A recent unpublished (non-precedential) decision, Steffens v. Steffens, suggests that the answer to the above question is “no.”

In Steffens, the Wife sought to set aside a prenuptial agreement, arguing that it was unconscionable, in large part because the alimony payments she was to receive under the agreement would not allow her to maintain

Reading the recently unpublished (not precedential) Appellate Division matter of Connaughton v. Connaughton  brought me back to my days of toiling as an account executive at an advertising agency in Manhattan. Our team often worked long hours and frequently traveled for client meetings, commercial shoots, and the like.

Advertising also was and remains notorious for forcing account and creative executives to switch from agency to agency in order to make more money over time.  For instance, a person who just joined an agency may be making tens of thousands of dollars more than a similarly situated person who started with and remained at the same agency throughout their career for no other reason than that the newly hired person came from a different agency.

The income situation in Connaughton was interesting in that Brian’s historical income increased as he frequently switched jobs and moved up the proverbial ladder.  Similarly interesting was Elizabeth’s income growth, which stalled once she left the workforce and gave birth to the parties’ child.  Specifically, the parties married in 1995, and a year later, Brian obtained a job with J. Walter Thompson while Elizabeth commenced a period of freelance work that lasted throughout the remainder of the marriage.


Continue Reading Imputation of Income in the World of Advertising

In determining a payor spouse’s gross income in analyzing an appropriate level of alimony or child support, one question that arises on occasion is whether to include so-called “mandatory” contributions to the total number.  For instance, if the payor spouse is required by his employer to contribute $30,000 per year towards his 401(k), should such money be included in that spouse’s income in determining support?  As to child support, the answer is a definitive “no.”

As to alimony, since such contributions are excluded from the child support equation and child support carries great weight as a matter of public policy – the New Jersey Child Support Guidelines posit that children should not be forced to live in poverty due to family disruption – it is only sensible and reasonable for such contributions to be similarly be excluded from the alimony calculation.  Simply put, since the Guidelines consider any and all sources of income to aid children, the fact that mandatory contributions are excluded demonstrates that it would be even more unfair and unreasonable to include such contributions in calculating alimony.

The Guidelines provide a definition for “gross income” and, in so doing, expressly exclude mandatory contributions.  Gross income is defined as “all earned and unearned income that is recurring or will increase the income available to the recipient over an extended period of time.  When determining whether an income source should be included in the child support guidelines calculation, the court should consider if it would have been available to pay expenses related to the child if the family would have remained intact or would have formed and how long that source would have been available to pay those expenses.”


Continue Reading TO INCLUDE OR EXCLUDE MANDATORY CONTRIBUTIONS IN DETERMINING INCOME – A BASE-LEVEL ANALYSIS

Perhaps its the stress of family life during the holiday season, but many clients of late have claimed that the supporting spouse has stopped supporting the family as he did during the marriage.  The reasons are varied, but often of the same cloth – i.e., the payor spouse claims that he is now earning less money than before, the payor spouse claims that the payee spouse is overspending (despite there being no change from the marital lifestyle) and believes that the supported spouse should get a job after having never worked during the marriage, or, most egregiously, that they simply believe that the marriage is over and a support obligation is over unless a Court directs otherwise.

These situations often leave the supported spouse afraid and wondering how they are going to meet everyday expenses for herself and the kids, while also litigating a divorce matter against their financially superior spouse.  Often this is part of the supporting spouse’s underlying strategy – economic coercion, i.e., essentially trying to force the supported spouse to settle under his terms without going through a protracted litigation.


Continue Reading Fears of a Supported Spouse – Maintaining The “Status Quo” During a Divorce Proceeding

When determining an alimony award, New Jersey courts look at a variety of factors that are listed under N.J.S.A. 2A:34-23(b).  At the very top of that list is "The actual need and ability of the parties to pay."  Similarly, when determining child support, one factor that courts in this State consider is "All sources of income and assets of each parent."  When determining a payor spouse’s income, courts will consider both the supporting spouse’s present earnings and potential earning capacity.

The question becomes more complicated when the payor spouse owns his or her own business.  Oftentimes tax returns do not tell the whole story and cannot be relied upon as the sole source for rendering an income determination.  For instance, that spouse may have a bank account under the business name, but uses it nevertheless for personal expenses.  Oftentimes such personal expenses are not accounted for on a tax return as income and it then becomes a matter of determining what the actual income level is.  Another example may involve the spouse being reimbursed through the business for personal travel expenses. 


Continue Reading Appellate Division Examines a Spouse’s Ability To Pay Support

New Jersey has upheld the long standing principle that permanent alimony awards are subject to review, modification and possibly termination based upon changed circumstances.  (Lepis v. Lepis, 83 N.J. 139 (1980).  However, it is not enough to paint a bleak picture of a payor’s financial circumstances in order to succeed in a downward modification or termination of alimony.  The applicant must also show the Court that the financial difficulties being encountered are not temporary and/or subject to contingent circumstances.  Innes v. Innes, 117 N.J. 496 (1990).

In the recent unreported Appellate Division decision of Norych v. Norych (A-2633-07T1 decided April 16, 2009), while the payor applicant provided the court with very grim descriptions of his personal financial situation and the financial affairs of his law firm, the applicant miserably failed to substantiate his professed circumstances.

In the Norych matter, the parties were divorced in 1992 and at the time of the divorce, the ex-wife received a permanent alimony award of $1,000 per month partly based on ex-husband’s law firm income of $70,000 per year and ex-wife’s income as a teacher of $25,000 per year.  Ten years later, the alimony increased to $1,100 per month.  In October 2007, ex-husband filed a Motion seeking to terminate his alimony obligation based upon  what he characterized as two devastating and shocking events. 


Continue Reading Painting a Grim Financial Picture…Is It Enough To Obtain a Decrease Or Termination Of Support?