When settling a case, the parties and their lawyers can be far more creative in settlement then a judge can be if the case is tried. While family judges have wide discretion in their decision making, creativity is crafting the most beneficial result for both parties is rarely something they can do. In fact, in many ways, they are constrained from the type of creativity that we see every day in divorce agreements.
What if you are a high earner, but your income fluctuates greatly from year to year? While a judge will likely have no choice but to determine your average income over 3 to 5 years and base support upon that as well as the rest of the statutory factors, you may want to agree on some kind of formula so that there is fairness year over year, i.e. you pay more in a better year and less in a down year. For example, if your average income is $2,500,000 but your income fluctuates between $1 million and $4 million per year. You would really hate paying alimony in those years you only make $1 million. If a judge decided this case using averages, you might be forced to pay your entire net income, or more, to you ex spouse in the down year. Similarly, a judge could never say that support "automatically" is reduced or even reviewed if your income is less than $X in the future.
This concept was reiterated again by the Appellate Division on October 29, 2012 in an unreported (non-precedential) decision in the case of Means v. Snipes. In this case, after a trial, the judge decided that in the event that defendant’s annual income fell below $2 million, he would receive a reduction in alimony. This is the one thing that both parties agreed was in error – a rare agreement in a very contentious case.Continue Reading Another Reason To Settle – Parties Can Agree To Things that Judges Can’t Mandate – Like Automatic Reductions and Formulas for Alimony