Child Support

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Signed into law on January 19, 2016, New Jersey’s emancipation law is set to take effect on February 1, 2017 and will apply to all child support orders issued prior to or after its effective date.

37774117 - definition of word emancipation in dictionary

One of the highlights of the new law is that it will dramatically impact when and how child support orders will terminate. Specifically, it provides that unless otherwise indicated in a court order or judgment, the obligation to pay child support shall terminate without order on the date a child marries, dies or enters into military service.

Child support will also terminate automatically when a child reaches 19 years of age unless (a) another age for such termination is specified in a court order, which shall not extend beyond the date the child reaches 23 years of age; (b) a written request seeking the continuation of child support is submitted to the court by a custodial parent prior to the child reaching the age of 19; or (c) the child receiving support is in an out of home placement through the Division of child Protection and Permanency in the Department of Children and Families.

Just ahead of the effective date of the statute, Judge Jones issued an opinion on the effect of one child’s emancipation in Harrington v. Harrington. In Harrington, the parties divorced in 2012. The parties have three children, all of whom were unemancipated at the time of the divorce. As such, the parties’ settlement agreement provided that the father would pay the mother the sum of $240 per week in child support for all three children. In what would become a decisive fact in the case for Judge Jones, he noted that the child support was unallocated, rather than broken down or allocated into specific dollar amounts for each child – either on a one-third per child basis or otherwise.

Following the divorce, the father paid child support as agreed without requesting an modifications, even when their oldest child began college. In September, 2014 the parties mutually agreed to emancipate their two oldest children. Two orders were entered confirming the emancipation, but the amount of child support that the father paid remained the same. Further, neither party submitted or exchanged updated financial information or filed any motion.
In June, 2015, the last remaining unemancipated child graduated high school and decided not to proceed to college. The father continued to pay $240 per week in child support nonetheless, without any objection by either party.

In February, 2016, a year-and-a-half after the first two children were emancipated, the father filed a motion for the retroactive allocation of child support to $80 per child, and downward modification of one-third per emancipated child, effective September, 2104. He also sought to emancipate the youngest child and terminate his obligation. The mother consented to the emancipation of the youngest child, but opposed the retroactive modification that the father sought.
With regard to the issue of retroactive emancipation, the Court initially grappled with which law to apply in this situation: should it apply the anti-retroactivity statute which prohibits the retroactive modification of unallocated child support, or does the case law with regard to retroactive emancipation apply?

In reaching its decision, the Court devised a set of equitable factors that should be examined:

1) How much time has passed between the date of one child’s emancipation and the filing date of the obligor’s present motion for retroactive modification of unallocated child support for the remaining unemancipated child or children?

2) What are the specific reasons for any delay by the obligor in filing a motion to review support based upon emancipation?

3) Did the non-custodial parent continue to pay the same level of child support to the obligee, either by agreement or acquiescence, and of his or her own decision and free will, even after he/she could have filed a motion for emancipation at a prior point in time?

4) Did the custodial parent or child engage in any fraud or misrepresentation that caused the obligor’s delay in filing a motion for emancipation and support modification motion?

5) If the non-custodial parent alleges that the custodial parent failed to communicate facts that would have led to emancipation and modification of support at an earlier date, could the non-custodial parent have nonetheless otherwise easily obtained such information with a reasonable degree of parental diligence and inquiry?

6) If the obligor’s child support obligation was unallocated between multiple unemancipated children of the parties, will a proposed retroactive modification of child support over a lengthy period of time be unduly cumbersome and complicated, so as to call into question the accuracy and reliability of the process and result?

7) Did the custodial parent previously refrain from seeking to enforce or validly increase other financial obligations of the non-custodial parent, such as college contribution for any remaining unemancipated child, because during such time period, the non-custodial parent continued to maintain the same level of unallocated child support without seeking a decrease or other modification?

8) Is the non-custodial parent seeking only a credit against unpaid arrears, or rather an actual return of child support already paid to, and used by, the custodial parent toward the financial expenses of the child living in the custodial parent’s home?

9) If the non-custodial parent seeks an actual return of money previously paid to the custodial parent, what is the estimated dollar amount of child support that the non- custodial parent seeks to receive back from the custodial parent, and will such amount likely cause an inequitable financial hardship to the custodial parent who previously received such funds in good faith?

10) Are there any other factors the court deems relevant to the analysis?

In applying the above factors to the present case, the Court considered the following factors: nearly a year and a half passed between the effective date of the emancipation for the older two children and the filing of the father’s motion; there was no reason provided to explain the delay in filing; during that period, the father continued to pay the same level of child support to the mother; there was no evidence submitted that the mother or the children engaged in any type of fraud; the mother and children communicated facts that would have led to a modification of support; and, a retroactive modification of support to 2014 may be unduly complicated given the fact that no financial information was submitted for the period of time in question – 2014-2016.

The Court noted that a hearing should to be scheduled to examine these factors and weigh the comparative equities to determine whether to exercise its discretion and retroactively modify unallocated child support prior to the motion filing date, based upon a prior emancipation of one or more children. However, the Court was somber in its knowledge that this would not be an easy task – i.e. to recreate what child support *might* have looked like over a two year period of time.
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Eliana Baer, Associate, Fox Rothschild LLP Eliana T. Baer is a 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.

The Appellate Division’s newly published (precedential) decision in Avelino-Catabran v. Catabran provides another lesson to practitioners and litigants about the language used in settlement agreements and how such language, if unambiguous and without basis to modify, will likely be upheld in matrimonial matters.  The specific dispute involved college payments for the parties’ older child and child support, but the importance of this decision stems from the enforceable nature of the settlement agreement itself rather than what portion of the agreement was at issue.

Contract pic

Here are the relevant facts that you need to know:

  • The parties were married on June 18, 1993 and divorced on August 14, 2002.  A settlement agreement addressing custody and support of the children – 21 and 17 at the time of the appeal – were addressed therein.
  • The agreement provided that the parties shared joint legal and physical custody of the kids, with mom being designated as the parent of primary residence during the school year and dad during the summer.
  • The agreement also required dad to pay $137 per week in child support, and the parties seemingly agreed to increase the obligation to $800 per month in 2009.
  • As to college, the agreement provided that the parties would be equally responsible for “net college expenses – those remaining after the children applied for financial assistance.”  The agreement provided:

  • The minor children shall have an obligation to apply for any and all scholarships, student loans, grants and financial aid that may be available to help defray the cost of each child’s attendance at college.  After deductions for scholarships, student loans, grants and financial aid, the parties agree to be responsible for the net college educational costs of the minor children.  Net college cost[s] will be split equally by the parties.  (language was deleted providing that the parties respective obligations were to be determined pursuant to their respective abilities to pay at that time).

  • In June 2004, the parties agreed to change the custody and parenting time arrangement, eliminating alternating weekends with the kids living full-time with mom during the school year and with dad during the summer.
  • In May 2011, the custody and parenting time arrangement was again changed when mom and her new husband moved to Switzerland with the kids.  To facilitate the move, dad signed a letter at the time providing that mom had sole custody of the kids “[f]or the duration of, and subject to, their residing in Switzerland.”
  • After graduating from high school, the oldest child decided to attend NYU starting in Fall 2012.  Total cost of attendance was approximately $62,000, but the school offered substantial financial aid (including a large scholarship, a work study offer, and student loans), the total value of which came to approximately $23,000.  The package also included PLUS loans worth approximately $39,000, which were defined by the award letter as “the maximum amount . . . . [a] parent may borrow.”
  • The child accepted the full scholarship, work study, and student loans offered to her.  In an email sent at that time, dad asked mom, “how much Parent PLUS Loan should we borrow?” and suggested they borrow approximately $13,000 to cover mom’s share of the balance owed for college.  Mom responded by telling dad to “Please borrow this money on behalf of Catherine (the older child)”.  As a result, dad accepted the available PLUS loan.
  • In October, 2012, dad filed a motion seeking to modify child support to reflect a split-parenting arrangement, an order requiring mom to pay half of the child’s net college expenses, and judgment against mom for the amounts due on the PLUS loan and owed to NYU for the Spring 2013 semester.
  • Mom argued that no funds were owed by her for college costs because NYU provided the child enough financial aid to cover the total expense.  Financial documents submitted showed that mom’s gross income was approximately $225,000 annually and dad’s was $113,000 (they each earned $73,000 at the time of the divorce).
  • In May, 2013, the court entered an order directing mom to contribute to college expenses, but required the parties to submit their financial documents to determine what said contribution should be.  It also directed the parties to submit pay stubs and tax returns to determine child support moving forward.  In so doing, the court found that the financial aid package did not cover the full college cost, the PLUS loans were available only to mom and dad, and dad had established changed circumstances warranting a child support modification.
  • Notably, the court found that, based on the above-described emails, mom was aware of the financial aid package and that the loans dad was taking were to cover her share of the college costs.  NYU was also deemed an appropriate college choice by the child because of the “employment opportunities offered to NYU graduates” instead of another school preferred by mom.
  • Mom moved for reconsideration of the trial court’s order.  The motions were denied in January 2014.
  • During the next series of months, the parties submitted various financial disclosures to the court.  Mom claimed she could not afford to pay for college, and she had filed for Chapter 11 relief in bankruptcy court approximately six months prior.
  • In May 2014, the court ordered mom to contribute 50% of the net college expenses.  It also modified child support, directing dad to pay $186 per week for the younger child, and mom to pay $281 per week for the older child (resulting in a net payment of $95 per week to dad).  In so doing, the court found mom had sufficient resources to contribute to college, considering the requisite legal factors (the Newburgh factors) in so doing, and relied on the language of the original settlement agreement calling for an equal payment obligation.
  • As for child support, the court, in that same order, found that the children’s respective living arrangements (older child at college and younger child in Switzerland) merited a modification.  In so doing, the court relied upon the Child Support Guidelines, Rule 5:6A, and dad’s support proposal (not included in the order).  In so doing, the court also attached a Child Support Guidelines Sole Parenting Worksheet for two children in a “split-parenting situation” (for multi-child families where one parent has custody of one or more children, and the other parent has custody of the other children).  Support was modified retroactive to October 2012 when dad first filed his motion.
  • Mom appealed the relevant order.

i.     Decision on College Expenses

In affirming the trial court’s finding as to college, the Appellate Court found that the lower court properly enforced the unambiguously written original settlement agreement requiring mom to be equally responsible for the kids’ college expenses because there was insufficient evidence of unconscionability, fraud, or changed circumstances (despite mom’s bankruptcy filing) that would merit a deviation from the agreement.  The Court reiterated the obligation of divorced parents to contribute to the higher education of children who are qualified students (notably, the court referenced a general parental obligation to pay – not just for divorced parents, which has been a hot topic of discussion in recent years).

  • Notably, because the parties agreed on how to pay for college in the settlement agreement, the trial court was not required to apply all of the Newburgh factors in rendering a determination and was simply required to enforce the agreement/contract as written.
  • As to the PLUS loan, the Appellate Division disagreed with mom’s position that the loan was secured for the child because the child was not eligible to apply for or receive the loan herself.  “Therefore, the PLUS Loans cannot be considered a student loan or financial aid available to [the child] for which she had to apply, as contemplated by the parties.  The court correctly determined that [mom] authorized the loan and she was responsible for same.“

ii.     Decision on Child Support Modification

The Appellate Court affirmed the trial court’s determination (without a hearing) that the older child living at college and spending her time off with dad instead of with mom in Switzerland was a sufficient changed circumstance to merit a support modification.  There was also no dispute that the parties’ incomes had substantially changed since the divorce.  The Appellate Court, however, agreed with mom’s position that the trial court erred in calculating child support by:

  • Failing to consider the statutory child support factors as required by Jacoby v. Jacoby when a child lives away from home while attending college (at which point the Guidelines no longer apply);
  • Failing to properly calculate the support award and issue a clear statement of reasons for same; and
  • Relying on dad’s use of the Guidelines and its incorporation by reference of dad’s proposed calculation.

Primarily, the trial court failed to calculate the Guidelines-based amount and specifically provide why it was deviating from same in the best interests of the child.  “[A] court cannot simply attach a guidelines worksheet in lieu of providing a statement of reasons.”  In so holding, the Appellate Court noted, “The court’s statement regarding its abdication to [dad] of its obligation to calculate support did not satisfy its obligation to provide a statement of reasons for its decision.”

Avelino-Catabran provides a useful analysis for practitioners and litigants when it comes to drafting agreements and, in this particular instance, what will and should be included in the college expense portion of same.  Most of the agreements I have seen and drafted are largely similar on this topic and, by excluding the PLUS loans (which were not identified in the agreement) from the equation, the Court ensured that divorced parents cannot essentially abdicate their responsibility to provide for a child’s college expenses.

 

*image courtesy of freedigitalphotos.net

Ah, the moment you have been waiting for – nay, dreaming of – has arrived:  your child has gotten his or her driver’s license!  It was a long time coming, after 17 long, hard years of carpooling to school, arguing with the other parents about who is going to pick the kids up from their mall hang-out session, shuttling your child to sports practices, lessons, tutors, and so forth.  Freedom is yours!  There’s just one question:  who’s going to pay for the expenses associated with your son or daughter’s car and insurance expenses?

teenage driver graphic

When it comes to working out a fair child support arrangement, the devil is often in the details.  Child support recipients often feel that the support awarded to them under the Child Support Guidelines – the formula used in this state to calculate appropriate child support awards in most cases – isn’t enough.  After all, kids cost a lot of money.  Plus, their needs are constantly changing.  A child support award entered when the child is 3 years old may not be adequate when that child turns 13.  For parents of teenagers, one life change that often creates a dispute about the adequacy of the child support award occurs when the child begins driving and, at the very least, increases auto insurance costs.

For years, family law attorneys and our clients have grappled with the issue of whether the cost of a child’s car insurance as a new teenage driver was intended to be covered by a Child Support Guidelines-based award or, alternatively, it should be treated as an “add-on” expense to be shared by the parties over and above the child support payment.  And, as Judge Jones points out in his latest thoughtful opinion, Fichter v. Fichter, it has been unclear as to whether the Court may use its discretion to increase the child support contribution in order to address the costs of having a new teenage driver of divorced or unmarried parents.

In 2013, The New Jersey Child Support Guidelines were amended and gave us some answers to these questions.  As amended, child support is to include:

Transportation – All costs involved with owning or leasing an automobile including monthly installments toward principal cost, finance charges (interest), lease payments, gas and motor oil, insurance, maintenance and repairs. Also, included are other costs related to transportation such as public transit, parking fees, license and registration fees, towing, tolls, and automobile service clubs. The net outlay (purchase price minus the trade-in value) for a vehicle purchase is not included. Transportation also does not include expenses associated with a motor vehicle purchased or leased for the intended primary use of a child subject to the support order.

So, the 2013 amendments told us that if a child is going to drive his/her own car, the expenses associated with buying that car, and all other expenses associated with that car – which presumably includes insurance costs – are more appropriately considered “add-ons” to child support and not part of the child support expense.  By contrast, the 2013 amendments tell us that if a child is driving his/her parents’ car, child support will include all costs associated with that car.  And that makes sense:  if no new car is being purchased for the child, the actual expenses incurred by the parent who owns that car are going to remain the same.

Well, except for the auto insurance.  New teenage drivers can increase the cost of auto insurance for an existing car exponentially – they are one of the most expensive classes of drivers to insure due to their inexperience.  To say that an existing child support award covers the cost of adding a newly licensed teenage driver to the auto policy for an existing family car – while the cost of insurance for a new car primarily for that child’s use is NOT included – seriously prejudices those families who can’t afford to, or don’t want to, buy a new car just for their child to use.  Judge Jones’ new decision recognizes that inequity and allows the Court to deviate from the Child Support Guidelines and craft a child support award that takes into account the new expense of adding a teenage driver to an existing auto insurance policy:

The Court finds that, based upon the totality of a family’s economic circumstances, a court may in its discretion find good cause to deviate from the guidelines and require each parent to contribute additional reasonable and affordable monies towards a newly licensed teenage driver’s car insurance.  Good cause may logically include, but not necessarily be limited to, the special nature and importance of car insurance and the need to adequately protect a child as a newly licensed driver.

And that seems fair.  Shouldn’t both parents contribute to the increase of the cost in insurance if they agree they will not purchase a new car intended primarily for their child’s use?  Of course, like most other things in family law, Judge Jones’ decision is fact-sensitive and not a brightline rule.  Although the decision opens the door for a Court to decide to adjust child support to take into account the cost of insuring a newly licensed teenage driver on an existing family vehicle, good cause to do so must still be shown.

headshot_diamond_jessicaJessica C. Diamond is an associate in the firm’s Family Law Practice, resident in the Morristown, NJ, office. You can reach Jessica at (973) 994.7517 or jdiamond@foxrothschild.com.

On Tuesday, January 19th, Governor Christie took a break from his busy presidential campaign to sign several new pieces of pending legislation, one of which was New Jersey’s pending emancipation statute that impacts upon child support and when/how it terminates.  The new law, which takes effect 180 days after its signing, is applicable to all child support orders issued prior to, or, or after its effective date.  Much of it codifies existing case law, but alters, in part, the prior rebuttable presumption that child support terminates when a child reaches age 18.  The language specifics and nuances will most certainly in a manner similar to the amended alimony law, future litigation over what such language means and how it should be applied.

bill becomes law

With that said, let’s take a look at the important components of the new emancipation law and what it means:

Termination of Child Support

The law provides that, unless otherwise indicated in a court order or judgment, the obligation to pay child support shall terminate without order on the date a child – who is less than 19 years of age – marries, dies or enters into military service.

Child support shall also terminate when a child reaches 19 years of age unless:

  1.  another age for such termination is specified in a court order;
  2. the parties consent and the court approves the continuation of support until after a predetermined date; or
  3. child support is extended by the court based on an application filed by a parent or the child prior to reaching age 19.

A parent or child may also seek the continuation of child support beyond 19 years of age under the following circumstances:

  1.  the child is still enrolled in high school or other secondary program;
  2. the child is participating full-time in a post-secondary education program;
  3. the child has a physical or mental disability that existed prior to the child reaching the age of 19 and requires continued child support; or
  4. other exceptional circumstances as may be approved by the court.

Interestingly, if a court orders the continuation of child support, it must also provide in the order “a future date upon which the child support obligation will terminate or a date upon which the court will review the circumstances of the parties and children.”

Matters involving child support obligations supervised by the Probation Division will require Probation (and the State IV-D agency) to provide both parents with at least one notice of proposed termination and instructions on how to seek a continuation of child support.  Such notice is to be provided no less than 90 days prior to the termination of support under the new law.

Unallocated Child Support for Two or More Children

The new law codifies that if there exists an unallocated (not specifying the amount for each child) child support order for two or more children and the obligation to pay for one child terminates, the existing support obligation shall continue until modified by court order.  Of course, this is no way prevents the parties from coming to a resolution of the issue to avoid the time and expense associated with litigation.

If the support for such children was allocated – rather than unallocated – and support for one terminates, the amount of child support for the remaining children shall be adjusted to reflect only the amount allotted for the remaining child/children.

Arrears Existing at Termination

If support arrears exist when support terminates under the new statute, such arrears will remain due and enforceable.  The new law provides how payment for such arrears will be made, as the “sum of the recurring child support obligation in effect immediately prior to the effective date of termination plus any arrears repayment obligation in effect immediately prior to the effective date of termination” unless otherwise ordered.

Impact on Foreign Support Orders

The new statute shall not apply to child support provisions contained in orders/judgments entered by a foreign jurisdiction and registered in New Jersey for modification or enforcement under the Uniform Interstate Family Support Act (“UIFSA”), or a law substantially similar to New Jersey’s prior Uniform Reciprocal Enforcement of Support Act (“URESA”).

Impact on Support While Child in College/Post-Secondary Educational Institution

The law unambiguously provides that it does not require or relieve a parent from paying “support or other costs while a child is enrolled full-time in a post-secondary education program.”

Important Miscellaneous Points

Any party may also still seek to terminate child support for any reason other than that provided in the new law.  Also, the law confirms that it does not “prohibit the parties from consenting to a specific termination date subject to the approval of the court.”  Prior language that did not make its way into the final law focused on utilizing “capped” age of 23 to terminate support, which is often found in settlement agreements as a sort of “catch all” provision as to when child support will end.  I have had adversaries argue to me – when, of course, it suits their client’s position – that using the age of 23 as a cap to end child support is unenforceable as against public policy.  The new law confirms, however, that such a cap could be enforceable, and that it – like any other agreed upon language regarding a support termination date – is subject to the court’s approval.   Hopefully that will limit litigation that can occur surrounding such provisions in a settlement agreement.  To that end, practitioners should also consider incorporating references to the new law in the emancipation portions of their settlement agreements.

 

*Photo courtesy of Google free images.

As a lover of all things Coldplay, I was sad to hear that lead singer Chris Martin and his wife of more than 10 years, Gwyneth Paltrow, were divorcing. Gwyneth Paltrow announced the separation on her website Goop.com and used the term “conscious uncoupling” to describe their approach to divorce.  Although the term had been originally coined by marriage and family therapist, Katherine Woodward Thomas, as with anything else endorsed by celebrities, the phrase went viral after her post.  It was of particular interest to me personally given my chosen profession as a divorce lawyer.

As professionals, especially ones whose practice is client-centric, we are always striving for better ways to do our jobs.  In my case, that means getting clients their desired result in the most effective and streamlined way possible. After practicing for several years, experience has shown me time and time again, that people going through divorce are most satisfied with the process when they feel they have control over it (i.e., are “conscious[ly] uncoupling”) and can proceed with a form of alternative dispute resolution (such as mediation) rather than traditional, costly, protracted litigation.

Even as American culture has become more progressive and accepting, divorce is still considered taboo and is almost always surrounded by extreme negativity and hostility.  Even if the couple themselves wants to proceed amicably, they are unfortunately often allowing others in their life (parents, siblings, friends, new boyfriend or girlfriend) to control the dialogue and encourage them to dig in their heels.

Once people “dig in”, it is often impossible to “dig out”.  Protracted litigation only intensifies negativity and hostility. The idea that divorce has to be a negative experience then becomes a self-fulfilling prophecy, in which divorcing parties behavior, is influenced by their expectation that divorce must be awful.  I believe if you change the conversation surrounding divorce and allow yourself to “consciously uncouple” you will have much more satisfying experience surrounding your divorce.

I recently completed a 40-hour divorce mediation training program. This program has only solidified my beliefs that in many cases, a mediated divorce, is a better divorce. That is not to say that litigation is never necessary. There are some circumstances that cannot be mediated and some people that simply cannot effectively participate in mediation. That said though, divorce is multi-dimensional: it is legal, it is financial, and it is emotional. The great thing about mediation is that it can effectively address each of those dimensions.

(1) LEGALLY

Whether you litigate or mediate, you achieve the same end result: a legal divorce.  A mediated divorce however is often faster, less adversarial and provides more flexible and creative resolutions, narrowly tailored to your specific family dynamic.  It also allows for a more confidential process than airing out your dirty laundry in a series of public court filings and appearances.

(2) FINANCIALLY

I will never say “always” or “never” because I’ve come to learn that nothing is absolute.  A mediated divorce however, can certainly be more cost effective. Spending less to uncouple leaves more to be divided between the parties and therefore places both parties in a better position to maintain financial independence and stability post-divorce.

(3) EMOTIONALLY

Although emotions can run high during mediation, there is a much more focused approach on compromise and collaboration rather than “winning” as is seen in litigation. When people feel their spouse is negotiating in good faith and trying to be part of the solution, rather than part of the problem (i.e., zealously litigating over the smallest of disputes), they walk away feeling better about uncoupling, which leads to healthier relationships with themselves, their ex-spouse, and future romantic partners.

The takeaway from all of this is that choosing to uncouple, does not always have to be adversarial, financially draining and emotionally damaging. Take control of your divorce and find avenues in which to minimize the long-term effects.  Before deciding to wage war against your spouse, consult with an experienced and trained family law mediator to see how mediation can work for you.

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Lauren K. Beaver is a contributor to the New Jersey Family Law Blog and an attorney in Fox Rothschild LLP’s Family Law Practice Group. Lauren practices out of the firm’s Princeton, New Jersey office representing clients on issues relating to divorce, support, equitable distribution, custody, and parenting time.  Lauren also offers mediation services to those looking to procure a more amicable divorce. Lauren can be reached at (609) 844-3027 or lbeaver@foxrothschild.com.

Last week, the prolific Judge Lawrence R. Jones, J.S.C. shed some much-needed light on an essential question; namely: can the court retroactively set an obligor’s child support obligation to a date earlier than the filing date of an actual motion to establish child support in the reported case of Kakstys v. Stevens?  According to Judge Jones, the answer is yes.  More specifically, the answer is yes – at least as far back as the filing date of the complaint for divorce, where the complaint asserts a claim for child support.

In his carefully reasoned decision, Judge Jones drew an important distinction between modifications of existing child support orders as compared to the initial establishment of a child support order.  At first blush, the experienced attorney might react to the suggestion of applying a child support order retroactively by insisting that the “anti-retroactivity” statute, N.J.S.A. 2A:17-56.23a, prohibits modifications of child support retroactive to a date earlier than the filing date of the motion seeking to modify the support award.  And that attorney would be right, if the issue was whether an existing child support obligation should be modified.  Judge Jones’s recent decision applies not to modifications of child support, but in the limited context of establishing the initial child support obligation.

Just How Far Back Can Child Support Go?

For Judge Jones, the critical question as to how far we can retroactively establish child support seems to hinge on the concept of fair notice.  Specifically, the Court found that a properly filed and served Complaint that asserts a claim for child support is clearly sufficient notice to the obligor; however, the Court declined to make this a hard-and-fast rule:

[T]he Court holds that when a party files a divorce complaint that includes a specific claim for child support, the court may ultimately set a child support order retroactive to the filing date, whether or not the applicant has also filed a follow-up pendente lite motion at some date thereafter and irrespective of the date or disposition or any such interim pendente lite motion.  Ultimately, the issue of whether to retroactively set child support to the complaint filing date, or to a motion filing date thereafter, is subject to the discretion of the court, based upon the factual circumstances and comparative equities presented.

As with most things in family law, the discretion of the court and a balancing of the equities are paramount.  And this makes sense.  If the parties lived together, say, for three months after the complaint was filed and paid for the child’s expenses from their shared resources as they always had done, then why should a formal child support order be in effect for those three months?

But the decision arguably opens the door for setting child support effective to an even earlier date.  Here’s a scenario:  The parties have been separated for a year before the complaint was filed.  The mother is the custodial parent, and six months into their separation (i.e. six months prior to the complaint being filed), her attorney sends a letter to the father’s attorney formally notifying him of a claim for child support.  Although not formal notice by way of complaint, this would seem to achieve the goals of adequate and fair notice of a claim for child support that the Court deems critical for establishing an effective date for child support.

Another question that the Court seems to leave open is whether or not child support can, under its holding, be applied retroactively to the filing date of the complaint, or the date of service of the complaint.  Although the Court did not reach an answer to this question, it suggested that the date of service would be the date on which the obligor was actually given adequate notice.  All the more reason to timely serve a filed complaint upon your adversary.

 What about Alimony?

One important question that is raised by the Court’s recent decision is how this may effect alimony.  If notice of a claim for child support serves as the fair and equitable effective date for child support, then couldn’t one argue the same for alimony?  The Court in Kakstys seems to leave the door open for this argument by noting that “New Jersey law makes clear that when parties divorce, certain financial issues . . . are determined by the filing date of the complaint, not by the filing date of any subsequent interim application.”  The Court continues, “If, at a final hearing, these financial claims may be determined and adjudicated retroactive to the filing date of the complaint, logic and reason support the concept that a child support claim, initially set forth in a divorce complaint, may be equitably preserved for trial as well.”

If child support, as a financial issue, can be established as far back as the filing date – or whatever date adequate and fair notice is given – then by this logic, why can’t the same be true for alimony?  Only time will tell, but Judge Jones’s decision seems like a good jumping off point to make this argument under the appropriate facts.

headshot_diamond_jessicaJessica C. Diamond is an associate in the firm’s Family Law Practice, resident in the Morristown, NJ, office. You can reach Jessica at (973) 994.7517 or jdiamond@foxrothschild.com

Your lawyer has just told you what you are likely to receive for child support and your jaw has dropped because you know the amount comes nowhere near the actual cost of supporting the children. How then, do you get your soon-to-be ex-spouse to pay what you consider to be a fair amount for the children?

In a recent unreported decision, the court ordered an enhanced amount of child support ($50,000) but was then reversed on appeal because the judge failed to conduct an analysis and explain why he deviated from the formula which is used to calculate support for children.

Copyright: boykung / 123RF Stock Photo
Copyright: boykung / 123RF Stock Photo

In the vast majority of cases, child support is determined through the use of a formula known as the New Jersey Child Support Guidelines, which are found in Appendix IX-A of the Court Rules. This formula is a rebuttable presumption in both establishing and modifying all child support orders. Under the court rules, the Guidelines have to be applied in all matters whether contested or not. The court rules contain 53 pages of really small print explaining how they work. But generally, the idea is that each parent is responsible for a portion of the cost of raising children and the amount it costs to raise children is based on statistical averages throughout the state, depending on the parents’ combined income.

For cases in which the parents’ combined income is over the poverty line, and below $187,200 net, the guidelines apply, and the appropriate child support amount is applied to the case.  If the combined income is over that amount, then the Guidelines are applied, and an additional amount is added. The amount that is added is based on the remaining family income and the following factors:

(1) Needs of the child;

(2) Standard of living and economic circumstances of each parent;

(3) All sources of income and assets of each parent;

(4) Earning ability of each parent, including educational background, training, employment skills, work experience, custodial responsibility for children including the cost of providing child care and the length of time and cost of each parent to obtain training or experience for appropriate employment;

(5) Need and capacity of the child for education, including higher education;

(6) Age and health of the child and each parent;

(7) Income, assets and earning ability of the child;

(8) Responsibility of the parents for the court-ordered support of others;

(9) Reasonable debts and liabilities of each child and parent; and

(10) Any other factors the court may deem relevant.

When a parent believes that the number under the Guidelines is inappropriate (even when income does not exceed $187,200), the court has discretion to deviate from that amount if circumstances exist such that the guidelines amount is unfair.  The court can take the following factors into consideration when deviating from the Guidelines:

(1) equitable distribution of property;

(2) income taxes;

(3) fixed direct payments (e.g. mortgage payments);

(4) unreimbursed medical/dental expenses for either parent;

(5) tuition for children (i.e. for private, parochial, or trade schools, or other secondary schools, or postsecondary education);

(6) educational expenses for either parent to improve earning capacity;

(7) single-family units (i.e. one household) having more than six children;

(8) cases involving voluntary placement of children in foster care;

(9) special needs of gifted or disabled children;

(10) ages of the children;

(11) hidden costs of caring for children such as reduced income, decreased career opportunities, loss of time to shop economically, or loss of saving;

(12) extraordinarily high income of a child (e.g. actors, trusts);

(13) substantiated financial obligations for elder care that existed before the filing of the support action;

(14) the tax advantages of paying for child health insurance;

(15) one obligor owing support to more than one family (e.g. multiple prior support orders);

(16) the motor vehicle purchased or leased for the intended primary use of this child subject to the support order;

(17) parties sharing equal parenting time; and

(18) overnight adjustment for multiple children with varying parenting time schedules.

This list is not exhaustive. There are several other reasons why the Guidelines can be deviated from.  The important thing is to build a case which addresses any and all reasons to deviate from the Guidelines-up or down.  When there are extenuating circumstances, it is critical to compile documents and information which substantiate the claim. While there is certainly no guarantee, the Perry case demonstrates that judges are willing to consider the issue, but have to be given the correct information.

As a matter of public policy, New Jersey Courts favor the enforcement of agreements reached between parties. Since Marital Settlement Agreements (“MSA”) are entered into consensually and voluntarily, they are often approached with a predisposition in favor of their validity and enforceability.  That notwithstanding, these agreements are enforceable only if they are fair and equitable. A bedrock principle of New Jersey divorce jurisprudence is that parties may be able to modify support provisions within their divorce agreements if they are able to show a continuing change of circumstances.

Although the ability to modify agreements based on a change of circumstances is essentially the default so to speak, parties are free to contract around same. Often times in exchange for additional financial considerations, such as unequal asset division or a “discount” on alimony, parties will agree that the amount of years alimony is paid and/or the actual amount of alimony paid each year is non-modifiable regardless of a change of circumstances, foreseeable or otherwise.

Unfortunately all too often parties are entering into agreements that are “non-modifiable” without really thinking through the consequences of same in an effort to “get the deal done” only to have it come back to haunt them.  This is exactly what happened to Mr. Fiorenza in the recent unpublished (non-precedential) case of Fiorenza v. Fiorenza.

In Fiorenza, the parties were married for 24 years and had three children. At the time of their divorce, they were able to come to a resolution regarding the Husband’s alimony and child support payments and agreed that Husband would pay $100,000 per year in alimony ($8,333/per month) and $833.00 per month in child support. Shortly after the divorce however, Husband stopped paying support and Wife filed an application to enforce the support provisions of the parties’ divorce agreement.

The parties were able to resolve their differences and entered into a Consent Order, which lowered Husband’s total support obligation to $5,000 per month ($833.00 of which would be considered child support), included an escalation clause that support would go up if his income did and vacated $10,000 in support arrears.  The parties also agreed however that the new support amount would be non-modifiable and included that if there was a default on this new payment structure, that the total support amount would revert back the original amount under the parties initial MSA. Specifically, the parties agreed:

“No matter defendant’s annual gross income, at no time shall monthly support be lower than $5,000, except after the emancipation of [the parties’ youngest child] when the child support component may be reduced”.

After the entry of the Consent Order, Husband made the new support payments for a period of one year but then again stop paying altogether.  Wife immediately filed an application to enforce the terms of the Consent Order and asked that the initial amount of support be reinstated.  In response, Husband cross-moved for a reduction in alimony.

Both the trial Court and Appellate Court upheld the parties’ agreement and increased the support payment back to the original amount in the parties’ MSA (due to Husband’s default on the new support payments) noting that each party got the “expected benefit and burden of the contract”. Because of Husband’s current inability to pay the full support amount however, the Court set a reduced alimony and child support figure of $2,500 per month and allowed the difference between the MSA support award of $8,333 and the $2,500 to accrue as arrears.

The take away from this case is that you should think long and hard before you include any non-modifiable provision in your divorce agreements and consult with an experienced attorney to discuss the ramifications of same. Although you might feel you are getting a tangible benefit in the present by agreeing to a non-modifiable provision, it is important to think through all the circumstances that may occur in the future that would complicate your ability to comply with same (such as loss of income/employment) as you cannot expect a Court to simply invalidate the terms of your settlement agreement because you now view them as unfair with the benefit of hindsight.

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Lauren Koster Beaver is a contributor to the New Jersey Family Legal Blog and a member of the Family Law Practice Group of Fox Rothschild LLP. Lauren 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, premarital agreements and Appellate Practice. You can reach Lauren at (609) 844-3027, or lbeaver@foxrothschild.com.

If your former spouse is receiving Social Security Disability (SSD) benefits and is the payor of child support, it is important to know that your child is also eligible for certain benefits – known as SSD Dependency Benefits – and that they will have an effect on how much your former spouse must pay directly to you for child support.

Generally speaking, SSD benefits are meant to substitute for the lost earning power of a disabled worker.  Put another way, the SSD benefits are intended to help compensate you for the pay you’re losing due to your disability and, therefore, your inability to work.  If you are unable to work, and you have children, it stands to reason that you will need help supporting those children while you’re on disability.  This is the purpose of the SSD Dependency benefits.  While SSD payments belong to the disabled worker, SSD Dependency benefits belong to the child and are intended to help meet the child’s current needs.

In general, if the disabled worker is the parent paying child support, courts will credit SSD Dependency benefit payments against that parent’s child support obligation as long as the credit is being made against child support incurred contemporaneous with the benefit payment and if arrears exist.  For example, let’s say the parent’s child support obligation for the period between April 2012 and August 2015 totaled $30,000, and the parent had only been able to pay $15,000 due to being out of work.  If the child received a dependency benefit check for that same period in the amount of $20,000, then courts will allow for $15,000 of that $20,000 benefit to be applied to the arrears.

But what about the remaining $5,000?  Absent a showing by the parent receiving child support that it would be unfair to apply that $5,000 to future child support payments, courts can order that the balance of a dependency benefit that has not been applied towards arrears can, instead, be applied prospectively to the future child support payments.

And this makes sense.  Your child should not be penalized because one of his or her parents is on disability, but at the same time, the dependency benefit is not intended as a windfall but rather as a way for the disabled child support payor to keep up with his or her child support obligation.

headshot_diamond_jessicaJessica C. Diamond is an associate in the firm’s Family Law Practice, resident in the Morristown, NJ, office. You can reach Jessica at (973) 994.7517 or jdiamond@foxrothschild.com.

Many divorce or support proceedings involve the issue of who is going to pay for extracurricular activities.  Who is paying for sports?  Band?  Social clubs?  Art?  Drama and more?

skating pic

While settlement agreements commonly have a separate payment allocation for such expenses from the basic child support obligation – commonly in proportion to the parties’ respective incomes, the New Jersey Child Support Guidelines actually include predictable and recurring activities and lessons the category of “entertainment” in the basic child support obligation.

Entertainment” includes:  Fees, memberships and admissions to sports, recreational, or social events, lessons or instructions, movie rentals, televisions, mobile devices, sound equipment, pets, hobbies, toys, playground equipment, photographic equipment, film processing, video games, and recreational, exercise or sports equipment.

Expenses that are not “predictable and recurring” should not be included in the basic obligation but, rather, should be shared by the parents in proportion to their respective incomes.  As can be read from the definition of “Entertainment”, it would seem that most extracurricular activities would fall into the realm of predictable and recurring.  Since application of the Child Support Guidelines is presumed, a court must explain why any deviation therefrom is appropriate.

In Elrom v. Elrom, a newly published (precedential) decision from the Appellate Division, the appellate court found that the trial court failed to explain why it deviated from the Guidelines by adding extracurricular activity costs as supplemental support.  There was no indication by the trial court – in requiring the parties to equally divide the payment for extracurricular activities beyond the basic support obligation – as to why such activities were to be separately paid for from the basic support obligation.  Put another way, there was no indication by the court as to why the activities at issue were somehow deemed other than predictable and recurring.  As a result, the Appellate Division ordered a limited remand to the trial court.

Thus, whether you are negotiating or litigating the issue of extracurricular activity payments, be sure to consider whether such activities are predictable and recurring and, thus, should be included in the basic support obligation, or whether such payments should be made separately therefrom.

 

*photo by Bojans Cho Joo Young courtesy of freedigitalphotos.net