Financial Issues in Divorce in New Jersey
© 2010 Fox Rothschild
Financial Issues in Divorce
in New Jersey
December 7, 2010
Presented by
Eric S. Solotoff, Esq.
Sandra C. Fava, Esq.
Financial Issues in Divorce in New Jersey
© 2010 Fox Rothschild
Child Support
Guidelines
WORKS ON INCOME SHARES APPROACH –
PERCENTAGE OF NET INCOME
GUIDELINES ARE PRESUMPTIVE CHILD
SUPPORT FOR ALL CASES WHERE
COMBINED NET INCOME IS $187,200 OR
LESS
TAX TABLES IN GUIDELINES OR IRS
CIRCULAR E - MAY NOT BE ACCURATE
Financial Issues in Divorce in New Jersey
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Child Support
Guidelines - continued
CREDIT GIVEN FOR OVERNIGHTS –USE A SHARED WORKSHEET WHEN MORE THAN 28% OF OVERNIGHTS (104)
DON‟T USE GUIDELINES FOR COLLEGE EXCEPT WHEN CHILD LIVES AT HOME
COURT CAN DEVIATE BUT IT IS RARE
Financial Issues in Divorce in New Jersey
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Child Support
Guidelines continued
GOES UP TO 6 KIDS
AT HIGHEST LEVEL
- 1 KID IS $453/WEEK
- 2 KIDS IS $606
- 3 KIDS IS $658
- 4 KIDS IS $733
- 5 KIDS IS $806
- 6 KIDS IS $877
Financial Issues in Divorce in New Jersey
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Child Support
Over Guidelines Cases
IN OVER GUIDELINES CASE –
GUIDELINES IS PRESUMPTIVE
MINIMUM, THEN ADD TO IT BASED ON
KIDS NEEDS
COURT CANNOT EXTRAPOLATE
FROM THE GUIDELINES
MUST LOOK TO THE STATUTE
Financial Issues in Divorce in New Jersey
© 2010 Fox Rothschild
Child Support
StatuteIn determining the amount to be paid by a parent for support of the child and the period
during which the duty of support is owed, the court in those cases not governed by court rule shall consider, but not be limited to, the following factors:
(1) the needs of the child;
(2) the standard of living and economic circumstances of each parent;
(3) all sources of income and assets of each parent;
(4) earning ability of each parent, including educational background, training, employment skills, work experience, custodial responsibility for children including the cost of providing child care and the length of time and cost of each parent to obtain training or experience for appropriate employment;
(5) need and capacity of the child for education, including higher education;
(6) age and health of the child and each parent;
(7) income, assets and earning ability of the child;
(8) responsibility of the parents for the court-ordered support of others;
(9) reasonable debts and liabilities of each child and parent; and
(10) any other factors the court may deem relevant.
Financial Issues in Divorce in New Jersey
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Child Support
Over Guidelines Cases continued CHILDREN ARE ENTITLED TO SHARE IN THEIR
PARENTS INCREASED GOOD FORTUNE, EVEN IF IT EXCEEDS THE MARITAL LIFESTYLE
IF THERE IS AN INCIDENTAL BENEFIT TO THE CUSTODIAL PARENT, THE COURT IS NOT OFFENDED – BUT NO WINDFALL TO OTHER PARENT OR CHILD
MUST CREATE A REALISTIC BUDGET FOR KIDS OR WHAT THEY WOULD DO IF THEY HAD THE EXTRA SUPPORT
Financial Issues in Divorce in New Jersey
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Child Support
Over Guidelines Cases continued
Judges must be vigilant in providing for “needs”
consistent with lifestyle without overindulgence.
As one court observed in dealing with high
income support, “[p]ractitioners dealing with
situations such as this sometimes refer to the
„Three Pony Rule.‟ That is, no child, no matter
how wealthy the parents, needs to be provided
more than three ponies.” - From Isaacson v. Isaacson – citing a Kansas Case
Financial Issues in Divorce in New Jersey
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Child Support
Over Guidelines Cases continued
While “some incidental benefit” is not
offensive, “overreaching in the name of
benefiting a child is.” “[A] custodial parent
cannot[,] through the guise of the incidental
benefits of child support[,] gain a benefit
beyond that which is merely incidental to a
benefit being conferred on the child.” - From Strahan v. Strahan
Financial Issues in Divorce in New Jersey
© 2010 Fox Rothschild
Child Support
Over Guidelines Cases continued This latter consideration involves a careful
balancing of interests reflecting that a child's entitlement to share in a parent's good fortune does not deprive either parent of the right to participate in the development of an appropriate value system for a child. This is a critical tension that may develop between competing parents. Ultimately, the needs of a child in such circumstances also calls to the fore the best interests of a child. - From Strahan v. Strahan
Financial Issues in Divorce in New Jersey
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Alimony
Statutory Factors (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 in the marriage 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;
Financial Issues in Divorce in New Jersey
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Alimony
Statutory Factors - continued (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, 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.
When a share of a retirement benefit is treated as an asset for purposes of equitable distribution, the court shall not consider income generated thereafter by that share for purposes of determining alimony.
Financial Issues in Divorce in New Jersey
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Types of Alimony
PERMANENT
- COURT MUST RULE PERMANENT OUT FIRST BEFORE CONSIDERING OTHER TYPES OF ALIMONY
LIMITED DURATION
REHABILITATIVE
REIMBURSEMENT
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Alimony
Lifestyle IN 2000, A CASE CALLED CREWS v. CREWS ELEVATES LIFESTYLE TO A
SUPER FACTOR
“Some studies have concluded that the standard of living for a woman decreases 30% after a divorce, while men enjoy a 10% increase in living standards on average. See Peterson, A Revolution of the Economic Consequences of Divorce 61 Am. Soc. Rev. 528 (1996); Duncan &
Hoffman, A Reconsideration of the Economic Consequences of Divorce, 22 Demography 485 (1985); Weiss, The Impact of Marital Dissolution on Income and Consumption in Single-Parent Households, 46 J. Marriage & Family 115 (1984). Those statistics are troubling.”
IDENTIFYING THE MARITAL STANDARD OF LIVING AT THE TIME OF THE ORIGINAL DIVORCE DECREE IS CRITICAL TO ANY SUBSEQUENT ASSESSMENT OF CHANGED CIRCUMSTANCES WHEN AN ADJUSTMENT TO ALIMONY IS SOUGHT
CREWS CAUSED AN UPROAR BECAUSE PEOPLE NEVER AGREED ON LIFESTYLE
LEAD TO USE OF LIFESTYLE ANALYSES
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Alimony
Lifestyle – continued
DOES LIFESTYLE = NET INCOME
- YOU EITHER SPEND IT OR SAVE IT
- WHAT IS A NON-RECURRING EXPENSE
- WHO GETS THE MONEY
- PROPER PREPARATION OF A CIS –CAPTURE ALL NET INCOME PLUS USE OF DEBT
- BATTLE OVER SAVINGS COMPONENT
Financial Issues in Divorce in New Jersey
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Alimony
Rule of Thumb
- THE DIRTY LITTLE SECRET IN THE FAMILY COURT
- PROVIDES A STARTING POINT FOR CONSIDERATION OF “THE BALL PARK”
- DIFFERENT IN NORTH AND SOUTH JERSEY
- IS IT FAIR IN CASES OF EXTRAORDINARY INCOME?
Financial Issues in Divorce in New Jersey
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Alimony
Miscellaneous
NON-TAXABLE ALIMONY IS AN
OPTION
- WHY/WHEN DO YOU USE IT
DON‟T FORGET RECAPTURE
NEW YORK NOW HAS A FORMULA
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Equitable Distribution
Statutory Factors The factors are similar to alimony factors:
a. The duration of the marriage;
b. The age and physical and emotional health of the parties;
c. The income or property brought to the marriage by each party;
d. The standard of living established during the marriage;
e. Any written agreement made by the parties before or during the marriage concerning an arrangement of property distribution;
f. The economic circumstances of each party at the time the division of property becomes effective;
g. The income and earning capacity of each party, including educational background, training, employment skills, work experience, length of absence from the job market, custodial responsibilities for children, and the time and expense necessary to acquire sufficient education or training to enable the party to become self-supporting at a standard of living reasonably comparable to that enjoyed during the marriage;
Financial Issues in Divorce in New Jersey
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Equitable Distribution
Statutory Factors – Continued h. The contribution by each party to the education, training or earning power of
the other;
i. The contribution of each party to the acquisition, dissipation, preservation, depreciation or appreciation in the amount or value of the marital property, as well as the contribution of a party as a homemaker;
j. The tax consequences of the proposed distribution to each party;
k. The present value of the property;
l. The need of a parent who has physical custody of a child to own or occupy the marital residence and to use or own the household effects;
m. The debts and liabilities of the parties;
n. The need for creation, now or in the future, of a trust fund to secure reasonably foreseeable medical or educational costs for a spouse or children;
o. The extent to which a party deferred achieving their career goals; and
p. Any other factors which the court may deem relevant.
Financial Issues in Divorce in New Jersey
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Equitable Distribution
Considerations
MOST ASSETS GO 50-50
- WHY?
- IS IT WORTH THE FIGHT?
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Equitable Distribution
Considerations - continued
BUSINESSES USUALLY NOT 50-50- WHY
ONE REASON – HYPOTHETICAL TAX CONSEQUENCES NOT CONSIDERED TO REDUCE VALUE BUT COULD BE CONSIDERED FOR DETERMINING PERCENTAGE DISTRIBUTION – ORGLER CASE
NOTION OF REWARDING PERSON FOR THEIR EFFORT– IS THIS FAIR?
Financial Issues in Divorce in New Jersey
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Equitable Distribution
Considerations - continued
ORGLER SHOULD SEEMINGLY APPLY TO ALL ASSETS - DOESN‟T USUALLY HAPPEN IN REAL
WORLD EXCEPT FOR OFFSETTING OF RETIREMENT ASSETS AGAINST ASSETS THAT ARE NOT TAX DEFERRED
HYPOTHETICAL: BROKER‟S COMMISSION NOT CONSIDERED -WADLOW
Financial Issues in Divorce in New Jersey
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Equitable Distribution
Considerations - continued
WHAT ASSETS ARE EXEMPT?
COMMINGLING- PREMARITAL
- GIFTS/INHERITANCES FROM THIRD PARTIES DURING MARRIAGE
PARTY WHO CLAIMS EXEMPTION HAS BURDEN OF PROOF
MARITAL HOME OFTEN TREATED DIFFERENTLY THOUGH IT SHOULD NOT BE
Financial Issues in Divorce in New Jersey
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Equitable Distribution
Considerations - continued
THE ENGAGEMENT RING – A
CONDITIONAL GIFT
CUT OFF DATE
ACTIVE/PASSIVE
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THE IMPACT OF FAMILY TRUSTS
DO TRUSTS PROVIDE ADEQUATE
PROTECTION?
- TANNEN CASE – WE SHALL SEE WHAT THE NJ SUPREME COURT SAYS
- CAN INCOME BE CONSIDERED?
- CAN A TRUST BE COMPELLED TO MAKE DISTRIBUTIONS?
Financial Issues in Divorce in New Jersey
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CIS and Discovery
Case Information Statement (CIS)
CIS IS PROBABLY MOST IMPORTANT DOCUMENT IN A DIVORCE CASE
CERTAIN FAMILY AND BIOGRAPHICAL INFO
PROVIDE, UNDER OATH, YOUR INCOME IN MANY DIFFERENT WAYS- LAST YEAR
- LAST 3 PAY PERIODS
- YEAR TO DATE – EARNED AND UNEARNED
ASSETS AND LIABILITIES
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CIS & Discovery - continued
MOST IMPORTANT – ESPECIALLY FOR TEMPORARY SUPPORT AND ALIMONY – MONTHLY BUDGET- GOAL – GET THE NET INCOME AND BUDGET TO MATCH- IF THEY DON‟T MATCH – WHY???
IF SPENDING EXCEEDS INCOME, IS THERE DEBT, DEPLETION OF ASSETS OR OTHER REASON TO EXPLAIN IT
IF BUDGET IS LESS THAN NET INCOME – SOMETHING IS WRONG
BECAUSE THIS IS SO IMPORTANT, IT IS HELPFUL FOR AN ACCOUNTANT TO GET INVOLVED EARLY
ESPECIALLY SO IN NY FOR NET WORTH STATEMENT
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CIS & Discovery - continued
TYPICAL DIVORCE DISCOVERY
MANY METHODS- INTERROGATORIES- NOTICE TO PRODUCE- DEPOSITIONS- REQUESTS FOR ADMISSIONS
FORMS OF TYPICAL INTERROGATORIES AND DOCUMENT REQUEST IN MATERIALS
- TYPICALLY SEEK 5 YEARS OF FINANCIAL RECORDS TAX RETURNS AND OTHER INCOME INFO BANK RECORDS CREDIT CARD RECORDS INVESTMENT RECORDS RETIREMENT ASSETS STOCK OPTIONS/BENEFITS BUSINESS RECORDS/PARTNERSHIP INFO. ETC.
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CIS & Discovery - continued
WHY DO WE WANT THIS INFORMATION?
-TRYING TO MAKE SURE WE KNOW ALL OF THE ASSETS THAT THERE WERE AND ARE
-LIFESTYLE
-ARE ALL ASSETS ACCOUNTED FOR
-IS ALL INCOME ACCOUNTED FOR
-ANY DIVORCE PLANNING, UNUSUAL SPENDING, PURCHASES FOR NO MARITAL PURPOSE
-MALPRACTICE
Financial Issues in Divorce in New Jersey
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Business Valuation
TYPICAL DOCUMENT REQUEST
Articles of Incorporation, corporate by-laws, partnership or LLC agreements
List of owners, percentages of ownership and curriculum vitas
Minutes of governing board meetings
Managerial organization chart and operation flowchart
Annual financial statements for the calendar years December 31, ____ through ____.
Interim balance sheet and income statement for the period ending ___________
Strategic Business Plan
Budgets or projections
A list of all affiliates, including a schedule of all related party transactions
All equity buy-out agreements and employment contracts
Legal documents relating to all purchases and sales of equity interest
Copy of any prior valuations of the business or offers to purchase
Employee roster with job description, pay rate and recent W2 compensation ________ to ______
List of contingent liabilities, pending/threatened litigation and related legal documents
Financial Issues in Divorce in New Jersey
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Business Valuation - continued
List of contracts in progress at _______________
Aged accounts receivable as of the valuation date, including any work-in-process not billed
Accounts payable listing as of the valuation date
Schedule of security deposits
Schedule of marketable securities and other investments held in the practice
Schedule of lease and rental payments with applicable agreements held by the practice
Fixed assets depreciation schedules
Schedule of inventories
List of patents, copyrights, trademarks and other intangible assets held by the business or individually
Promissory notes receivable and payable with collateral agreements
Analysis of equity account transactions
Analysis of retained earnings or draw accounts
Insurance policies, including property, casualty, liability, officer’s life, workmen compensation, group health, life and disability
Accountants working trial balances with adjusting entities and supporting schedules
All payroll records including tax returns, W2 statements and 1099 forms
All bank and brokerage account statements with related canceled checks, deposit slips and broker advises for operating accounts and retirement plans.
Atlantic Health correspondence
Original invoices for all expenditures
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Business Valuation – continued
Personal Documents
Personal financial statements prepared and/or issued for any purpose
Income, trust, gift and estate tax returns (federal and state); as well as any amended tax returns
All statements from banks, savings and loans, credit unions, individual retirement, pension, profit sharing, Keogh and brokerage accounts; with checkbooks, canceled checks, deposits slips, and broker advices
All credit card statements and charge slips
Life insurance policies, including cash surrender values and loan information
Health and disability insurance policies
Property insurance policies
Lease agreements
Legal documents evidencing ownership of real estate
Partnership agreements, trust agreements, and related Form K-1s
Documents evidencing ownership of vehicles, boats, jewelry, and other assets
List of safe deposits boxes, their locations, and exact contents at present time
Plan documents, periodic statements, and reports from all benefit plans (i.e., deferred compensation, profit-sharing, pension, 401(k) savings plans, etc.)
Listing of contingent assets and liabilities, including pending or threatened litigation, with related legal documents
All documents related to Internal Revenue Service audits within past 5 years
Case Information Statement
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Business Valuation - continued
REVENUE RULING 59-60- STARTING POINT FOR ALL BUSINESS VALUATIONS- CLASSIC DEFINITION OF FAIR MARKET VALUE – WILLING
BUYER/WILLING SELLER- VALUATION OF SECURITIES IS A PROPHESY AS TO THE
FUTURE BASED UPON THE FACTS KNOWN BUT SUBSEQUENT EVENTS
- FACTORS TO CONSIDER- DISCUSSION OF GOODWILL – TIE TO EARNING CAPACITY- CAP RATES
REVENUE RULE 68-609- FORMULA METHOD – EXCESS EARNINGS- SELDOM USED ANYMORE
Financial Issues in Divorce in New Jersey
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Business Valuation - continued
DUGAN
CASE DECIDED IN 1982 WHEN LAW PRACTICES COULDN‟T BE SOLD
STILL HELD THAT GOODWILL WAS AN INTANGIBLE BUT REAL ASSET WHICH COULD BE QUANTIFIED AND DIVIDED
CONTAINS THE CLASSIC DEFINITION OF GOOD WILL- THE RIGHT TO CONTINUE THE BUSINESS AT THE SAME PLACE IN
WHICH IT HAS BEEN ESTABLISHED AND WHERE ITS REPUTATION HAS BEEN MADE CARRYING THE PROBABILITY THAT OLD CUSTOMERS WILL RETURN
GOODWILL CAN BE TRANSLATED INTO PROSPECTIVE EARNINGS
FUTURE EARNINGS EXCEED NORMAL RETURN ON INVESTMENT
COURT REJECTED 5 TIMES MULTIPLIER IN FAVOR OF 3 TIMES
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Business Valuation - continued
STERN
DECIDED IN 1974 BUT STILL GOOD LAW
PERSONS EARNING CAPACITY IS NOT AN ASSET TO BE DIVIDED –EVEN WHERE IT HAS BEEN AIDED BY THE OTHER SPOUSE
THESE ARE FACTORS IN ALIMONY AND E.D.
STERN IMPORTANT BECAUSE IT ALLOWS THE PARTNERSHIP AGREEMENT FORMULA FOR VALUE TO BE USED AS A PRESUMPTIVE VALUE IF BOOKS ARE WELL KEPT AND VALUE OR PARTNERS INTEREST IS UPDATED AND CAREFULLY REVIEWED
PRACTICALLY- HAS THIS AGREEMENT BEEN USED WHEN OTHER PARTIES DIE OR ARE
BOUGHT OUT
DOES THIS HOLDING SURVIVE AFTER BROWN
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Business Valuation - continued
BROWN v. BROWN
APPELLATE DIVISION CASE - 2002
NO MARKETABILITY DISCOUNTS OR MINORITY INTEREST DISCOUNTS IN DIVORCE VALUATION EXCEPT IN SPECIAL CIRCUMSTANCES
- HAVEN‟T HEARD OF ANY YET
VALUE TO HOLDER – BUT IS THIS ECONOMIC REALITY?
RATIONALE CAME FROM OPPRESSED SHAREHOLDER CASES
MARKETABILITY ADJUST FOR LACK OF LIQUIDITY BUT SPOUSE ISN‟T SELLING ANYWAY
COURT FOUND THAT APPLYING THESE DISCOUNTS WOULD UNFAIRLY MINIMIZE THE MARITAL ESTATE
OTHER POINT IN BROWN IS THAT THE APPELLATE DIVISION SAID THAT ABSENCE OF GIFT TAX RETURNS DID NOT MEAN THAT THERE WAS NOT A GIFT THAT WAS OTHERWISE PROVEN
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Business Valuation - continued
STENEKEN
DOUBLE DIP- CAN YOU USE THE SAME INCOME FOR SUPPORT AND VALUATION – YES- ISSUE FRAMED BY APPELLATE DIVISION – WHETHER IT IS PERMISSIBLE DOUBLE
COUNTING TO VALUE A BUSINESS BASED ON REASONABLE AS OPPOSED TO ACTUAL COMPENSATION, AND THEN CALCULATE ALIMONY BASED ON THE SAME EXCESS SALARY THAT WAS ADDED BACK TO BUSINESS INCOME, AND INCREASED THE VALUE FOR WHICH THE PLAINTIFF ALREADY RECEIVED HER SHARE
- TRIAL COURT IMPROPERLY USED NORMALIZED EARNINGS AS OPPOSED TO ACTUAL EARNINGS FOR SUPPORT
- HUSBAND ARGUED THAT BECAUSE ALIMONY AND E.D. ARE INTERRELATED, THAT IT WAS IMPERMISSIBLE – SHE WILL GET BENEFIT OF INCOME TWICE
- BASE SUPPORT ON ACTUAL EARNINGS, INCLUSIVE OF PERQS, ETC. REASONS WHERE THERE COULD BE A DOUBLE DIP
- USE OF NORMALIZED EARNINGS FOR VALUATIONS PROPER
JUSTICE LONG DISSENT – THERE SHOULD NOT BE A BRIGHT LINE
REASONS WHY IT COULD BE UNFAIR
Financial Issues in Divorce in New Jersey
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Joint Tax Returns
WADLOW – 1985- CAN‟T COMPEL- JOINT RETURN COULD HAVE CIVIL OR EVEN CRIMINAL IMPLICATIONS- HOWEVER, COURT CAN CONSIDER THE FINANCIAL IMPLICATIONS OF
NOT FILING- HYPOTHETICAL RE: BROKER‟S COMMISSION NOT CONSIDERED
BURZSTYN – 2005- CAN COMPEL A JOINT RETURN
RECENT CASE THAT SAID IT WOULD BE UNFAIR TO COMPEL
INDEMNIFICATION AGREEMENTS- NOT REALLY A PANACEA BECAUSE THEY ARE NOT BINDING ON THE IRS
HOW ARE PRIOR TAX YEARS HANDLED IN A SETTLEMENT
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Innocent Spouse Relief
DOES IT REALLY EXIST?
FORM 8857- REVISED A FEW YEARS AGO
FORCES PEOPLE TO POSSIBLY ADMIT TO FRAUD UNDER OATH
ADVISE PEOPLE TO SPEAK TO ACCOUNTANT OR TAX ATTORNEY BEFORE FILING FORM
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Allocation of Dependency
Exemptions
DESPITE FEDERAL PREEMPTION, THEY ARE TYPICALLY ALLOCATED
OFTEN TOO SIMPLISTIC AND WITHOUT REGARD TO BENEFIT/FINANCIAL REALITY
IGNORE PHASE-OUT – GIVEN PHASE-OUT – IS IT REALLY WORTH FIGHTING ABOUT?
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Allocation of Dependency
Exemptions - continued NEW RULES IN 2009
Custodial parent and noncustodial parent. The custodial parent is the parent with whom the child lived for the greater number of nights during the year. The other parent is the noncustodial parent.
If the parents divorced or separated during the year and the child lived with both parents before the separation, the custodial parent is the one with whom the child lived for the greater number of nights during the rest of the year.
Equal number of nights. If the child lived with each parent for an equal number of nights during the year, the custodial parent is the parent with the higher adjusted gross income.
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Court‟s Duty to Report
SHERIDAN v. SHERIDAN
UNREPORTED INCOME/UNDER-REPORTED
INCOME /EXCESS PERQS.
ALL ILLEGAL ACTIVITY MUST BE
REPORTED
IS IT REALLY A MYTH?
WHEN THE DUTY VESTS?
BINDING ARBITRATION
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Child Support
Paying for College Newburgh v. Arrigo – Factors courts must consider:
(1) Whether the parent, if still living with the child, would have contributed to the costs of the requested higher education;
(2) The effect of the background, values, and goals of the parent on the reasonableness of the expectation of the child for higher education;
(3) The amount of contribution sought by the child for the cost of higher education;
(4) The ability of the parent to pay that cost;
(5) The relationship of the requested contribution to the kind of school or course of study sought by the child;
(6) The financial resources of both parents;
Financial Issues in Divorce in New Jersey
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Child Support
Paying for College - continued(7) The commitment to and aptitude of the child for the requested education;
(8) The financial resources of the child, including assets owned individually or held in custodianship or trust;
(9) The ability of the child to earn income during the school year or on vacation;
(10) The availability of financial aid, in the form of college grants and loans;
(11) The child‟s relationship to the paying parent, including mutual affection and shared goals, as well as responsiveness to parental advice and guidance;
(12) The relationship of the education requested to any prior training and to overall long-range goals of the child.
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Child Support
Unreimbursed Medical Expenses Gotlib v. Gotlib – unreimbursed medical
expenses akin to child support and cannot be waived
“[A] parent‟s obligation to pay un-reimbursed medical expenses should be deemed by a court reviewing a motion to enforce litigant‟s rights as an essential benefit to the parties‟ children. In this light, the right to receive these payments belongs to the children, and is therefore not subject to waiver by a custodial parent.”
Financial Issues in Divorce in New Jersey
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Life Insurance
Commonly used to secure an alimony or
child support award
Financial Issues in Divorce in New Jersey
© 2010 Fox Rothschild
Avoiding Penalty on Transfer of
Retirement Assets
MUST BE INCIDENT TO A DIVORCE
SIMILAR RULES FOR IRA‟S AND 401K‟S
MUST BE A DIRECT CASH OUT- IF ROLL OVER THEN CASH OUT –
PENALTY WILL BE APPLIED
CAN ONLY AVOID PENALTY, NOT THE TAX
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Prenuptial Agreements
WHO NEEDS THEM- -SECOND FAMILIES
- -PROTECT FAMILY WEALTH OR PREMARITAL ASSETS
ONE SIZE DOES NOT FIT ALL
FULL DISCLOSURE CRITICAL – PERSONAL
ACCOUNTANTS/FINANCIAL ADVISERS TO
HELP PREPARE SCHEDULE OF ASSETS
AND LIABILITIES
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Palimony
IS IT DEAD IN NEW JERSEY?
NEW STATUTE SIGNED ON GOV.
CORZINE‟S LAST DAY IN OFFICE- PROMISE OF SUPPORT FOR LIFE MUST BE IN
WRITING
- THAT WILL NEVER HAPPEN?
CASES REGARDING RETROACTIVE
APPLICATION OF THE STATUTE ARE
CURRENTLY PENDING
Financial Issues in Divorce in New Jersey
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Questions
Financial Issues in Divorce in New Jersey
© 2010 Fox Rothschild
Contact Information
Eric S. Solotoff, Esq.
(973)994-7501
Sandra C. Fava, Esq.
(973)994-7564