Archives: Montclair Divorce Attorneys

As noted yesterday, the long awaited decision in the Gnall case was released today.  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.  This case exploded onto the scene because it seemed to create a bright line that 15 years of marriage merited permanent alimony.

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However,  this case was decided before the new alimony reform statute had passed.  As I noted on this blog previously, there was a thought that the amendments to the alimony statute might render this much ado about nothing.  At the end of the day, it was much ado about nothing, but not because of the new statute, which was given very short shrift in the opinion.

Rather, the Justices, in a unanimous opinion, reiterated that all of the factors in the alimony statute must be considered, and no one factor can be elevated in importance.  One might say, “tell us something we don’t know.”

What was fascinating is the Supreme Court seemed to take both the trial court and the Appellate Division to task for focusing on one factor – duration of the marriage – to the exclusion of the others.  The Supreme Court noted:

… We find that the trial court did not consider and weigh all of the necessary factors required by N.J.S.A. 2A:34-23 in determining that permanent alimony was unwarranted but, instead, based its decision solely on N.J.S.A. 2A:34-23(b)(2). We further conclude that in reversing the Appellate Division inadvertently created a bright-line rule requiring an award of permanent alimony.

The Court went on to note that:

While the trial court identified the marriage as “not short-term,” it ultimately concluded that consideration of an award of permanent alimony was obviated by the parties’ relatively young ages and the fact that they were not married for twenty-five or thirty-years. The trial court therefore, in effect, determined that permanent alimony awards are reserved solely for long-term marriages of twenty-five years or more, excluding consideration of the other factors. No per se rule exists indicating that permanent alimony is unwarranted unless the twenty-fifth year anniversary has been reached. Therefore, we find that the trial court improperly weighed duration over the other statutorily defined factors in determining a long-term marriage must be twenty-five years or more.

We further conclude that in its disposition of this appeal the Appellate Division inadvertently created a bright-line rule for distinguishing between a short-term and long-term marriage as it pertains to an award of permanent alimony. Although the Appellate Division stated “we do not intend to draw specific lines delineating ‘short-term’ and ‘long-term’ marriages in an effort to define those cases warranting only limited duration rather than permanent alimony,” a fair reading of the opinion may lead to such a conclusion. By not clarifying that the statement reflected only the fifteen-year marriage in this particular case, the Appellate Division made a generally applicable declaration.

The Court further noted that in using the language that was used by the Appellate Division, consideration of the other alimony factors was functionally eliminated.  The Court held:

Moreover, we note that the final clause of the sentence affirms that the “not short-term” nature of a fifteen-year marriage mandates that it cannot be considered for limited duration alimony. Such a holding removes the other twelve factors from consideration for alimony awards once a marriage reaches the fifteen-year mark. Our cases have consistently held that all thirteen factors must be considered and given due weight, and the duration of marriage is only one factor to be considered. (Emphasis added).

There you have it – courts have to consider all of the factors.  Put another way, there can be long term marriages where permanent alimony was not appropriate when all of the other factors were considered, and short term marriages that may have required permanent alimony, all other things considered.

As noted above, the new statute was barely mentioned.  Essentially, the new statute was dismissed in a footnote which said:

N.J.S.A. 2A:34-23(c) was amended on September 10, 2014 to specify that “[f]or any marriage or civil union less than 20 years in duration, the total duration of alimony shall not, except in exceptional circumstances, exceed the length of the marriage or civil union. . . .” The amendment is not applicable to this case.

Clearly, on the remand, that means that the court will have to decide alimony based upon the old statute.  Query, however, what this means to cases settled or decided before the Amendment which have to go back to court for some reasons.  I suppose that some may use the footnote to argue that the old law should apply if it helps their client’s case.

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).  Even though the end result was somewhat anticlimactic, being involved in the process was still rewarding.

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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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For the last few years, at the end of the year, I have reprised a very popular post that I did in the early days of this blog about the New Year’s Resolution Divorce.  We sometimes joke that the early part of the year is “the busy season.”  In fact, earlier this year, Robert Epstein blogged that March was found to be the peak time for divorce filings.

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In our experience, the end of the summer/early fall is the second busy season (I’m sure that the nearness in time to the Jewish New Year is purely coincidental.)  These are some of the reasons that we think or have heard this occurs:

  • We got through the summer which should be a happy time for the kids, and if we file now, there is a chance to be done by next summer.  As such, if kids have to move or change schools, it is not during the school year.
  • The long awaited summer vacation was miserable -not because of the location or accomodations – but because of the company.  As such, tensions are exacerbated instead of relieved.
  • Like New Year’s Resolutions, the end of the summer represents the beginning of the school year, the new football season, the new TV season (at least in the old days), back to school sales, etc.  I am reasonably sure that the same reason that people seek the fresh start at New Years is also true here.
  • If the marriage is shaky, spending so much time together could make it worse, as the reasons that it is shaky hit you in the face over and over during this time.
  • One spouse wont help out with the children on family vacations.  This reminds the other spouse that he/she doesn’t help out during the rest of the year either.  If he doesn’t even want to be with the kids on vacation, why are we staying together?

I am sure that there are may more reasons for this phenomena.  Whatever the reason, we await those who see the fall as a chance for happiness or a fresh start – or at the very least, for a chance to make next summer happy.

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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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You’re wealthy and entitled to a big settlement but does that mean that it will be easy to get your share of equitable distribution?  When all of the assets are valued, you are worth $2,000,000, $10,000,000, $25,000,000, $9 billion.  In many cases. the issue is less about the amount of the award of equitable distribution but how to pay it out.  That issue is in the spotlight today with the story reported in today’s New York Daily News that Russian billionaire Dmitry Rybolovlev allegedly reneged on a deal to settle his divorce case for a relatively modest $1 billion, and then was hit with a record $4.8 billion divorce judgment.  It is reported that despite a net worth approaching $9 billion, he claimed that he was unable to come up with the cash to satisfy the settlement (though both accuse the other of reneging).

Treasure Chest With Coins Stock Photo Photo courtesy of freedigitalphotos.net

In many cases, it matters less about how much you have, but how liquid your are or are able to become.  In the last few years, I had a case that settled reasonably quickly and easily because most of the nearly $60 million net worth was in liquid assets (cash and securities.)  In that case, it was easy to transfer some homes, cash and securities and call it a day.

Most high net worth cases are not that easy, especially where there are business interests and/or commercial real estate.  The business may be profitable and it may be worth a lot of money, but it is not likely to be sold any time soon.  Sometimes the business owns the real estate (in the marital pot and most often valued separately) where it is located making the claim for the share of the business and the property even harder to pay out without disrupting the business.

The business throws off an income stream, but the non-titled spouse is often seeking alimony from that income stream.  If the business or property has to be sold to satisfy the equitable distribution, is it still fair to award alimony.  Not to mention, this could have very real tax ramifications perhaps not contemplated which could make the deal unfair.  Borrowing to pay the settlement out up front is often easier said than done, and moreover, you don’t want the borrowing to impair the business’ ability to continue to operate.

For better or for worse, in these types of cases, the equitable distribution may have to be paid out over time.  What a reasonable amount of time is depends on the facts of the case.  The next fights are (1) should there be interests and if so, how much, and (2) how to provide security for the obligation.  This can get very complicated, often requiring consultation with corporate, tax, real estate and/or trust and estates counsel.

What happens when you can’t resolve it and try the case?  Hopefully the judge will consider all of these things.  That said, I can point to at least two cases that I handled some appellate work on where that was not the case.

In one case, after a more than 20 day trial, most of which was expert testimony, where the values were widely divergent, the trial judge held that it was too complicated to decide and ordered that everything should be sold.  However, given certain unique tax issues related to the assets, the result could have been catastrophic because assets valued between $20 and $40 million would have been rendered valueless or worse, when the tax bill came.  Neither party wanted that and the case was ultimately settled.

In another high profile case, with a valuable business, and valuable real estate used by the business for its operations, the trial judge issued an award of more than $30 million and simply reduced it to judgment.  The trial judge did not order or even suggest how it be paid, even though everyone seemed to want direction, and simply left the parties to their own devices.  That was untenable too and the case was ultimately settled.

The take away is that just because there is great wealth, and just because you agree how much the non-titled spouse is entitled to receive, the hard part may be figuring out how to make that happen.

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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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As Supreme Court Justice Potter Stewart said when discussing his threshhold for determining obscenity/pornography, “I know it when I see it, ” that is how I feel about emails regarding routine or what should be routine parenting issues that have been drafted not by one party, but by their lawyer.  The pretextual  blathering or legalese that says nothing screams off of the screen.  It is enough to drive you mad – not because you are anxious to gather evidence in the form of an ill mannered email – but because it shows evidence of a party’s basic inability to do the slightest thing to make their own life and the lives of their children easier (or it could show a lawyer’s need to control every aspect of their client’s divorcing life, often to both parties’ detriment – perhaps the topic of another blog post.)

Peace War Keys Stock Photo  Photo courtesy of freedigitalphotos.net.

Now there have been times that I have asked/told a client to let me review an email before they send it to assure that the tone and/or content is right.  However, this is not the norm.

That said, I have several cases now where it is obvious that the other party cannot answer the most simple email without it having been vetted and/or re-written by her lawyer.  We are not talking about monumental decisions here.  We are talking about selection of doctors, communication with teachers, changing parenting time due to weather, vacation arrangements, etc.  Why is this being done in these cases?  Because it is clear that the other party has no desire and/or ability to communicate, cooperate or co-parent with the other party.  As such, her lawyer edits or prepares her emails to make them appear passable.

That is not co-parenting nor does it evidence any true ability to co-parent.  Moroever, the divorce will end and that party wont have their lawyer their forever to co-parent.  Further, it delays a response and the abililty to co-parent in real time.  In many cases, the children suffer by the delay and/or it creates more unnecessary animus.

Almost every case resolves by way of settlement or trial with parties having joint legal custody – i.e. shared decision making.  The touchstone for joint legal custody is supposed to be the parties ability to communicate and cooperate.   One Appellate Division Decision, Nufrio v. Nufrio, put it succinctly:

…the allocation of the amount of time each parent spends with the child is not the sole basis  or determining whether the parties should share “joint legal custody” of their child.  Moreover, we conclude that the prime criteria for establishing a joint legal custodial relationship between divorced or separated parents centers on the ability of those parents to agree, communicate and cooperate in matters relating to health, safety and welfare of the child notwithstanding animosity or acrimony they may harbor towards each other.  The ability of parents to put aside their personal differences and work together for the best interests of their child is the true measure of a healthy parent-child relationship.  A judicial custody determination must foster, not hamper, such a healthy relationship.  Therefore, a parent’s amenability or inability to cooperate with the other parent pare factors to be considered in awarding joint legal custody.

Sometimes, I think that lawyers and judges forget this, as they default to joint legal custody despite a clear inability on the part of one or both parents to communicate or cooperate.  Now, don’t get me wrong.  There are times when a parent refuses to cooperate with the other parent.  That parent, even if they are the parent of primary residence, should be be permitted to create a self-fulfulling prophecy in order to get sole custody.

That said, if you cannot even respond to the most basic of emails or communications without your lawyer writing it for you, should you really have joint custody?  Like it or not, parents need to put the nonsense behind them, if even for a few minutes, to co-parent their children.  They were able to do it when they were married (in most cases) – a divorce should not prevent them from putting their children’s needs first, no matter how much they despise their former (or soon to be former) spouse.

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Eric 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.

 

We deal with a fair number of cases where a spouse’s interest in a business has to be valued for equitable distribution purposes.   While there are many objective parts of a business valuation report, reasonable (a/k/a replacement) compensation is subjective.   That is why this is one of the first things I look at when partisan experts issue widely varying values.  Even when reviewing a joint or neutral report, or when the values are reasonably close, I will often go right to the reasonable compensation to see if it appears to make sense.

Dollar Bill On Dartboard  Stock PhotoPhoto courtesy of freedigitalphotos.net.

What is reasonable compensation?  In noted valuation expert Shannon Pratt’s book, The Lawyer’s Business Valuation Handbook”, he defines it simply as “What would it cost the company for a hypothetical replacement for the position in question.”  He further notes that the principle is substitution, not on whether the specific person is worth more or less.  Pratt notes that when determining reasonable compensation, the expert must quantify the total compensation being paid to the party in question and compare that to the compensation needed to attract an employee or employees of similar skill.

Why is it important?  Because the higher the reasonable compensation, the lower the value of the business and vice versa.  As such, when there are partisan experts, it is not unusual for these subjective factors to favor the party that the expert is working for.  That said, depending on the industry, there are numerous publications and databases that the experts use to determine reasonable compensation – so one would think that this subjective factor might be closer.  That happens sometimes, but not always.

For divorce purposes, as well as many other situations where businesses are valued, they are valued based in whole or part on their income.  Reasonable compensation is a consideration in two valuation methods often seen in divorce cases – the excess earnings method and the capitalization of earnings method.  These methods involve examining earnings available to a potential hypothetical buyer after he or she receives a “reasonably compensation”  for running the business. Earnings available, beyond “reasonable compensation” are a large factor in valuation. The higher this figure is, the more the business may be worth. In the excess earnings method, the difference between actual compensation and reasonable compensation is capitalized and for all intents are purposes represents the “intangible asset” known as good will of the business.

In cases where there are publications and databases, such as physicians or laywers, for example, one would expect to see the experts using the data sources, but selecting income information from different percentiles, etc. That said, I just had a matter where the experts differed by nearly $600,000 on reasonable compensation of a doctor causing their values to be about $1.5 million, or more apart.  In that case, a forensic accountant was brought in to mediate and his opinion was far closer to one party than the other – ultimately getting the people closer to settlement.

In another case, an expert imputed two full time high management level incomes to father and son, where (1) dad worked part time; (2) son just came into to business and was learning the ropes; and (3) there had never been two people in those roles before.  The result was a lowering the value.

In another case, the husband was the sole partner of a law firm that had a few associates.  While the firm was extremely profitable for its size, much of the profits were based upon leveraging associates, as the owner’s actual billable hours were pretty small compared to the “average” lawyer.  Because there was no office manager, his expert used reasonable compensation for a lawyer (without adjusting for the fact that this lawyer billed less hours than the peer group that he was being compared to) plus reasonable compensation for an office manager.  The net result of this was substantially lowering the value of his practice.  After a trial, the judge did not buy this and accepted the valuation of our experts who were much more conservative.

In another matter, the opposing expert used a similar figure that our expert used.  However, though he used a five year model, he kept the compensation fixed for each of the 5 years, which is not only unrealistic, it is contrary to economic reality.  As such, it skewed his value in favor of his client’s position.

In yet another matter, the client was a brand new partner at one of the top handful of law firms in the country.  Compensation at that firm was significantly higher than even most big firms and non equity partners were making almost seven figures.  The client himself got a seven figure offer to go in house.  That said, the expert used “reasonable compensation” that was more than $750,000 less than he actually earned.  Needless to say, that skewed value in an unreasonable way and was disregarded.

It is important to understand the concept of reasonable compensation, question the experts about their assumptions and data sources used, to make sure that the “reasonable compensation” used in your valuation is not unreasonable.

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Eric 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.

As noted in yesterday’s post on  Minkowitz v. Israeli, the Appellate Division held that once you serve as a mediator, cannot then serve as an arbitrator, absent prior written consent to the dual role.  But the decision written by Judge Lihotz did more than that.  She seemingly opined upon what should be the “best practices” for binding arbitration, in large measure noting that the trial court was too involved in the process after arbitration was agreed to.

 

Flowchart And 3d Character Shows Process Or Procedure Stock Photo*Image courtesy of FreeDigitalPhotos.net

The decision noted, as follows:

We close with these observations.    Arbitration, particularly binding arbitration, must be purposefully chosen, and the parameters must be designated in a contract between the parties. If binding arbitration is selected as the forum for resolution of disputes, a litigant cannot jump back and forth between the court and the arbitral forum. By its very nature, arbitration does not permit such a hybrid  system.  Further,  arbitration “should be a fast and inexpensive way to achieve final resolution of . . . disputes and not merely a way-station on route to the courthouse,” Borough of E. Rutherford, supra, 213 N.J. at 201 (internal quotation marks and citations omitted). Attempts to return to the court, except to confirm the final arbitration award, are at odds with this objective.

In the matter at bar, the parties’ contract concisely defined matters to be addressed in arbitration, yet from commencement, the Family Part maintained involvement such as scheduling case management and entertaining a motion for a protective order, both of which fall directly within the adjudicatory responsibilities of the arbitrator. N.J.S.A.  2A:23B-17e. Moreover, the parties held a mistaken belief that court intervention was permitted to check the decisions of the arbitrator.   This is untenable. The Act’s provisions are unmistakable: once binding arbitration is chosen and the arbitrator(s) named, the court is no longer involved in reviewing or determining the substantive issues.     The court’s role is circumscribed to confirm a final arbitration award, correct obvious errors, and consider whether the award should be vacated, only when one of the limited bases set forth in N.J.S.A. 2A:23B-23 has occurred.  The piecemeal approach  demonstrated here prolonged the final result and eliminated the main benefit of arbitration, “to provide an effective, expedient, and fair resolution of disputes[.]”    Fawzy, supra,  199 N.J. 470 (citations omitted).

Finally, had the parties actually followed the path of binding arbitration, the need for a PSA would be obviated because an issued arbitration award would be confirmed by court order assuring compliance. No separate agreement memorializing the order is needed. Insistence upon preparation of a PSA appears to result from habit, not necessity.

Lastly, we do not mean to suggest parties who seek to arbitrate disputes should abandon all hope of amicable resolution.   We urge parties to exhaust possible settlement alternatives prior to contracting for arbitration.   If arbitration is accepted, parameters for settlement discussions should be set by the arbitrator.  (Emphasis added.)

I think that this last part of the case will be particularly helpful to the bench and bar.  I have seen judges handle this in a whole host of ways, without any hint of uniformity.  What this doesn’t say is what should happen procedurally with the divorce.  I have had some judges insist that the parties get divorced before going to arbitration, which brings with it a whole host of COBRA and ERISA issues, to name a few.  Other judges, who allowed the parties to proceed to arbitration, actively case managed the arbitration to make sure that it proceeded quickly, even if the parties and arbitrator wanted otherwise.  This is clearly because the case remains on the active docket and thus could look bad from a statistics perpective.  A resolution suggested by others would be to create an “arbitration track” to take these cases out of the normal divorce case statistics. In any event, any guidance to procedural uniformity is a good thing.

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Eric 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.

Last week, Jennifer Millner authorized a post  entitled “Don’t Forget to Check your Life Insurance!” on this blog.  Two weeks ago, I posted a blog about the seminar that I recently participated in regarding the top “financial mistakes”, focusing on possible overlooked considerations regarding the marital home.  At that seminar, I raised some additional points regarding life insurance that merit consideration.  Here are a few:

  • if it is a limited duration alimony case, consider reducing the amount of the obligation during each year of the term.  Even if it is a permanent alimony case, give consideration to reducing the total life insurance at some point (though this is harder to get agreement on then in a LDA case).
  • To calculate the amount of necessary life insurance, don’t forget to present value and tax affect the obligation.  If you simply multiply the amount of alimony by the term, you will likely be over securing the obligation.
  • Make sure that you are insurable before agreeing to obtain life insurance.  If you are agreeing to get more life insurance than you have, make sure you can get it before you agree.
  • Similarly, if term insurance is presently in effect, find out when the term ends.  If the term of life insurance expires before the term of alimony and/or before emancipation of all children, discussion should be had as to whether obtain additional insurance at the time of the settlement before it becomes cost prohibitive or unavailable.
  • If someone has an existing medical condition and they are being asked to get life insurance, if available at a reasonable cost, define what “reasonable cost” means.
  • If someone is going to be relying solely or heavily on life insurance provided through employment, consideration should be given to what will happen if that job is lost, as is the insurance coverage.  In fact, you may want to consider getting private life insurance if available and cost effective.

The above considerations are not inclusive, but are things that should be given consideration before an agreement is reached. Moreover, while not all of these things are applicable in all cases, they are certainly things that should be considered, as appropriate.

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Eric 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 practices in Fox Rothschild’s Roseland, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com.

 

There has been an alimony reform movement that has been gaining traction throughout the country.  Some of the major concerns appear to be this issue of permanent alimony and the lack of uniformity in alimony awards, both in amount and duration, from case to case.  In the recent past, alimony laws have been reformed in Florida, Massachusetts and Maryland.  Is New Jersey next?

On March 7, 2013, A3909 was introduced in the New Jersey Assembly, which, if passed, would radically change alimony as we know it in New Jersey. 

The following are a highlight of the changes:

  • All references to permanent alimony are deleted from the statute, though, as noted below, for marriages of more than 20 years, an indefinite award of alimony can be be granted

 

  • The concept of imputing income to someone that is unemployed or underemployed, which already exists in the case law and child support guidelines, would be codified

 

     

  • The amount of limited duration alimony should not exceed the recipient’s need or 30 to 35 percent in the difference between the parties gross incomes at the time of the initial award, though a court would have the discretion to deviate.  Some reasons for deviation would be advanced age, chronic illness, unusual health circumstances, whether the payer is providing or ordered to provide health insurance to the recipient, sources and amounts of unearned income not allocated in equitable distribution, the recipient’s inability to become self-supporting based upon the abuse of the payer, and others, including a catch all "any other factors that a court deems relevant and material."

 

Continue Reading Is Alimony Reform On Its Way in New Jersey

We have done dozens of posts on this blog about alimony over the last 5 years.  Recent experiences have convinced me that it is time to get basics. Despite all of the cases that say that you can’t use a formula (the rule of thumb we have discussed previously on this blog), more and more, people are espousing a blind adherence to the rule of thumb.  In one recent case with income of a few hundred thousand, an adversary told me that it was the maximum amount of alimony that I can get, despite the fact that it came no where close to meeting my client’s already pared down budget.  In another case, where the income was a few million, one side was arguing that the rule of thumb was a minimum, as if there should be no consideration of any other factors.

Despite the calls for alimony reform and formulas, as we have said many times, courts deciding cases cannot use rules of thumb.  Even when they do, they can’t tell you that they did.  Rather, they have to review the alimony factors set forth in the statute – remember them?  Here, they are again, from N.J.S.A. 2A:34-23(b):

(1) The actual need and ability of the parties to pay;

(2) The duration of the marriage or civil union;

(3) The age, physical and emotional health of the parties;

(4) The standard of living established in the marriage or civil union and the likelihood that each party can maintain a reasonably comparable standard of living;

(5) The earning capacities, educational levels, vocational skills, and employability of the parties;

(6) The length of absence from the job market of the party seeking maintenance;

(7) The parental responsibilities for the children;

(8) The time and expense necessary to acquire sufficient education or training to enable the party seeking maintenance to find appropriate employment, the availability of the training and employment, and the opportunity for future acquisitions of capital assets and income;

(9) The history of the financial or non-financial contributions to the marriage or civil union by each party including contributions to the care and education of the children and interruption of personal careers or educational opportunities;

(10) The equitable distribution of property ordered and any payouts on equitable distribution, directly or indirectly, out of current income, to the extent this consideration is reasonable, just and fair;

(11) The income available to either party through investment of any assets held by that party;

(12) The tax treatment and consequences to both parties of any alimony award, including the designation of all or a portion of the payment as a non-taxable payment; and

(13) Any other factors which the court may deem relevant.

Continue Reading Alimony – Back to Basics

Early in case where children are involved, we discuss the different types of custody.  There is residential custody – i.e. who the children live with and the resulting parenting time for the other parent. Then there is legal custody which is decision making regarding issues of the health, education, religion and general welfare of the kids.  in 99% of the cases, the parties will share joint legal custody – it is usually a no brainer.  in fact, In the New Jersey Supreme Court’s seminal decision of Beck v. Beck, 86 N.J. 480, 497-501 (1981), the Court stated as follows with regard to whether joint custody should be awarded:

At a minimum both parents must be ‘fit’ that is, physically and psychologically capable of fulfilling the role of parent.

That said, the minimum requirement of joint legal custody is the ability to communicate and cooperate on some basic level as it relates to the best interests of the children.  The Court in Beck further noted:

The judge must look for the parents’ ability to cooperate and if the potential exists, encourage its activation by instructing the parents on what is expected of them. . . [W]hen the actions of [an uncooperative] parent deprive the child of the kind of relationship with the other parent that is deemed to be in the child’s best interests, removing the child from the custody of the uncooperative parent may well be appropriate as a remedy of last resort.

Again, in Beck, the Supreme Court of New Jersey has written:

The most troublesome aspect of a joint custody decree is the additional requirement that the parents exhibit the potential for cooperation in matters of child rearing. This feature does not translate into a requirement that the parents have an amicable relationship. Although such a positive relationship is preferable, a successful joint custody arrangement requires only that the parents be able to exclude their personal conflicts from their roles as parents and that the children be spared whatever resentments and rancor the parents may harbor. Beck v. Beck, 480, 498 (1981).

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