The issue of whether an inheritance is included into the divorce mix is dependent upon the particular circumstances. An inheritance is treated differently when discussing equitable distribution, as opposed to alimony and child support obligations. This article will explain the differences.
Equitable distribution is the splitting up of the marital assets such as real estate, furniture, banking and brokerage accounts, vehicles, as well as liabilities during a divorce. Under New Jersey law, N.J.S.A. 2A:34-23(h), an inheritance or gift obtained either before or during the marriage will be exempt from equitable distribution. So if a wife receives an inheritance as a result of her father’s passing, she is not required to share the inheritance with her husband. Certain restrictions are necessary, if the inheritance is real property the deed must be titled only in the wife’s name. Likewise, if the inheritance is monies, the bank accounts must be only in her name. However, if the inherited house given to the wife is re-titled into both the wife and husband’s names, the court has construed this to be an interspousal gift and the inheritance is no longer exempt from marital property and therefore, subject to equitable distribution. Generally, if the inherited asset such as monies is deposited into a joint banking account or used to acquire something for the marriage (purchase of a condo or vehicle used by both husband and wife) it is likely to be subject to equitable distribution. However, an exception to this rule was carved out in a court case.
In a 1990 case[1], a gift of $10,000.00 was given by a father to his son which at the time was the maximum allowable gift amount one person could give to another in a given year without incurring a federal gift tax. In addition, the aunt also gave the same amount as a gift to her nephew. The recipient of the gifts (the husband) deposited the funds into the marital joint bank account before withdrawing the funds 18 days later. Thereupon, he took the $20,000.00 plus accumulated interest and placed same into an individual certificate of deposit bank account. Subsequently, when the couple divorced the following year, the wife sought to have the funds counted as part of the marital assets since they were deposited into the joint account for the 18 day period. The Appellate Division rejected the wife’s assertions by viewing the intentions of the parties. Both the father and aunt testified during the trial that their intent was to give the funds only to the husband and not to the wife. The husband testified that it was mere convenience to deposit the funds into the joint account for the approximate two week period while he searched for better bank interest rates. It was never his intent to make the funds part of the marital assets and the funds were not used during this brief period. As a result, the court ruled the gifts to the husband exempt from the marital assets.
In regard to alimony and child support, the court will count an inheritance towards a person’s ability to pay. A court may consider, “The income available to either party through investment of any assets held by that party.”[2] So although the actual inheritance amount will not be factored into the amount for payment of support, the interest accrued on the inheritance will be factored into the available funds for support purposes. The Appellate Court considered a father’s inheritance in calculating child support stating that it was proper to include it even though he spent the inheritance on a new house and vehicle.[3] In a similar case, the court felt it was necessary to, “impute income to the obligor for interest that could have been earned on the inheritance had it been invested in other ways.”[4] In another case, the wife who was receiving alimony saw that her inheritance was used in the calculation to modify her weekly alimony payment. The court held that, “income generated by a dependent spouse’s inheritance is no different from income generated by any other asset.”[5] In another alimony modification case, the court was obliged to consider the ex-husband’s income and the claim that the ex-wife “received a substantial inheritance in determining whether the ex-husband had made a prima facie showing of changed circumstances so as to be entitled to the discovery of the ex-wife’s financial information” in his motion to reduce his alimony payments.[6]
So, what does this mean to the person who inherited funds during the marriage and is getting divorced? If you didn’t comingle the funds with marriage monies, the inheritance is exempt for equitable distribution purposes. But, if you are likely to pay alimony or child support, the interest on the inheritance can be counted towards your support payment obligations. And for the individual who is already divorced and paying alimony or child support, a newly acquired inheritance can mean that you may be responsible for increased support payments should your ex-spouse bring you back to court.
Understanding inheritance and how it affects payments in divorce matters is important to those individuals considering divorce. The future treatments of foreseeable inheritances can be dealt with during the divorce mediation process. As an example, the divorcing couple can discuss and plan for a future inheritance during divorce mediation by agreeing to include or exclude the inheritance if and when it occurs, as well as determining in advance whether a lump sum payment amount would be more beneficial to the couple in lieu of monthly extra support payments. The idea is to plan ahead rather than engage in post divorce litigation. At Montclair Divorce Mediation, we plan ahead and try to resolve potential future conflict before an issue arises.
[1] Otsko v. Dotsko, 244 N.J. Super. 668 (App. Div 1990)
[2] N.J.S.A. 2A:34-23(B)(11)
[3] Connell v. Connell, 313 N.J. Super. 426 (App. Div. 1998)
[4] Stiffler v. Stiffler, 304 N.J. Super. 96 (Ch. Div. 1997)
[5] Aronson v. Aronson, 245 N.J. Super. 354 (App. Div. 1991)
[6] Stamberg v. Stamberg, 302 N.J. Super. 35 (App. Div. 1997)
Tuesday, September 8, 2009
Tuesday, August 25, 2009
Cohabitation
Most divorce property settlement agreements in which alimony is a component will contain a clause regarding cohabitation by the alimony recipient. The clause is part of what many divorce lawyers call the boilerplate clauses, identified as standard, usual sections or paragraphs that appear in most settlement agreements. Many attorneys will give the boilerplate clause a cursory reading because they have seen them before. But to the divorcing couple boilerplate clauses can contain wording which may have subsequent unintended consequences. A cohabitation clause generally states that if the alimony recipient resides with another individual usually an unrelated person of the opposite sex (but not always defined as such) the alimony payer can seek court intervention to modify or terminate the alimony obligation. The reasoning behind the clause is to keep the alimony recipient from residing with the significant other and still reap the benefits of alimony. Consider the following cohabitation standard clause.
Alimony payments shall terminate upon the death of the Husband, the death of the Wife, the remarriage of the Wife, or in the event the Wife resides with any unrelated man without the benefit of marriage for a period continuing for beyond sixty (60) consecutive days.
In the above instance, if the wife resides with an unmarried male for over a specific time period the ex-husband can seek to terminate the alimony obligation. However, what happens if the wife decides to cohabitate with her new significant other who happens to be female? The above clause is silent on this subject and should the ex-husband seek to terminate the alimony the court would initially need to decide whether the ex-husband had any foundation to bring the matter to the court’s attention.
The court’s interpretation of cohabitation has provided two critical lines of thinking. In one instance the court looked at the relationship and opined that: “Cohabitation involves an intimate relationship in which the couple has undertaken duties and privileges that are commonly associated with marriage. These can include, but are not limited to, living together, intertwined finances such as joint bank accounts, sharing living expenses and household chores, and recognition of the relationship in the couple's social and family circle.”[1] In addition, “A mere romantic, casual or social relationship is not sufficient to justify the enforcement of a settlement agreement provision terminating alimony. Such an agreement must be predicated on a relationship of cohabitation that can be shown to have stability, permanency and mutual interdependence.”[2] In the same case but at the appellate level the court stated, “cohabitation is tantamount to a marriage”. [3]
In the second and different line of reasoning the court did not view the relationship as tantamount in considering cohabitation but rather the economic benefit the relationship provided to the alimony recipient. “In the changed circumstances of cohabitation modification is warranted when either the cohabitation contributes to the dependent spouse’s support or lives with the dependent spouse without contributing.”[4] The court went on to query whether the need of the dependent former spouse is reduced by the cohabitation. “It is the financial impact of cohabitation, not the relationship itself that triggers review of alimony obligations.”[5] “The test is whether one cohabitant subsidizes the other enough to warrant relief.”[6] “The reduction in financial need is the critical factor in the analysis of alimony modification.”[7]
Based upon the two lines of thinking that the court has professed, it becomes critically important that the drafter of a property settlement agreement and the divorcing couple understand what the term cohabitation means and when can someone subsequently invoke the clause to seek alimony modification. At Montclair Divorce Mediation, the term cohabitation is not just tossed into a boilerplate clause. But rather, cohabitation is explained to the couple and a range of options is presented so that the couple can make an informed decision. Fully documenting what the couple’s intent is during the drafting stage can keep the couple from costly future litigation.
Since the court also considered the economic benefit to cohabitation and not just a relationship it would be wise to consider the cohabitation clause as a potential area where the court in future cases will expand the definition of what constitutes cohabitation. Is it foreseeable that the court reject a relationship aspect altogether and look merely at finances? What about those instances when the dependent spouse receiving alimony takes in roommates to make ends meet? Perhaps it would be advisable to include such provisions at the drafting stage rather than wait for future court interpretation.
[1] Konzelman v. Konzelman, 158 N.J. 185 (1999)
[2] Konzelman, ibid.
[3] Konzelman v. Konzelman, 307 N.J. Super. 150, 161 (App. Div. 1998), affirmed 158 N.J. 185 (1999)
[4] Garlinger v. Garlinger, 137 N.J. Super. 56, 64 (App. Div. 1975)
[5] Gayet v. Gayet, 92 N.J. 149, 155 (1983)
[6] Boardman v. Boardman, 314 N.J. Super. 344 (App. Div. 1998)
[7] Conlon v. Conlon, 335 N.J. Super. 638, 649 (Ch. Div. 2000)
Alimony payments shall terminate upon the death of the Husband, the death of the Wife, the remarriage of the Wife, or in the event the Wife resides with any unrelated man without the benefit of marriage for a period continuing for beyond sixty (60) consecutive days.
In the above instance, if the wife resides with an unmarried male for over a specific time period the ex-husband can seek to terminate the alimony obligation. However, what happens if the wife decides to cohabitate with her new significant other who happens to be female? The above clause is silent on this subject and should the ex-husband seek to terminate the alimony the court would initially need to decide whether the ex-husband had any foundation to bring the matter to the court’s attention.
The court’s interpretation of cohabitation has provided two critical lines of thinking. In one instance the court looked at the relationship and opined that: “Cohabitation involves an intimate relationship in which the couple has undertaken duties and privileges that are commonly associated with marriage. These can include, but are not limited to, living together, intertwined finances such as joint bank accounts, sharing living expenses and household chores, and recognition of the relationship in the couple's social and family circle.”[1] In addition, “A mere romantic, casual or social relationship is not sufficient to justify the enforcement of a settlement agreement provision terminating alimony. Such an agreement must be predicated on a relationship of cohabitation that can be shown to have stability, permanency and mutual interdependence.”[2] In the same case but at the appellate level the court stated, “cohabitation is tantamount to a marriage”. [3]
In the second and different line of reasoning the court did not view the relationship as tantamount in considering cohabitation but rather the economic benefit the relationship provided to the alimony recipient. “In the changed circumstances of cohabitation modification is warranted when either the cohabitation contributes to the dependent spouse’s support or lives with the dependent spouse without contributing.”[4] The court went on to query whether the need of the dependent former spouse is reduced by the cohabitation. “It is the financial impact of cohabitation, not the relationship itself that triggers review of alimony obligations.”[5] “The test is whether one cohabitant subsidizes the other enough to warrant relief.”[6] “The reduction in financial need is the critical factor in the analysis of alimony modification.”[7]
Based upon the two lines of thinking that the court has professed, it becomes critically important that the drafter of a property settlement agreement and the divorcing couple understand what the term cohabitation means and when can someone subsequently invoke the clause to seek alimony modification. At Montclair Divorce Mediation, the term cohabitation is not just tossed into a boilerplate clause. But rather, cohabitation is explained to the couple and a range of options is presented so that the couple can make an informed decision. Fully documenting what the couple’s intent is during the drafting stage can keep the couple from costly future litigation.
Since the court also considered the economic benefit to cohabitation and not just a relationship it would be wise to consider the cohabitation clause as a potential area where the court in future cases will expand the definition of what constitutes cohabitation. Is it foreseeable that the court reject a relationship aspect altogether and look merely at finances? What about those instances when the dependent spouse receiving alimony takes in roommates to make ends meet? Perhaps it would be advisable to include such provisions at the drafting stage rather than wait for future court interpretation.
[1] Konzelman v. Konzelman, 158 N.J. 185 (1999)
[2] Konzelman, ibid.
[3] Konzelman v. Konzelman, 307 N.J. Super. 150, 161 (App. Div. 1998), affirmed 158 N.J. 185 (1999)
[4] Garlinger v. Garlinger, 137 N.J. Super. 56, 64 (App. Div. 1975)
[5] Gayet v. Gayet, 92 N.J. 149, 155 (1983)
[6] Boardman v. Boardman, 314 N.J. Super. 344 (App. Div. 1998)
[7] Conlon v. Conlon, 335 N.J. Super. 638, 649 (Ch. Div. 2000)
Wednesday, August 5, 2009
The Engagement Ring
The engagement ring is a symbol that conveys love and commitment. Presented usually by the man to his fiancé, the ring is hope, the future, and when coupled with the wedding ring, everlasting unity. But what happens to the engagement ring when the marriage doesn’t last? This question normally arises when the marriage is of short duration. The return of the engagement ring usually becomes a sticking point for the man. The ring takes on more significance than its financial value in some divorce cases. Indeed, the arguing prior to a trial of who gets the ring in a divorce can cost more in time and attorney fees than the ring’s resale value. The engagement ring can become a very emotional issue to some divorcing couples.
In the case, Winer vs. Winer,[1] the court was faced with answering this question, as well as whether the condominium purchased prior to the marriage by the husband was part of the marital property and subject to equitable distribution. To the New Jersey court, the engagement ring was determined to be a conditional gift which was presented by the giver to the receiver who in consideration of receiving the ring promised to marry the giver. If the engagement was subsequently called off, the receiver must return the ring. But once the couple completes their wedding vows, the engagement ring belongs to the receiver and is not part of marital property and thus not subject to equitable distribution in a divorce. The court took an interesting view of the engagement ring in light of other assets in the case. The court did not view the ring as consideration for a continuing promise of marriage or part of a particular set, such as the engagement and wedding rings, nor did it view the ring as an object acquired in contemplation of marriage which according to this same case, would subject an item to equitable distribution.
In reviewing the facts of the case we learn that Mr. Winer proposed marriage and thereafter purchased a condominium with his own funds with the intention that it was going to become the marital residence. After the couple married they resided in the condo for a few years. Consequently, during the divorce Mrs. Winer sought half of the value of the marital residence. The court relying on an earlier case, Weiss vs. Weiss,[2] opined that a date prior to the marriage ceremony may be used for determining what property is subject to equitable distribution. The court quoted from the Weiss opinion:
“We believe that for the purpose of triggering a right of equitable distribution a marital partnership may be found to have commenced prior to the marriage ceremony, where the parties have adequately expressed that intention and have acquired assets in specific contemplation of their marriage. This conclusion recognizes that the shared enterprise of marriage may begin before the actual marriage ceremony through the purchase of a major marital asset such as a house and subsequent improvements to that asset.”
As a result, the court declared the condo to be part of the marital assets and Mrs. Winer was entitled to share in its value. It is interesting that the same court did not consider the purchase and presentation of the engagement ring to be an expressed intention of a shared enterprise and in contemplation of the marriage. Rather, the court viewed the giving of the engagement ring, its acceptance and the marriage ceremony to be a complete transaction in of its self.
Perhaps it’s time to revisit the notion that the engagement ring is not part of the marital assets. This would certainly be a relief to many divorcing husbands in at least knowing that the ring’s ownership and value is not predetermined.
[1] Winer v.Winer, 241N.J. Super 510 (App. Div. 1990)
[2] Weiss v. Weiss, 226 N.J. Super. 281, (App. Div. 1988), certif.. den., 114 N.J. 287 (1988)
In the case, Winer vs. Winer,[1] the court was faced with answering this question, as well as whether the condominium purchased prior to the marriage by the husband was part of the marital property and subject to equitable distribution. To the New Jersey court, the engagement ring was determined to be a conditional gift which was presented by the giver to the receiver who in consideration of receiving the ring promised to marry the giver. If the engagement was subsequently called off, the receiver must return the ring. But once the couple completes their wedding vows, the engagement ring belongs to the receiver and is not part of marital property and thus not subject to equitable distribution in a divorce. The court took an interesting view of the engagement ring in light of other assets in the case. The court did not view the ring as consideration for a continuing promise of marriage or part of a particular set, such as the engagement and wedding rings, nor did it view the ring as an object acquired in contemplation of marriage which according to this same case, would subject an item to equitable distribution.
In reviewing the facts of the case we learn that Mr. Winer proposed marriage and thereafter purchased a condominium with his own funds with the intention that it was going to become the marital residence. After the couple married they resided in the condo for a few years. Consequently, during the divorce Mrs. Winer sought half of the value of the marital residence. The court relying on an earlier case, Weiss vs. Weiss,[2] opined that a date prior to the marriage ceremony may be used for determining what property is subject to equitable distribution. The court quoted from the Weiss opinion:
“We believe that for the purpose of triggering a right of equitable distribution a marital partnership may be found to have commenced prior to the marriage ceremony, where the parties have adequately expressed that intention and have acquired assets in specific contemplation of their marriage. This conclusion recognizes that the shared enterprise of marriage may begin before the actual marriage ceremony through the purchase of a major marital asset such as a house and subsequent improvements to that asset.”
As a result, the court declared the condo to be part of the marital assets and Mrs. Winer was entitled to share in its value. It is interesting that the same court did not consider the purchase and presentation of the engagement ring to be an expressed intention of a shared enterprise and in contemplation of the marriage. Rather, the court viewed the giving of the engagement ring, its acceptance and the marriage ceremony to be a complete transaction in of its self.
Perhaps it’s time to revisit the notion that the engagement ring is not part of the marital assets. This would certainly be a relief to many divorcing husbands in at least knowing that the ring’s ownership and value is not predetermined.
[1] Winer v.Winer, 241N.J. Super 510 (App. Div. 1990)
[2] Weiss v. Weiss, 226 N.J. Super. 281, (App. Div. 1988), certif.. den., 114 N.J. 287 (1988)
Thursday, July 30, 2009
Planning for Marital Seperation
What happens when the primary income earner decides the marriage is over and leaves the marital residence? The first reaction by the remaining spouse is likely anger and fear. The fear of the unknown, what’s going to happen next and how are the bills going to be paid are very real and valid concerns. When the primary incomer earner, in a majority of the cases, the husband, leaves the home he is likely to rent an apartment. As a result, there are additional monthly expenses besides the rent, such as utilities which must get paid. In many instances, there may not be sufficient income to pay the ordinary marital household expenses and the new apartment expenses. What usually occurs next is that the husband reduces the available income normally allocated towards paying the marital residences’ monthly expenses. The result is foreseeable, more arguments, more anger and fear. One of the main problems with this scenario is the lack of communication and preparation for the separation of the couple. Instead of discussions, budget planning and mutual agreements between the couple, there is a unilateral action taken by the husband and forced upon the wife. The lack of planning normally has drastic consequences for both of them.
In New Jersey, the remaining spouse in the household who counted on the primary income earner for support may bring a motion in the Superior Court, Family Part after the filing of a divorce complaint seeking a court order to force the primary income earner to continue to pay the normal and reasonable martial household expenses. This motion is called Pendente Lite, which means pending the litigation. This is an award of funds intended to provide temporary support during the pendency of the divorce. Pendente Lite payments are regarded by the court as a means for maintaining the status quo between the couple until the court can undertake a full analysis of their financial situation. The court has full discretionary authority to force the primary income earner to pay or in the case of duel income households, to continue to contribute his share to the marital monthly expenses and pay for the dependent spouse’s attorney fees for the cost of the motion. The court may also order the use of bank accounts or the selling of marital assets which can later be charged against the husband during the final distribution of assets between the couple to maintain the status quo.
The result, award of Pendente Lite support is that most in not all of the normal marital monthly expenses are paid by the primary income earner and his post separation expenses are not fully taken into consideration. This rebalancing of monthly income and liabilities, may place the primary incomer earner is worst financial circumstances than prior to leaving the marriage and marital residence.
A better solution would be for the divorcing couple to come to terms that a separation is eminent and rationally prepare for its financial aftermath. Open and frank discussions, if possible would potentially alleviate the aftershock of the primary income earner learning that he may not have sufficient monthly income to pay for the two residences. It would also benefit the remaining spouse by hopefully reducing some of the stress and fear of the unknown. Divorce mediation would be quite helpful in this situation. A divorce mediator can assist the couple in the realization of the limited funds, offer options after identifying and discussing the couple’s concerns and prepare a separation agreement which address those concerns and detail the couple’s respective responsibilities.
Once an interim separation agreement is in place, a certain trust usually ensues between the couple. Then the couple through the divorce mediator can commence discussions on their long term plans for asset and liability distribution, spousal support, child support, visitation issues and the handling of tax consequences. The divorcing couple through proper planning and the use of an experienced divorce mediator can save thousands of dollars in legal and court cost fees, as well as heal quicker than if they allow emotional and reactive impulses to take control.
In New Jersey, the remaining spouse in the household who counted on the primary income earner for support may bring a motion in the Superior Court, Family Part after the filing of a divorce complaint seeking a court order to force the primary income earner to continue to pay the normal and reasonable martial household expenses. This motion is called Pendente Lite, which means pending the litigation. This is an award of funds intended to provide temporary support during the pendency of the divorce. Pendente Lite payments are regarded by the court as a means for maintaining the status quo between the couple until the court can undertake a full analysis of their financial situation. The court has full discretionary authority to force the primary income earner to pay or in the case of duel income households, to continue to contribute his share to the marital monthly expenses and pay for the dependent spouse’s attorney fees for the cost of the motion. The court may also order the use of bank accounts or the selling of marital assets which can later be charged against the husband during the final distribution of assets between the couple to maintain the status quo.
The result, award of Pendente Lite support is that most in not all of the normal marital monthly expenses are paid by the primary income earner and his post separation expenses are not fully taken into consideration. This rebalancing of monthly income and liabilities, may place the primary incomer earner is worst financial circumstances than prior to leaving the marriage and marital residence.
A better solution would be for the divorcing couple to come to terms that a separation is eminent and rationally prepare for its financial aftermath. Open and frank discussions, if possible would potentially alleviate the aftershock of the primary income earner learning that he may not have sufficient monthly income to pay for the two residences. It would also benefit the remaining spouse by hopefully reducing some of the stress and fear of the unknown. Divorce mediation would be quite helpful in this situation. A divorce mediator can assist the couple in the realization of the limited funds, offer options after identifying and discussing the couple’s concerns and prepare a separation agreement which address those concerns and detail the couple’s respective responsibilities.
Once an interim separation agreement is in place, a certain trust usually ensues between the couple. Then the couple through the divorce mediator can commence discussions on their long term plans for asset and liability distribution, spousal support, child support, visitation issues and the handling of tax consequences. The divorcing couple through proper planning and the use of an experienced divorce mediator can save thousands of dollars in legal and court cost fees, as well as heal quicker than if they allow emotional and reactive impulses to take control.
Sunday, July 26, 2009
Marital Settlement Agreements
The New Jersey court was recently asked to decide whether a document between a divorcing couple hand written by a mediator, initialed as to each paragraph by the couple but not signed was a valid agreement for purposes of a marital settlement agreement. The appellate court answered in the affirmative.
In the case of Hasty vs. Hasty, the couple both tenured professors at Ivy League universities voluntarily decided to attend a mediation session accompanied by their respective attorneys. At the conclusion of a four hour mediation session, the mediator who was a retired superior court judge in private practice, prepared a handwritten three page document entitled, “Hasty Agreement.” The document clearly detailed in nine paragraphs the separation and division of the couple’s assets and liabilities; the distribution of furniture and the waiver of alimony. The couple initialed each paragraph of the document.
Subsequently, one of the attorneys prepared a more detailed marital settlement agreement containing additional boilerplate clauses which wasn’t accepted by the husband. The wife thereafter filed the divorce complaint and requested the court to honor the mediation document. The husband asserted in his affidavit that he wasn’t aware that the mediation document was a valid settlement agreement and sought to have the document disregarded by the court.
However, the court rejected the husband’s assertions and found that the mediation document was a binding agreement between the couple because it was initialed by both as to each paragraph and the document was labeled an agreement. The absence of signatures was not considered a fatal flaw in the agreement. The court reasoned that even oral agreements are binding on individuals if there was intent by the individuals to be bound. The court determined that the document raised and resolved all the major issues between the couple in comprehensive terms. Furthermore, the court noted that the husband for several months after the mediation meeting complied with the terms and actions required of him by the agreement.
In divorce mediation, a couple through the assistance of a skilled divorce mediator attempts to agree on the various issues affecting them such as, alimony, allocation of assets and liabilities, child custody and visitation. At the conclusion of the mediation sessions the divorce mediator would prepare a settlement agreement, usually a Memorandum of Understanding or (some mediators will prepare) a Marital Settlement Agreement. Usually, the prepared document is presented to the divorcing couple for their and if they choose their attorney’s review. Thereafter, if no revisions are required, the divorcing couple would sign the agreement and have it filed with the court. In the Hasty’s case, it is unclear why the retired judge in private practice would have the couple initial each paragraph yet omit signatures. Nor is it clear why there wasn't additional verbiage in the agreement detailing the couple's voluntary concurrence of the terms and in the presence of their attorneys.
In the case of Hasty vs. Hasty, the couple both tenured professors at Ivy League universities voluntarily decided to attend a mediation session accompanied by their respective attorneys. At the conclusion of a four hour mediation session, the mediator who was a retired superior court judge in private practice, prepared a handwritten three page document entitled, “Hasty Agreement.” The document clearly detailed in nine paragraphs the separation and division of the couple’s assets and liabilities; the distribution of furniture and the waiver of alimony. The couple initialed each paragraph of the document.
Subsequently, one of the attorneys prepared a more detailed marital settlement agreement containing additional boilerplate clauses which wasn’t accepted by the husband. The wife thereafter filed the divorce complaint and requested the court to honor the mediation document. The husband asserted in his affidavit that he wasn’t aware that the mediation document was a valid settlement agreement and sought to have the document disregarded by the court.
However, the court rejected the husband’s assertions and found that the mediation document was a binding agreement between the couple because it was initialed by both as to each paragraph and the document was labeled an agreement. The absence of signatures was not considered a fatal flaw in the agreement. The court reasoned that even oral agreements are binding on individuals if there was intent by the individuals to be bound. The court determined that the document raised and resolved all the major issues between the couple in comprehensive terms. Furthermore, the court noted that the husband for several months after the mediation meeting complied with the terms and actions required of him by the agreement.
In divorce mediation, a couple through the assistance of a skilled divorce mediator attempts to agree on the various issues affecting them such as, alimony, allocation of assets and liabilities, child custody and visitation. At the conclusion of the mediation sessions the divorce mediator would prepare a settlement agreement, usually a Memorandum of Understanding or (some mediators will prepare) a Marital Settlement Agreement. Usually, the prepared document is presented to the divorcing couple for their and if they choose their attorney’s review. Thereafter, if no revisions are required, the divorcing couple would sign the agreement and have it filed with the court. In the Hasty’s case, it is unclear why the retired judge in private practice would have the couple initial each paragraph yet omit signatures. Nor is it clear why there wasn't additional verbiage in the agreement detailing the couple's voluntary concurrence of the terms and in the presence of their attorneys.
Monday, July 20, 2009
The Basis for Alimony
A common topic which arises during divorce mediation sessions and divorce support group meetings is the nature of alimony. Those individuals which are likely to be the payer don’t feel they deserve the obligation of continued support to the ex-spouse after the marriage ceases, while those individuals who are dependent upon the economically advantaged ex-spouse are adamant in demands for continued support. What I find is that there is a basic misunderstanding as to what is alimony, the different types ascribed by the court and why alimony is awarded. This article will attempt to shed light upon this impassioned topic.
The first step in understanding the concept of alimony is to realize that the New Jersey court system views marriage as a contract and an important social institution. Rather than cite multiple court decisions as would normally be done when writing a brief or other legal document, I will explain the basis for alimony as it developed in New Jersey jurisprudence for the individual who must pay or seeks to receive alimony.
Historically, the NJ court has viewed marriage as a contract which in its basic form is an agreement to bargain for something at a specific price and an acceptance to provide that something at the agreed upon price. In the case of marriage, societal norms developed prior to the right of women to own real property (land). Back at that time, the soon to be wife’s family offered a dowry to the man who would marry her. In consideration of this dowry, the man was expected to support his future wife. During earlier times, marriage was a form of survival as it took at least two people to normally maintain a homestead. The man offered (a term of contract law) or promised to love and keep (support) his wife in consideration for her bearing her husband’s offspring and support his endeavors. Marriage was considered a permanent enterprise when the average lifespan was much shorter than today’s longevity. In addition, in the past society frowned upon the remedy of divorce.
However, life spans increased, women gained the right of land ownership and began to make small but meaningful economic inroads. Then, during the 1940s, women took the men’s place in the factories as men were sent off fighting the Second Great War. During the Eisenhower years, the nuclear family took on new meaning while at the same time; the national highway system expanded the ability of the population to easily transplant itself across state lines. The country became more forward looking and greater expectations of what life offered gained acceptance. During the social revolution of the 1960s, women gained greater equality and the concept of divorce became more acceptable to the nation. No longer were women forced to remain in loveless or violent marriages. As divorces become more common place, the NJ court struggled with the notion of the promises of marriage and support.
Alimony arose as a concept of equity and fairness, if a married woman was deserted by her husband, society demanded that he continued to support her until she was able to support herself or another man voluntarily accepted to take on through remarriage the obligation to support her. Today, the NJ court does not consider who left the marriage as a basis for granting or denying alimony, but rather undertakes a review of the particular case facts and the thirteen statutory factors as enumerated in N.J.S.A. 2A:34-23(b). Thereupon, a finding that one spouse has an economic advantage over the other; the NJ court can award alimony to the dependent spouse. The 13 statutory factors that the NJ court must apply to each case are:
(1) The actual need and ability of the parties to pay;
(2) The duration of the marriage;
(3) The age, physical and emotional health of the parties;
(4) The standard of living established during the marriage and the likelihood that each party can maintain a reasonably comparable standard of living;
(5) The earning capacities, education 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 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, direct or indirect, 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.
Implicit in the vow of matrimony or contract of marriage is conformity to state law. As New Jersey residents, a married couple who decides to divorce will be subject to the alimony statute, as well as prior case law. In reviewing the particular divorce case, the NJ court would conduct an analysis of the divorcing couple’s finances, standard of living and other statutory considerations. If the NJ court found that there was cause to award alimony, the next phase of analysis would be to determine what type of alimony. In New Jersey, there are four types of alimony that the court can award. They are permanent, limited duration, rehabilitative and reimbursement alimony.
Permanent alimony is awarded by the NJ court only after careful analysis of the statute’s 13 factors. Generally, permanent alimony is awarded when the marriage has been of a sufficiently long duration and the dependent spouse can’t support herself. However, there is no defined numerical threshold which defines the long term marriage. The NJ court has in cases awarded permanent alimony in marriages over ten years, yet in other cases, opined that marriages of twelve years were of intermediate length. The awarding of permanent alimony is very fact case sensitive. The spouse seeking permanent alimony has the burden to prove that such an award is warranted. The length of the marriage is only one consideration. Other factors such as the dependent spouse’s age, health, education and employability is also weighed in the determination. As an example, a 54 year old, dependent spouse who was a homemaker, raised the children during the marriage and has few employment options will likely meet the burden with ease.
Once the NJ court determines that permanent alimony is warranted, the next part of the analysis is what the fair amount of the alimony obligation should be. Again, the NJ court has not articulated a precise formula. Rather, the court reviews each case for the earnings and other income available to each spouse. Income derived from investments such as stock dividends, real property rental income, as well as bonuses and regular overtime pay can be included for calculation purposes. If a spouse is not earning at the level he is capable of, the court may impute income to that spouse. Permanent alimony normally ceases when either of the spouses’ dies or when the dependent spouse remarries. The NJ court may also at some future time review the matter if the fortunes of the parties increase or decrease dramatically, the dependent spouse’s cohabitation with another of the opposite sex or other such event which purports a changed circumstance.
Limited duration alimony is awarded in those instances when the marriage’s length and other statutory considerations don’t justify permanent alimony. Limited duration alimony is payment to the dependant spouse for a specific length of time, but less than a lifetime. Again, there isn’t any basic formula listed in the statutes or rules. Each individual case is reviewed by the NJ court and a length of time and amount is fixed. In determining the limited duration alimony’s time length the NJ court would consider the time the dependant spouse would need to improve her financial situation and earning capability.
Rehabilitative alimony is generally awarded when the dependant spouse will re-enter the workforce at some future date after she has been retrained so as to support herself. An example of a case where rehabilitative alimony is awarded is when a dependant spouse will go back to school to receive a degree which in turn makes her more employable at a higher rated position than if she didn’t have the degree. Under the statute, N.J.S.A. 2A:34-23(d), the dependant spouse would have to show the NJ court the various steps and time limit needed to achieve the objective of rehabilitation. This form of alimony differs from limited duration alimony in that rehabilitation seeks to attain the dependant spouse’s self sufficiency. However, it must be noted that the NJ court can and has awarded rehabilitative alimony together with permanent alimony in many cases. At first, it may appear that there is a contradiction in the logic of awarding rehabilitative alimony to make the dependant spouse self sufficient and also award permanent alimony. But in those divorce cases where the rehabilitative alimony increases the employability of the dependant spouse but still fails to allow for self sufficiently, a small sum of permanent alimony would be acceptable.
The final type of alimony in which the NJ court can award is reimbursement alimony. This type of alimony is awarded to the supporting spouse for her contribution towards the other spouse’s professional training. A supporting spouse who assisted in the household expenses and or contributed to the other spouse’s academic costs can be entitled to get repaid for the amounts she contributed. However, being reimbursed does not preclude her from being awarded additional alimony such as permanent or limited duration alimony.
Couples who are contemplating divorce and will likely have an alimony claim before the NJ court may consider leaving their economic future to a judge to be extremely frightening. The better approach would be divorce mediation with a highly skilled divorce mediator such as Nicholas De Metro of Montclair Divorce Mediation, who will closely work with the divorcing couple to achieve a fair and reasonable agreement. A settlement of their alimony issue which takes each individual’s immediate and long term concerns into consideration and allows both of them to move forward knowing that they kept control of their future.
The first step in understanding the concept of alimony is to realize that the New Jersey court system views marriage as a contract and an important social institution. Rather than cite multiple court decisions as would normally be done when writing a brief or other legal document, I will explain the basis for alimony as it developed in New Jersey jurisprudence for the individual who must pay or seeks to receive alimony.
Historically, the NJ court has viewed marriage as a contract which in its basic form is an agreement to bargain for something at a specific price and an acceptance to provide that something at the agreed upon price. In the case of marriage, societal norms developed prior to the right of women to own real property (land). Back at that time, the soon to be wife’s family offered a dowry to the man who would marry her. In consideration of this dowry, the man was expected to support his future wife. During earlier times, marriage was a form of survival as it took at least two people to normally maintain a homestead. The man offered (a term of contract law) or promised to love and keep (support) his wife in consideration for her bearing her husband’s offspring and support his endeavors. Marriage was considered a permanent enterprise when the average lifespan was much shorter than today’s longevity. In addition, in the past society frowned upon the remedy of divorce.
However, life spans increased, women gained the right of land ownership and began to make small but meaningful economic inroads. Then, during the 1940s, women took the men’s place in the factories as men were sent off fighting the Second Great War. During the Eisenhower years, the nuclear family took on new meaning while at the same time; the national highway system expanded the ability of the population to easily transplant itself across state lines. The country became more forward looking and greater expectations of what life offered gained acceptance. During the social revolution of the 1960s, women gained greater equality and the concept of divorce became more acceptable to the nation. No longer were women forced to remain in loveless or violent marriages. As divorces become more common place, the NJ court struggled with the notion of the promises of marriage and support.
Alimony arose as a concept of equity and fairness, if a married woman was deserted by her husband, society demanded that he continued to support her until she was able to support herself or another man voluntarily accepted to take on through remarriage the obligation to support her. Today, the NJ court does not consider who left the marriage as a basis for granting or denying alimony, but rather undertakes a review of the particular case facts and the thirteen statutory factors as enumerated in N.J.S.A. 2A:34-23(b). Thereupon, a finding that one spouse has an economic advantage over the other; the NJ court can award alimony to the dependent spouse. The 13 statutory factors that the NJ court must apply to each case are:
(1) The actual need and ability of the parties to pay;
(2) The duration of the marriage;
(3) The age, physical and emotional health of the parties;
(4) The standard of living established during the marriage and the likelihood that each party can maintain a reasonably comparable standard of living;
(5) The earning capacities, education 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 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, direct or indirect, 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.
Implicit in the vow of matrimony or contract of marriage is conformity to state law. As New Jersey residents, a married couple who decides to divorce will be subject to the alimony statute, as well as prior case law. In reviewing the particular divorce case, the NJ court would conduct an analysis of the divorcing couple’s finances, standard of living and other statutory considerations. If the NJ court found that there was cause to award alimony, the next phase of analysis would be to determine what type of alimony. In New Jersey, there are four types of alimony that the court can award. They are permanent, limited duration, rehabilitative and reimbursement alimony.
Permanent alimony is awarded by the NJ court only after careful analysis of the statute’s 13 factors. Generally, permanent alimony is awarded when the marriage has been of a sufficiently long duration and the dependent spouse can’t support herself. However, there is no defined numerical threshold which defines the long term marriage. The NJ court has in cases awarded permanent alimony in marriages over ten years, yet in other cases, opined that marriages of twelve years were of intermediate length. The awarding of permanent alimony is very fact case sensitive. The spouse seeking permanent alimony has the burden to prove that such an award is warranted. The length of the marriage is only one consideration. Other factors such as the dependent spouse’s age, health, education and employability is also weighed in the determination. As an example, a 54 year old, dependent spouse who was a homemaker, raised the children during the marriage and has few employment options will likely meet the burden with ease.
Once the NJ court determines that permanent alimony is warranted, the next part of the analysis is what the fair amount of the alimony obligation should be. Again, the NJ court has not articulated a precise formula. Rather, the court reviews each case for the earnings and other income available to each spouse. Income derived from investments such as stock dividends, real property rental income, as well as bonuses and regular overtime pay can be included for calculation purposes. If a spouse is not earning at the level he is capable of, the court may impute income to that spouse. Permanent alimony normally ceases when either of the spouses’ dies or when the dependent spouse remarries. The NJ court may also at some future time review the matter if the fortunes of the parties increase or decrease dramatically, the dependent spouse’s cohabitation with another of the opposite sex or other such event which purports a changed circumstance.
Limited duration alimony is awarded in those instances when the marriage’s length and other statutory considerations don’t justify permanent alimony. Limited duration alimony is payment to the dependant spouse for a specific length of time, but less than a lifetime. Again, there isn’t any basic formula listed in the statutes or rules. Each individual case is reviewed by the NJ court and a length of time and amount is fixed. In determining the limited duration alimony’s time length the NJ court would consider the time the dependant spouse would need to improve her financial situation and earning capability.
Rehabilitative alimony is generally awarded when the dependant spouse will re-enter the workforce at some future date after she has been retrained so as to support herself. An example of a case where rehabilitative alimony is awarded is when a dependant spouse will go back to school to receive a degree which in turn makes her more employable at a higher rated position than if she didn’t have the degree. Under the statute, N.J.S.A. 2A:34-23(d), the dependant spouse would have to show the NJ court the various steps and time limit needed to achieve the objective of rehabilitation. This form of alimony differs from limited duration alimony in that rehabilitation seeks to attain the dependant spouse’s self sufficiency. However, it must be noted that the NJ court can and has awarded rehabilitative alimony together with permanent alimony in many cases. At first, it may appear that there is a contradiction in the logic of awarding rehabilitative alimony to make the dependant spouse self sufficient and also award permanent alimony. But in those divorce cases where the rehabilitative alimony increases the employability of the dependant spouse but still fails to allow for self sufficiently, a small sum of permanent alimony would be acceptable.
The final type of alimony in which the NJ court can award is reimbursement alimony. This type of alimony is awarded to the supporting spouse for her contribution towards the other spouse’s professional training. A supporting spouse who assisted in the household expenses and or contributed to the other spouse’s academic costs can be entitled to get repaid for the amounts she contributed. However, being reimbursed does not preclude her from being awarded additional alimony such as permanent or limited duration alimony.
Couples who are contemplating divorce and will likely have an alimony claim before the NJ court may consider leaving their economic future to a judge to be extremely frightening. The better approach would be divorce mediation with a highly skilled divorce mediator such as Nicholas De Metro of Montclair Divorce Mediation, who will closely work with the divorcing couple to achieve a fair and reasonable agreement. A settlement of their alimony issue which takes each individual’s immediate and long term concerns into consideration and allows both of them to move forward knowing that they kept control of their future.
Monday, July 13, 2009
Disability Insurance in Divorce Agreements
In divorce proceedings and negotiations, if permanent or limited duration alimony, as well as child support is a component of the possible settlement agreement, life insurance for the benefit of the dependent spouse and children is a consideration and usually made part of the paying spouse’s continued obligation. In fact, the New Jersey Legislature has specifically allowed for life insurance to be ordered by the judge to protect the dependent spouse in case of premature death of the payer spouse under N.J.S.A. 2A:35-25. The theory behind this additional insurance premium burden upon the payer spouse is that the untimely death of the payer spouse should not become the burden of society to support the dependent spouse and children. However, there are no requirements regarding disability insurance in divorce settlements. A payer spouse is not under any obligation to obtain and maintain a disability insurance policy for the benefit of the dependant spouse or children. However, NJ Family Law & Divorce Mediation strongly encouages inclusion of disability insurance as part of an overall divorce settlement.
Disability insurance is a voluntary insurance policy which pays monthly benefits to the insured if he or she becomes disabled by a covered risk and will still pay only a portion of the injured spouse’s gross employment earnings. We’re all familiar with the commercial of the quacking duck exclaiming AFLAC to all that would listen, yet most people don’t have disability insurance. Those few who have coverage seem to acquire it through their employers. Since the legislature failed to include provisions for disability insurance protection for the dependant spouse and there are no New Jersey divorce court cases which deal squarely with this issue, NJ divorce attorneys representing payer spouses generally do not allow a disability insurance provision to be included in the divorce settlement agreement. The failure of NJ divorce attorneys to look long term for their clients real needs may be a detriment to their clients.
The consequences of not having a disability insurance policy in place on the payer spouse could cause severe economic hardship to both spouses and their children. Generally, when an individual becomes disabled because of a non work related injury such as by a medical condition; heart attack, stroke, cancer to name a few disabling illnesses, the payer spouse’s recourse is to seek Social Security disability benefits. These benefits only provide for a small fraction of the payer spouse’s prior employment income. The reduced funds available to the payer and dependent spouse are further burdened by the likelihood of increased medical bills.
Insurance is always a gamble. Premiums are paid for coverage for a possible future occurrence. In some instances, government requires us to purchase certain types of insurance such as liability coverage on our automobiles in case we damage property or inflict injury upon someone. In other matters, our mortgage lender requires fire and casualty homeowner’s insurance should the house catch fire or is damaged by harsh winds. With the long term view toward protection and stability, divorcing couples and their respective attorneys should seriously consider the possibility that the payer spouse may become disabled during the alimony and child support obligation periods.
Although a payer spouse may be reluctant to pay additional insurance premiums for the benefit of his ex-spouse, there is a strong possibility that the payer spouse would look more favorability to providing protection and stability to the children and himself. Disability insurance is affordable and can be obtained in different coverage amounts, such as the amount equal to the cost of the monthly child support payment or just the cost of the monthly alimony obligation. Disability insurance must be a topic for discussion during the active divorce settlement talks so that the divorcing couple may fully understand the possible future scenarios which can adversely affect them. At Montclair Divorce Mediation, the discussion of disability insurance for the protection of the family is part of the framework for divorcing clients to consider incorporating into their divorce agreement.
Disability insurance is a voluntary insurance policy which pays monthly benefits to the insured if he or she becomes disabled by a covered risk and will still pay only a portion of the injured spouse’s gross employment earnings. We’re all familiar with the commercial of the quacking duck exclaiming AFLAC to all that would listen, yet most people don’t have disability insurance. Those few who have coverage seem to acquire it through their employers. Since the legislature failed to include provisions for disability insurance protection for the dependant spouse and there are no New Jersey divorce court cases which deal squarely with this issue, NJ divorce attorneys representing payer spouses generally do not allow a disability insurance provision to be included in the divorce settlement agreement. The failure of NJ divorce attorneys to look long term for their clients real needs may be a detriment to their clients.
The consequences of not having a disability insurance policy in place on the payer spouse could cause severe economic hardship to both spouses and their children. Generally, when an individual becomes disabled because of a non work related injury such as by a medical condition; heart attack, stroke, cancer to name a few disabling illnesses, the payer spouse’s recourse is to seek Social Security disability benefits. These benefits only provide for a small fraction of the payer spouse’s prior employment income. The reduced funds available to the payer and dependent spouse are further burdened by the likelihood of increased medical bills.
Insurance is always a gamble. Premiums are paid for coverage for a possible future occurrence. In some instances, government requires us to purchase certain types of insurance such as liability coverage on our automobiles in case we damage property or inflict injury upon someone. In other matters, our mortgage lender requires fire and casualty homeowner’s insurance should the house catch fire or is damaged by harsh winds. With the long term view toward protection and stability, divorcing couples and their respective attorneys should seriously consider the possibility that the payer spouse may become disabled during the alimony and child support obligation periods.
Although a payer spouse may be reluctant to pay additional insurance premiums for the benefit of his ex-spouse, there is a strong possibility that the payer spouse would look more favorability to providing protection and stability to the children and himself. Disability insurance is affordable and can be obtained in different coverage amounts, such as the amount equal to the cost of the monthly child support payment or just the cost of the monthly alimony obligation. Disability insurance must be a topic for discussion during the active divorce settlement talks so that the divorcing couple may fully understand the possible future scenarios which can adversely affect them. At Montclair Divorce Mediation, the discussion of disability insurance for the protection of the family is part of the framework for divorcing clients to consider incorporating into their divorce agreement.
Wednesday, July 8, 2009
Is Divorce Mediation the same as Divorce Arbitration?
Most individuals can’t differentiate between divorce mediation and arbitration. Recently, the Star Ledger in its July 2, 2009, front page headline further confused the issue and the general public by stating, “Court OKs Mediation in Custody Disputes”. The article begins declaring that, “Couples getting a divorce can bypass judges and use mediators to determine who gets custody of their children, the state Supreme Court said yesterday.” Actually, the case decided by the court, Fawyz vs. Fawzy, is about the ability of a divorcing couple to utilize an arbitrator to decide custody and visitation rights. The use of divorce mediators by a divorcing couple has been permitted prior to this case.
While NJ Family Law & Divorce Mediation is obviously concerned with New Jersey families, divorce mediation is a universal process of a neutral third person who works with and engages the couple to talk to each other so that a compromised settlement can be achieved. The skilled divorce mediator assists the couple in identifying the issues, possible solutions and facilitates discussion regarding assets, liabilities, alimony, child support, custody and co-parenting. In mediation, the couple maintains control over their future. A divorce mediator does not decide the issues for the couple. Divorce arbitration, by contrast is a process similar to a trial. The arbitrator takes the place of a judge hearing witnesses testify and reviewing submitted evidence. At the conclusion, the arbitrator decides the case. In divorce arbitration, the divorcing couple loses control of their future as a third person decides the issues for them.
In the Fawyz case, the couple could not agree on custody or visitation schedules. The case was lingering in the court system for 17 months before it came before the judge for trial. However, on the trial date, there were some scheduling conflicts and as a result, the couple and their attorneys informed the judge that they agreed instead to divorce arbitration. After a divorce arbitrator was selected and the arbitration commenced, the husband sought to stop the arbitration process. His initial attempt to forestall a divorce arbitration decision failed. The divorce arbitrator subsequently ruled in favor of the mother awarding her as the residential custodial parent with joint legal custody. Again, the husband sought the court to nullify the divorce arbitration. Additional litigation ensued through two additional appeals. Approximately three and one half years after the divorce litigation commenced, the court rendered its verdict. The Supreme Court opined that the husband did not realize when he agreed to arbitrate that he was giving up his right for a trial. The court indicated that since the decision to arbitrate was not reduced to writing and certain safeguards were not in place, the divorce arbitrator’s decision was invalid. The case was then sent back to the trial court to decide anew on the custody and visitation issues.
Divorce mediation is by far the better approach and costs less than divorce arbitration. In addition, the most important aspect is that the couple doesn’t relinquish control. An agreement reached through divorce mediation is far less likely than an arbitration award to be appealed.
While NJ Family Law & Divorce Mediation is obviously concerned with New Jersey families, divorce mediation is a universal process of a neutral third person who works with and engages the couple to talk to each other so that a compromised settlement can be achieved. The skilled divorce mediator assists the couple in identifying the issues, possible solutions and facilitates discussion regarding assets, liabilities, alimony, child support, custody and co-parenting. In mediation, the couple maintains control over their future. A divorce mediator does not decide the issues for the couple. Divorce arbitration, by contrast is a process similar to a trial. The arbitrator takes the place of a judge hearing witnesses testify and reviewing submitted evidence. At the conclusion, the arbitrator decides the case. In divorce arbitration, the divorcing couple loses control of their future as a third person decides the issues for them.
In the Fawyz case, the couple could not agree on custody or visitation schedules. The case was lingering in the court system for 17 months before it came before the judge for trial. However, on the trial date, there were some scheduling conflicts and as a result, the couple and their attorneys informed the judge that they agreed instead to divorce arbitration. After a divorce arbitrator was selected and the arbitration commenced, the husband sought to stop the arbitration process. His initial attempt to forestall a divorce arbitration decision failed. The divorce arbitrator subsequently ruled in favor of the mother awarding her as the residential custodial parent with joint legal custody. Again, the husband sought the court to nullify the divorce arbitration. Additional litigation ensued through two additional appeals. Approximately three and one half years after the divorce litigation commenced, the court rendered its verdict. The Supreme Court opined that the husband did not realize when he agreed to arbitrate that he was giving up his right for a trial. The court indicated that since the decision to arbitrate was not reduced to writing and certain safeguards were not in place, the divorce arbitrator’s decision was invalid. The case was then sent back to the trial court to decide anew on the custody and visitation issues.
Divorce mediation is by far the better approach and costs less than divorce arbitration. In addition, the most important aspect is that the couple doesn’t relinquish control. An agreement reached through divorce mediation is far less likely than an arbitration award to be appealed.
Friday, June 26, 2009
After a Divorce Who Claims the Child as a Tax Exemption?
The appellate court in today's divorce decision of Canavan, Jr. vs. Canavan, restated two known maxims that every divorce lawyer and their client better remember: read the fine print and know the law. In the case of Michael and Elisabeth Canavan, Jr., the couple had a five year old daughter when they divorced in 2007. As part of their divorce settlement agreement, the child was to reside with her mother, Elisabeth. The parties could not agree on who was going to claim the child as a tax exemption so the issue was not addressed in their Property Settlement Agreement and final divorce judgment. Within a year of the divorce, the father went back to court to be able to claim the child as an exemption in alternating years. The trial court initially agreed with the father, then thereafter, reconsidered and sided with the mother. An appeal was filed and the appellate court reviewed the applicable divorce law and divorce settlement agreement. The court first identified that the IRS Code grants the custodial parent the exemption unless that parent waives the exemption. In this case, Elisabeth being the custodial parent never waived the exemption. The court then reviewed the couple's multi-page divorce settlement agreement which contained the clause, "no issues were unresolved in this matter and all issues pleaded and not proven are deemed abandoned." As a result of not resolving the issue and the insertion of this clause, Michael, the father, was thereafter precluded from seeking the exemption. The moral of the story, resolve all the issues before signing the agreement and always read the fine print. At Montclair Divorce Mediation, we ensure that the divorcing couple reads and understands the full divorce settlement agreement.
Thursday, June 25, 2009
Pets & Divorce
Who gets the family pet is an important topic to NJ divorcing couples. Although pet owners develop strong bonds with their pets, referring to them as their “babies”, N.J. judges are reluctant to deal with the custody of the pets. Often, judges felt it was a waste of court time and would not entertain the notion of hearing arguments of who better cared for the family dog. NJ Courts have traditionally considered pets as property and as such, they were only worth the value of economic replacement, similar to replacing a television or other object. However, in a divorce decision this year, the appellate court while still considering a pet as property likened the family dog to possible family heirloom status, whereby money can’t replace the full sentimental value attached to the pet. What this means is that the trial court will now have to deal with the family pet issue, but divorcing couples should not expect the court to consider custody issues. Rather, the NJ divorce court may value the pet greater than its simple economic value or force one person to give up the pet if the couple had a prior agreement. Couples can amicably resolve the pet issue along with other issues by divorce mediation rather than costly divorce litigation. At Montclair Divorce Mediation, couples discuss the various aspects of whether joint shared pet custody is best for them, the specific time sharing arrangements and costs are then incorporated into their divorce settlement agreement. The more that couples can agree on outside of court, the better it is for them and their family.
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