contention that the court erred by not considering the lifestyle that her daughter is entitled to, based on defendant's significant earnings.

The Court also rejected plaintiff's assertion that the court erred by failing to recognize that the amount of expenses declared in her December 2006 Case Information Statement only represented what she could then afford, "at a time when defendant was not paying support."  The Court noted that the trial judge correctly determined the child support based upon the information that it had before it at the time.

Read together, it seems as though plaintiff may have made a mistake by failing to include a CIS with not only her actual budget, but one that included a proposal of what her expenses would be if she was receiving the support that she sought.  Specifically, the quote from the reported Walton v. Visgil case, restated in the Isaacson case, probably should have been heeded.  The quote is as follows:

where as here, the children are entitled to share in a parent's good fortune, the custodial parent's budget should be broken down into two parts: the reality-based component dictated by his or her income and the added projections which will, in fact, allow the children to share in the other parent's financial gain. This could include, by way of example, private school tuition, private tutoring, summer camps, music or art lessons, sports clinics, vacations, study abroad, and the provision of transportation for a child who drives, to mention only a few possibilities. It could also include help to make the family home more presentable, assistance with the cost of a family car, or a larger amount of money for a teenager's clothing and incidentals. As we have said, these are only examples. What is important is that sufficient thought, effort and information is put into the two-part budget to give the trial judge a basis on which to act under Dunne and Zazzo.

Of course, in a case of a 9 months old, it is probably hard to come up with these types of extras.

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Previously, I blogged about the trial in the McGreevey divorce.  In that entry, I wondered whether it was the desire for retribution that was driving the case and whether the legal and expert fees exceeded the matters at issue.  To see my prior post, click here.

The decision of the Court was released yesterday and unfortunately I was right.  As for the one party playing the victim throughout and until the end, that was evidenced by Ms. Matos McGreevey's statement released even before the decision was released. 

As to the decision, it was decidedly in favor of Mr. McGreevey on the major issues raised by his wife.  Whether the issues raised were ever real and bona fide issues, that is another story.  In any event, the trial judge was clearly frustrated with the parties and it showed in her decision.  To read the decision click here.

Some of the highlights of the decision and Judgment of Divorce are as follows:

-There is no obligation to pay alimony.  In fact, the Judge found that to the extent that there was a need for alimony, it was caused by the legal fee debt associated with the case.

-Mr. McGreevey's income for support purposes was $175,000 - approximately $25,000 more than his employability expert opined and significantly more than he claimed he could earn as a seminary student. Child support was based upon that income and his wife's former income (she was laid off just prior to the end of the trial.) The Child Support Guidelines were used and then enhanced slightly due in large part to the fact that Mr. McGreevey was being supported by his partner.  He did not get a credit for the support for his other child because he was not currently paying it.

-The wife's claim for celebrity goodwill did not fly nor did her claim that marital lifestyle should be fixed based upon the lifestyle provided by the State of New Jersey to the Governor and First Lady.

-Each side had to pay their own legal fees. 

-The wife's fees total fees were more than $525,000   after receiving a courtesy discount of approximately $125,000.  Only $50,500 had been paid to date.  Mr. McGreevey's fees totaled $498,000 and he had paid only approximately $170,000. 

Given the costs and the results, could it have possibly been all worth it?  Based upon the Court's decision, it seems unlikely.  That is, unless there was a desire to drag the other through the mud and exact vengeance in a public arena.  If that was the victory sought and received by either or both of the parties, then the system failed.

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One of my pet peeves is litigants and lawyers that use custody and parenting time issues as a bargaining chip to get better a better financial settlement.  I have several matters ongoing now where that is occurring.

In a recent case, both in negotiations between the parties directly, and in negotiations with opposing counsel, we were told that the proposed resolution of a hotly contested parenting time issue for far less than had been demanded was fine but only as part of a global settlement including the finances.  Put another way, they were only going to resolve visitation if my client made financial concessions.  The bad faith of the tactic was evident.

In fact,  in New Jersey, there is really little interplay between the parenting time and the finances other than some child support adjustments made for the number of overnight visits.  This does not even really come into play in high income cases that exceed the Child Support Guidelines.  That said, since parenting time and custody issues are based upon the best interests of the children, most would agree that you should not negotiate these issues based upon money.  However, it comes up all to frequently, often to the detriment of the children and at a great financial and emotional cost to the parties. 

The system in New Jersey is set up to try to smoke out and resolve these bogus parenting and custody issues early in the case.  At the outset of a case, the parties are required to attend a Parent Education program given by each county.  After that, the parties are required to go to mandatory custody and parenting time mediation, usually with Court staff, unless there is a domestic violence restraining order in effect.  Only then, do you get into custody and parenting evaluations with experts, etc.  Also, this is all completed at the outset of the process, long before discovery is over, and often before it is even started in earnest.

A familiar scenario of the bad faith custody dispute that I have seen a fair amount as of late is as follows:  one parent is the traditional stay at home parent - the other is the Type A executive type that leaves the home at 6 a.m. and doesn't return home until 7 p.m.  Sometimes, that person travels substantially for business as well.  The stay at home parent has been responsible for all medical and dental visits, haircuts, play dates, teacher conferences, etc. The divorce starts and the  parent that works out of the home demands either custody or a 50-50 parenting arrangement. 

In these cases, absent mental health issues or other extraneous circumstances, the demand is one that is typically made either because there are control issues or as a bargaining chip.  That is not to say that there are not times where this parent should not get custody, because there are and I have gotten custody for these types of parents. 

That said, when these issues are made for bargaining, if the matter does not settle in mediation, the next step is custody evaluations by a forensic psychologist. If the parties cannot agree on a joint expert or the Court does not appoint one expert, there can be two experts.  The children are now made part of the process and have to meet with the expert several times.  Their teachers may be contacted.  Their doctors and therapists may be contacted.  The parties' therapists may be contacted.  Other collateral sources may be contacted (neighbors, coaches, family members, etc.)  The price to pay on the family, aside from the legal and expert fees, is high - especially when the issue is for bargaining only.

Don't get me wrong.  I understand that there are good faith custody and parenting disputes that require this process.  While the toll is still the same, that may be unavoidable.  However, if the issue is not a "real" one, I would hope that people would not use it improperly as a bargaining chip.  The collateral damage may be great.

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      In high-income cases, determining the appropriate level of child support is a difficult - and critical task for the courts.  Part science, part art, most judges rely on both detailed financial disclosures adn a qualitative assessment of what is truly in the child's best interests. In the vast majority of low- and middle-income cases, judges follow the advice of the New Jersey Child Support Guidelines, which define child support based on the family’s net income. In 2006, the Guidelines were revised include more high-income situations. Many feel this formulaic approach was more hindrance than help because discretionary spending patterns can vary widely. 

       The New Jersey Supreme Court’s revised the Child Support Guidelines effective September 1, 2007 – specify only a minimum support level (with no guidance on an upper limit) for families with net incomes exceeding $187,000. Previously, the Guidelines defined both the support level for families with net incomes exceeding $229,840. When the new Guidelines are in effect, a large number of cases will no longer be subject to guidelines on the maximum level of support, which should result in awards that are more in keeping with the parties’ lifestyles.            

        Approximately 10 years ago, the New Jersey Child Support Guidelines were overhauled to include more families. Prior to those changes, only cases in which the combined net income (i.e., the net after-tax income of both parents) was under $52,000 per year fell within the Guidelines. The changes significantly raised the upper limit of the Guidelines to include families whose combined net income was as much as $150,800 per year ($2,900 per week). The Guidelines were not changed again until 2006, when the upper limit was raised to cover families up to $229,840 ($4,420 per week). The goal was to make the Guidelines more inclusive.

            However, the changes had unintended consequences. While there were some modest increases in child support awards at lower-income levels, support actually decreased at the upper levels – which prompted an immediate outcry from the Family Law Section of the New Jersey Bar Association. Others argued that strict Guideline calculations did not make sense in higher-income situations where discretionary spending patterns would not necessarily be captured in the economic data on which the Guidelines were based. 

          The Supreme Court took note and accepted the recommendation of its Family Practice Committee to set the top of the guidelines at $187,000 per year ($3,600 per week) in combined net income. The Court expects that the new limits will cover 90 percent of the state's child-support cases.

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