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.

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.