Friday, January 30, 2009

Alimony in New Jersey - Permanent v. Limited Duration

Recently, in an unpublished decision, the Appellate Court of the Superior Court of New Jersey reversed a trial court’s award of permanent alimony, instead finding that the alimony should only be of limited duration. The name of the case is Valente v. Valente, docket #A-1593-06T1.

In New Jersey, the court considers various factors in awarding the different types of alimony: rehabilitative, reimbursement, limited duration or permanent. In this case, the marriage lasted 11 years and 9 months and husband earned over $300,000 per year while wife was a housewife with an earning capacity somewhere between $20,000 and $30,000 per year. The trial court awarded permanent alimony but, upon review, the Appellate Court directed the trial court to award limited duration alimony. Here, the parties were relatively young and the children were of school age which would lessen the need for child care when wife returned to the workforce. Notably, the court commented that the wife could find employment at some point and the award of limited duration alimony would provide her incentive to do so. If she had permanent alimony, perhaps she would not attempt to find a job. The court also noted that at the end of her limited duration alimony, she could apply to the court for an extension if she could not maintain her lifestyle or, at that point, if she could not find adequate employment, ask that the alimony be made permanent. Here, the court was mindful that the parties were relatively young and had many working years ahead of them.

Thursday, January 29, 2009

Get Your Paperwork In Order!

I recently blogged about a case wherein a daughter, as Executrix of her father’s estate, argued before the Supreme Court regarding her deceased father’s pension plan and beneficiary designation. You can read that article here.

In this matter, Kennedy v. Plan Administrator, the decedent participated in a savings and investment plan through his employer. Under that plan, he had the power to designate a beneficiary. When he married, he designated his then wife as his beneficiary. When they divorced, their Property Settlement Agreement stated that she gave up all of her interest in the benefits from his plan. However, the decedent did not take the one further step of removing his former wife as the beneficiary.

When he died, his daughter, who is the Executrix of his estate, asked the employer for the funds but the plan administrator relied on the file which showed that his designated beneficiary was his ex-wife. The daughter, as the Executrix, then filed a lawsuit and the case went to the Supreme Court of the United States. The Supreme Court found that the ex-wife’s waiver in the divorce settlement agreement did not constitute a waiver of her benefits that nullified ex-husband’s express designation in the plan documents. Accordingly, it was correct that his ex-wife receive the benefits, over his estate.

Obviously, all of this could have been avoided had the decedent simply changed his beneficiary designation by filling out a form, when he got divorced. Accordingly, whenever a major change occurs in your life (birth, death, divorce, separation, etc.) you should review all of your beneficiary designations and make sure that they comport with your wishes. If you would like to read the entire Opinion from the Supreme Court of the United States, authored by Justice Souter, you can click here.

Tuesday, January 27, 2009

Child Support In High Income Cases

In an aptly named case, Rich v. Rich, a mother and a wealthy father argued over child support wherein father admitted to earning approximately $10,000,000 per year and owning approximately $40,000,000 in assets. (Yes, that is millions!) At the trial level, the support awards ranged from approximately $32,000 per month from the conference officer, to approximately $9,000 per month from the master and approximately $15,000 per month from the judge. This case originated out of Schuylkill County.

Basically, mother complained that she could not duplicate the amenities and extravagances that father could afford when he had custody of the children. Apparently, father’s home, the previous marital home, is worth between $2,000,000 and $3,000,000 and is located on 150 acres of land. The property includes a 10,000 square foot home as well as an Olympic size indoor swimming pool, a barn, farmhouse, treehouse, a stream and pond for fishing and a recreational area for all terrain vehicles and camping. After the separation, mother apparently purchased a home worth approximately $725,000 which is a marked reduction in lifestyle.

Both mother and father appealed to the Superior Court on a variety of grounds, including the calculation of the support based on mother’s reasonable needs, emancipation of one of the children and the lifestyle issues the children enjoy at each parent’s residence. In this twenty-two page Opinion, the court reviewed the case law that guides in these high income cases. To review the Opinion in its entirety, click here. Even though father could have afforded much more, the court placed limits on mother’s support, tying it to the reasonable needs of her and the children.

Monday, January 26, 2009

Preparing for your Prenuptial Agreement

"Love is a temporary madness. It erupts like volcanoes and then subsides."

- Louis de Bernieres

When the loves subsides, people are worried about their financial future. Hopefully, those discussions take place before the wedding. Accordingly, anyone getting married should be contemplating a Prenuptial Agreement. Even if you and your intended spouse ultimately do not enter into a Prenuptial Agreement, the exercise of getting together your financial information and having a mature discussion about your respective financial situations, as well as your financial future, will be invaluable to your relationship.

If you are thinking about getting a Prenuptial Agreement in preparation for your upcoming wedding, the first step in the process is to gather both parties’ financial information. A well-drafted Prenuptial Agreement requires full and fair disclosure. Accordingly, an income/asset/debt statement will be the first step in preparing the agreement. Additionally, if your attorney has a comprehensive understanding of the financial situation before beginning to draft, he or she can be more efficient. Moreover, an in-depth discussion regarding your financial information is an excellent exercise for brides and grooms.

As you gather your financial information, you should also gather back-up documentation. It would be a good idea to set up a file to keep with your copy of the Prenuptial Agreement so that you have records in case the agreement is ever challenged.

As part of your preparation, you should also have an idea of your plans with your future spouse. Do you intend to have children? Do you both intend to continue working? Do you intend to move your primary residences? No Prenuptial Agreement can provide a crystal ball into the future and account for every possible situation that a married couple will face. However, having some type of an idea as to what you plan will help your attorney to at least draft for those situations.

You should look into the enforceability of Prenuptial Agreements in the state where you plan to reside. Different states have different case law and statutes on the issue, as well as requirements.

Think about your debts as well as who has given you gifts. If your parents gave you the down payment on your home, they may not want it back, unless of course, you divorce. If you borrowed money but do not have a valid promissory note, correct that before you marry.

Once you are married, especially if you are the independent spouse (wealthier spouse), in order to be adequately protected by the Prenuptial Agreement, you should comply with its various provisions. By way of example, if a Prenuptial Agreement only protects separately titled assets, realize that property or debt you place in joint names will not be protected.

If you are getting married, even if you are not planning to have a Prenuptial Agreement, this is a good time to gather documentation regarding your net worth. I previously wrote an article on this issue, which you can access here. You should also obtain a credit report on yourself and view your intended spouse’s. Now is the time to learn if you are marrying a saver or a spender.

Best wishes!

Wednesday, January 21, 2009

The Court Addresses: When Does Child Support End?

Many people wonder how long they will have to pay child support or, if they are the parent receiving the support, how long that support will last. The answer depends on a variety of factors, but most importantly for the geographical areas where I practice, whether you are subject to New Jersey or Pennsylvania law.

In Pennsylvania, generally speaking, a child is emancipated at the age of 18 or graduation from high school, whichever is later. Accordingly, if the child turns 18 during the senior year of high school, the support will last until high school graduation. If the child turns 18 slightly after the high school graduation, the child support will last until their birthday.

In New Jersey, we do not have a bright line, automatic emancipation rule. Accordingly, if a child is still dependent on their parents, and under the parents’ sphere of influence, child support will continue, as well as, in most cases, payment for secondary school expenses, such as college tuition.

As with any rule, there are exceptions and qualifications. However, this represents a disparate result in states that border each other. In New Jersey, the matter has been litigated time and again so the rule will probably not change any time soon. Likewise, in Pennsylvania, the emancipation rule is most likely here to stay.

In New Jersey, the Appellate Division recently reviewed a case wherein the parents had consented to vacate the daughter’s child support on the basis that she was emancipated. Apparently, the father no longer wished to pay child support, and, in any event, had only agreed to pay as long as she continued as a full time student. The mother apparently also had problems with her and the Opinion indicates that she was the complaining witness in some type of criminal charges against her. When the child support was terminated, the daughter actually intervened in the action. The trial court, without holding a hearing, declared that the support for the daughter should continue. When the Appellate Court reviewed the case, it found that the trial court should not have made the decision without a full hearing. Accordingly, the case was remanded back to the trial court.

Notably, the court, as in all of these types of cases, looks to the specific facts, such as the transcript, the child’s grades, the circumstances surrounding her relationship with either parent and whether or not she was under their sphere of influence, and how she supported herself. Therefore, to prepare for this type of argument, be ready to present clear evidence. If you would like to look for this case, the name of the case is Novy v. Novy and the docket number is A-4207-07T2. However, this case does not have precedential value as it has not yet been approved for publication.

Tuesday, January 20, 2009

Wording of Settlement Agreements

Many clients and non-lawyers complain that once an attorney gets a hold of an agreement, it becomes superfluous with the amount of words and pages. As someone who has litigated and negotiated a considerable number of divorce, custody and child support agreements, I can firmly say that the majority of that language, even though it seems boilerplate, has meaning and is necessary.

Recently, the Superior Court of New Jersey, Appellate Division, addressed the spirit of an agreement as to alimony. In the case of Hutton v. Hutton (Docket No. A-5180-07T3, the husband and wife negotiated a settlement agreement which was placed on the record in front of the judge. Both parties were questioned as to whether they understood the terms of the agreement and whether they thought the terms were fair and reasonable. Apparently, the parties agreed that the husband would pay "permanent" alimony.

Eight years later, the husband requested a reduction or termination of his permanent alimony, alleging that his former wife was cohabiting with another adult, and he was retiring. The Appellate Court looked at the parties’ agreement that had been placed on the record and noted that the issue of permanent alimony was discussed and the husband definitely participated in the proceedings. Additionally, the court assumed that the parties had negotiated the permanent alimony figure and at the time, knew that the husband would retire at some point, as he was in his fifties at the time of settlement. The Appellate Court then deduced that when husband negotiated that amount, and wife agreed to it, they had thought about retirement and included that factor in their negotiations. Accordingly, the husband’s claim to terminate or reduce his alimony was denied.

As far as the allegation of cohabitation, wife stated that the man with which she is allegedly cohabiting was someone that she had hired to do house repairs, she began to date and he occasionally stays overnight. The husband apparently went so far as to hire a private investigator to prove that this handyman lived at the residence. However, it appears that the private investigator only found that the gentleman was at the residence for a little over seven hours in a three week period. Accordingly, his request for a termination based on cohabitation was denied.

This case shows that each and every provision of a settlement agreement contemplates that the complete terms are duly understood and negotiated by both parties. Rarely, if ever, on a petition for modification, will a court undo these types of negotiations. If you would like to review this case on your own, you may be able to find it on the New Jersey Judiciary website, as the cases are posted for a brief time. However, this particular case was an unreported decision which means that it has no precedential value. It does, however, teach us to carefully and thoughtfully review all settlement terms.

Monday, January 19, 2009

Quote of the Day

You play the hand you're dealt. I think the game's worthwhile.

- CS Lewis

Friday, January 16, 2009

Go Eagles

E-A-G-L-E-S EAGLES!!!!!!!!!!!!!!!!!!!!!!!!

Taxes and Divorce

Separation or divorce can have specific tax consequences. Please remember the following when you are negotiating a settlement or trying your case in court:

1. Generally, the spouse receiving alimony must report it as taxable income and the spouse paying the alimony may deduct it. However, in order to be considered alimony, it must meet the factors outlined by the tax regulations. Accordingly, discuss with your lawyer whether or not the tax deductibility/taxable income aspect of alimony is preserved in your agreement or court order.

2. Child support is not tax deductible or taxable income.

3. Discuss how you will file your tax returns. If you are separating but not divorced, you generally have the choice to file as married filing separately, married filing jointly or head of household. However, the rules for which tax status you can choose are specific. Consult with your accountant.

4. Your marital status on the last day of the year (December 31) controls whether you are considered married for that year or divorced for that year. Accordingly, as long as you are divorced by the end of the year, you can file your tax return as single for that year.

5. Review the various exemptions and child care tax credits available and decide how they will be apportioned between the parents.

6. If you file jointly with your spouse, decide in advance how the refund will be divided. Additionally, if you are concerned that your spouse may not share the refund with you, do not ask the IRS to direct deposit the refund in an account. Rather, ask for your refund in a check made out to both of you. It will be more difficult for your spouse to abscond with your refund in that instance.

7. The Internal Revenue Service publishes many guides on these issues. Consult for various forms and publications. However, since many of these issues are complex and can be negotiated or ordered by a court, you should consult with both your attorney and your accountant.

Thursday, January 15, 2009

Tips for Separating Parents Involved in Custody Disputes

  • Custody disputes should be approached in a business-like manner - be realistic about your demands - do not spend your children’s future fighting over small issues.
  • Never talk negatively about the other parent or belittle the other parent in front of your children. The criticism can batter the child’s self-view. Remember - children are part of both parents. Children also pick up on non-verbal cues so be careful about your body language.
  • Encourage and foster your children’s relationship with the other parent.
  • Your children’s interests - not yours - are your primary concern and act accordingly. Frame your issues and concerns from your children’s viewpoint, i.e., "It would be better for our son to spend more time with his father" rather than "I want more time with our son because I deserve it." Custody is decided in the "best interests" of the children so think about your case from their perspective.
  • Do not use your children as a courier service. The less the children feel a part of the battle, the better. In an ideal world, they should barely know any details about the negotiations between their parents and certainly should not be soldiers in the war.
  • Your children may be tempted to dote on you and be a friend and sounding board. Resist the temptation to involve them. Do not "adultify" your children. Let your children be children. Talk to your lawyer, family, friends or counselors about adult issues.
  • If you have a drinking/drug problem or another dependency issue or think you might, get counseling right away. Any impairment inhibits your ability to reassure your children and give them the attention they need at this difficult time. Additionally, self-medicating the pain only makes things worse.
  • If you are the non-custodial parent, pay your child support. Do not make money a part of the battle. Do not discuss your child support with your children.
  • If you are the custodial parent and you are not receiving child support, do not tell your children. It unnecessarily involves them, feeds their sense of abandonment and further erodes their stability, creating worry about adult issues. Do not put a price tag on their heads.
  • If at all possible, do not uproot your children. Stability in their home, academic and social life helps buffer children from the trauma of their parents’ divorce.
  • Attempt, inasmuch as possible, to establish a seamless transition between households so your children are as comfortable and secure as possible with either parent.
  • Remember, the other parent was once your partner - try to remember the good times and positive points about that person, rather than focusing on the negative - your differences.
  • There is a Chinese proverb: "A child’s life is like a piece of paper on which every person leaves a mark." Leave a positive mark - not destruction.
  • Booker T. Washington (1856-1915), an educator, once said: "There are two ways of exerting one’s strength: one is pushing down, the other is pulling up." Use this wisdom as you negotiate custody - be the better person and bring out the best in the other parent, rather than constantly dealing with that person as if he or she is a bitter enemy. Your children will benefit.

Wednesday, January 14, 2009

Avoid Online Divorces

Recently, the State Attorney General of South Carolina said that people who paid a fee to receive divorce forms from an internet service should get a refund because the forms did not comply with state laws.

Apparently, people paid $500 to download forms for a divorce and subsequently, those forms were not accepted at courthouses. Accordingly, the prospective litigants did not receive a divorce and lost their money. The name of the firm was "A Divorce Fast." Apparently, the refunds, of which six had been distributed as of January 10, 2009, were part of a settlement that the Attorney General’s office made with "A Divorce Fast."

Sometimes people look for quick, easy and inexpensive divorce remedies. However, before downloading any forms or trying to represent yourself, you should obtain a comprehensive consultation from an attorney who is experienced to practice in the area where you live. Forms do not provide legal advice, and in this South Carolina matter, the forms were actually distributed by a Canadian service who certainly was not licensed to practice law in South Carolina, and probably was not familiar with the rules and procedure. Therefore, the victims in this case, who could probably ill afford to lose this type of money, were damaged financially, as well as by not receiving their divorce.

Marriage comes with certain rights and responsibilities, and divorce affects those rights and responsibilities. In most cases, if you divorce, and have not settled the rights and responsibilities between you, it may be impossible to go back and get relief. Accordingly, a consultation with a competent attorney is the best way to start the process. If you decide later to try to represent yourself, at least you had fair warning of the law and the procedure.

Tuesday, January 13, 2009

You Lost Me At Kidney

A doctor in New York, apparently frustrated with the pace of his divorce negotiations, has turned to the press, making statements regarding his demand for either a return of his donated kidney or financial compensation.

According to the news reports, the doctor married in 1990 and donated the kidney to his wife in 2001. She filed for divorce in 2005 and, even though we are now into 2009, there has been no settlement. He apparently told the press that he feels betrayed and has been going public with his demands as a last resort. His lawyer, Dominic Barbara, a frequent commentator on the Howard Stern Show and a representative of various colorful characters, states that his client wants "the value of the kidney."

This ploy, while it is gathering media attention, will not get very far in front of a divorce judge. First of all, our organ donation system has strict ethical rules with regard to payment for organs, prohibiting any type of compensation. To assign some type of a value to it in a divorce case would defy the basics of that system. An organ is given as a gift and a gift is given without expectation of anything in return. To claim that it is a marital asset defies both the theory behind organ donation and the principles of divorce law.

The problem with using such a ludicrous argument is, even if this gentleman does have a point regarding any betrayal or disrespect he has suffered in the divorce, it will be difficult to sort through those issues because of the cloud he has created with his ridiculous demands. Certain circumstances that develop during the marriage are just that: decisions of the marriage. A divorce cannot review every day of a marriage and attempt to compensate one spouse to the other for all of the rights or the wrongs. Were that the case, our divorce courts would absolutely grind to a halt, overflowed with people airing their grievances, ad nauseum. Our equitable distribution laws, or in states where we have community property laws, attempt to assign some type of fairness to the situation, without irrationally laying blame or gumming up the process with a tedious review of the marriage.

I doubt this gentleman seriously wanted money or his kidney back. What he most likely wanted is what he has already received: a great deal of mention in the press.

Monday, January 12, 2009

Filing Fees in Philadelphia County Increase

Apparently, Philadelphia’s budget woes have spread to the Family Court. The fee for filing a Complaint in Divorce has increased, effective January 1, 2009, by almost $25. The current fee stands at $303.48. Additionally, there are other fees attendant to divorce and other family law matters. These are court expenses, separate and apart from attorney expenses or other expert fees you may pay in your case. Most notably, the Motion for an Appointment of a Master in Divorce to resolve equitable distribution issues now stands at $496.98. Accordingly, as I advise all of my clients, each divorce or family law matter must be approached in a cost effective and businesslike manner so you are aware of the cost/benefit analysis of each step you take.

Custody petitions are now $76.88 when filed separately from a divorce complaint. Support petitions have remained at $10. A complete list of the new filing fees can be obtained at the Clerk’s office at 1133 Chestnut Street, First Floor, Philadelphia, Pennsylvania.

Sunday, January 11, 2009

Friday, January 09, 2009

Business Owner? You Better Have A Prenuptial Agreement.

Prenuptial Agreements define how intended spouses will address their financial issues in the event of a termination of the marriage (death or divorce). Generally, owning a business or increasing the value of a business during a marriage will result in that business, or the increase in value, becoming part of the marital estate subject to equitable distribution in Pennsylvania and New Jersey.

In order to divide that business, it first must be valued for purposes of divorce. That valuing process can be comprehensive, agonizing, expensive, invasive, unwelcome, and altogether unpleasant, for the divorcing couple as well as all those at the business.

Prenuptial Agreements can predetermine the distribution of a business in a variety of ways. A spouse may waive all interest in the other’s businesses or business property. A Prenuptial Agreement can also state who will control the company after a separation or divorce and how the stock will be titled. In the event that you want to share your business with your spouse, you can define a fair and equitable method for valuing that business, to avoid, or at least minimize, an over-intrusive financial audit.

If you are a small business owner, own stock in a closely-held business, have a family interest in a business, are thinking of starting your own business or otherwise consider yourself an entrepreneur, prior to marriage you should seriously consider a Prenuptial Agreement, to define what will happen in the event that your marriage terminates.

Prenuptial Agreements can be tough topics to discuss, especially amidst the joys of wedding planning. However, working these issues out now, while everyone is friendly, can save a headache later. In addition, you can manage both spouse’s expectations and understand each other’s issues, concerns and business practices.

The adversarial nature of some divorces can inflict such damage on your company, that it may not recover. The divorce itself can be draining and bitter litigation can adversely affect productivity. Open up the communication now and that will serve you well as a couple throughout your life together.

Of course, a Prenuptial Agreement requires certain phrases and recitations to make sure it will be upheld. Do not try drafting this without an attorney experienced in these types of documents. Of course, it costs money now but if your business is worth it, it will be one of the best investments that you have ever made. Of course, the hope is that the Prenuptial Agreement will never be needed. However, understand that a poorly drafted Prenuptial Agreement can be worse than no Prenuptial Agreement at all.

Thursday, January 08, 2009

What is Reasonable?

In what is known as "high income" child support cases in both Pennsylvania and New Jersey, the court first determines the presumptive minimum of child support. The court calculates the presumptive minimum by figuring what would be the highest support amount under the highest income amount listed in the Child Support Guidelines. If the income of the parents in the case exceed that amount, the court then determines what would be a reasonable addition to child support.

Recently, in New Jersey, the Appellate Division of the Superior Court, affirmed a trial court Order of child support in a "high income" case. The name of the case is Kristen Cardell v. Patrick Kirby, Docket No. A-1398-07T3. In this matter, it appears that a married man who resided in the State of New York with his two children had a child with a New Jersey woman during a separation. By the time the child was born, the pair had broken up. She requested child support in the amount of $4,000 per week plus other benefits. ($4,000 per week amounts to $17,332 per month).

While the matter was pending, the father made voluntary child support payments of $2,600 per month. The Opinion does not specifically state where the defendant came up with that number but that figure is slightly more than what would be the presumptive minimum under the New Jersey Child Support Guidelines, so his lawyer most likely advised him that would be the minimum he would be ordered to pay.

The trial court reviewed the testimony and papers submitted by both parties, noting that the child’s reasonable needs appear to have been met with the child support the defendant was paying. The trial judge added an amount to compensate the mother for child care expenses and set the defendant’s child support obligation at $2,793 per month, a fraction of what the mother had requested.

Mother appealed, complaining that the trial court had not appropriately analyzed the factors relevant to a "high income" case. The Appellate court reviewed the law in this area, specifically noting that "a trial court’s decision . . . is discretionary and entitled to deference, absent an abuse of discretion, lack of support in the evidence, or misapplication of controlling legal principals." Cardell v. Kirby. This legal principal is important for anyone involved in a child support matter because it enforces how important the testimony and papers submitted to a trial judge become in the decision. Generally, trial courts are vested with broad discretion and absent a serious abuse of that discretion, an appellate court will not disturb a trial court’s findings. Accordingly, an appeal is not simply a second bite at the apple.

In this case, the court went through the various theories regarding children of high income earners and noted how, in calculating child support, the amount must reflect the opportunities available for the child due to the parents’ means but also the reasonable needs of the child. The law attempts to prevent an inappropriate windfall to either the child or the custodial parent. While it is common, and almost expected, that there be some incidental benefit from the child support to the custodial parent, the amount cannot overreach to the point where it becomes unreasonable.

In this case, the trial court paid strict attention to the expenses submitted by the mother and found that the child’s reasonable needs were met. The appellate court noted that this does not preclude the mother from applying for an increase when there is a change in circumstances, such as a child matures or needs tuition, camp or more funds for her teenage years. Notably, in this case the child was 9 months old so the court found that the child support, in addition to what plaintiff could provide, and the extras provided by father, including health insurance, contribution to a college savings account, a life insurance policy and a significant contribution to unreimbursed expenses sufficiently met the needs of the child.

Courts pay careful attention to the age of the child and what is reasonable. Obviously, a baby has very different needs than a school-age child, and a child approaching high school. Plaintiffs in these types of cases should be careful not to overreach when advising the court of their expenses.

Wednesday, January 07, 2009

From the New York Times Style Section to Essex County Divorce Court in 10 Years

As a divorce lawyer, I often read the wedding announcements. Marriage is the cornerstone of our society. Even though my job involves the end of marriages, I like to peruse the Wedding Announcements section in The New York Times as the blurbs about the betrothed couples are so full of hope and often a great deal of hubris. People are not shy about listing their degrees, jobs and social status. The New York Times often writes a followup to stories to couples that they had featured in their wedding announcement pages, highlighting their togetherness years later. However, I have never seen a follow up story involving a divorce.

Recently, in Essex County, New Jersey, a divorcing couple engaged in a 29 day custody trial over their children. As the court only works on weekdays, a 29 day trial indicates at least 6 weeks of court time. This length of time is extraordinary and rarely heard of in custody cases, or any other type of family law matter.

The husband and wife in this particular case announced their marriage back in September of 1993 in The New York Times Style Section. At the time, the wife was a dermatology resident and the husband had recently received a medical degree. They both graduated from prestigious schools with excellent grades and came from families with very successful parents. See their wedding announcement here.

This husband and wife had two children, a son born in 1996, and a daughter born in 1998. The divorce was initiated in 2003 and worked its way through the court system for 5 years. Wife alleged domestic violence on the part of the husband. Both parties sought sole custody of the children, to the complete exclusion of the other parent. However, the husband later changed his request to shared custody.

Apparently, wife made many allegations about her estranged husband. Additionally, the children continue to make allegations about the husband and his treatment of them. This eventually resulted in a court supervisor watching over husband when he had the children with him. However, the various experts involved in the case began to come to the conclusion that the children were "generating stories" and making "false allegations." Eventually, all involved came to the conclusion that wife was behind children’s alienation from husband. However, for a great length of time, husband’s custody time with his children remained supervised, only to protect him from false allegations from the children and not because he presented a danger to the children. Significantly, the court and the experts found that as the years went by, and husband spent more time with the children, his relationship with them continued to improve. However, when they had time with the wife, they went back to being hostile and accusatory, to the point where the children were not permitted to call wife when they were in the custody of husband so as to avoid the inevitable negative changes in their behavior.

Wife attempted to present the testimony of 35 separate witnesses. However, the court asked for a written proffer (a document stating the expected testimony of each witness) before he would allow such extensive testimony. Eventually, he accepted their written statements, but did not allow each to come into court. The judge’s reasoning was that the testimony would have been duplicative and unnecessary. Considering the trial was 29 days without these witnesses, the judge made a sound decision.

Eventually, after the lengthy trial, the court ordered that husband and wife should essentially share custody of the children. This was despite wife’s continued objections to that result. Wife even appealed the judge’s verdict to the Appellate Court of New Jersey, but was turned down there.

A review of the Opinion shows behavior of parents at their worst. Undoubtedly, the children will be scarred by being involved in such long term and bitter litigation that has spanned most of their childhood. Considering the length of the trial and the acrimonious litigation, the attorneys fees must have been hundreds of thousands of dollars for both parties.

If both parents want custody time with their children, courts usually accommodate it to the extent possible, as long as both parents are fit. Parents should frame their expectations reasonably and always refrain from speaking negatively about the other parent. Commencing a case with the request that the other parent be completely excluded from the children, absent significant and compelling circumstances, will only damage credibility in the eyes of the court. There are no winners in this type of litigation. Even if money is no object, the emotional cost on all involved, including the children, begs the question: If this level of feuding in the best interests of the children?

Tuesday, January 06, 2009

New Year - New System for Financial Organization

Organization, clutter control, maintaining systems - it seems like you cannot pick up a magazine or browse a website without coming across at least one article on this subject.

Personally I know the immense satisfaction I get from any number of organizing projects - when I get to them. I clean my closets and discover articles of clothing I forgot I had. I organize my shoes and come across a pair I have not worn in a while. I straighten my desk at work and feel a sense of accomplishment - and, at least temporarily, until the piles return, that I can accomplish anything.

I have recently obtained the same satisfaction from organizing my financial life. Even if you have very little, or you feel that your debt outweighs your assets, actually facing your financial status - and taking control, will give you a sense of accomplishment. Perhaps you will find that your situation is actually better than you had anticipated. Or perhaps you will discover bad news – but if so – at least you can make a plan to turn things around. Sure, it is easier to ignore those bank or credit card statements, just like people who have a problem with their weight sometimes avoid stepping on scales. But a recent study showed that those who wrote down what they ate actually lost more weight than those who did not. So taking that step to actually face your situation may be the most difficult - but the most rewarding.

Some life occasions necessitate a cohesive, organized summary of your financial life. By way of example, applying for a mortgage, refinancing a mortgage, financial aid for school (for yourself or your child), a small business loan, a personal loan, a divorce, or even a marriage all comprise occasions when you must gather together documentary evidence of your financial life. The process can, and usually is, daunting. How do you get your hands on a statement for an account that has gone electronic? How much is in that long forgotten savings account? What is the balance of that retirement account? Do I really have the courage to compile all of my credit card, student loan and mortgage statements to add up all of my debt?

Instead of waiting for an occasion, when you are undoubtedly under the gun, and therefore under stress, keep this material organized at all times. I just recently underwent this project myself when I applied for financing for a real estate project. Getting started was tough but, once underway, and then completed, I felt an enormous sense of satisfaction. And now that I am simply in maintenance mode, the ongoing tasks are relatively painless.

First step: set up a system. This can be the fun and personal part - pick colors and stationary supplies that reflect your personality and evoke the mood and feeling you are seeking: accomplishment, serenity, completeness, etc. In order to maximize accessibility, and minimize complexity, I chose a regular two inch binder with numbered tabs. The cover page references each tab. In the theme of good news before bad, I listed assets, and then debts. Each tab contains the latest statement for that particular asset of debt. This, of course, entails, gathering, once and for all, a statement for every asset and debt. Go online and print out statements for accounts that are only delivered electronically. Open all credit card and bank statements. Hunt down that recent retirement account statement. Do not forget the positives – have a few savings bonds or an old savings accounts left over from childhood? Give them their own tab. Once assembled and categorized, you can decide what to do with them later – consolidate, merge, cash out – or leave as is to watch grow. With debt – take a good hard look at the amounts of your debt and interest rates – You may be able to consolidate, negotiate a lower interest rate, or route payments to higher interest debt – for positive results to your bottom line.

Many of these numbers change periodically. By way of example, my General Electric Stock seems to change by the hour. My retirement account mutual fund, however, has fortunately stayed in the same general neighborhood. My student loan balances slowly, but steadily decrease. It is impossible to keep anything of a financial nature consistently up to date, but at least having the latest statement for each of your assets or debts in one place gives you a snapshot into your financial health.

Why, you may ask, would anyone choose such a low tech method for assembling financial data? Financial programs exist that would perform all of these functions in a snap, stored on hard drive, and hopefully backed up, and automatically updated. However, starting out low tech can be the best first step for a variety of reasons. First and foremost, those that are linked in to their accounts via an efficient and constantly updated computer program probably stopped reading this article long ago. Baby steps can reduce the seeming enormity and complexity of a project such as getting finances in order. Additionally, and perhaps most importantly, getting a handle on your finances by literally handling the paper - opening those statements, understanding the information they impart and organizing them in a cohesive fashion gives you the basic building blocks for a more complex, and more technologically oriented system later. But if you are new on this financial awareness journey – begin with the basics – for the same reason we teach schoolchildren to add and subtract with a pencil and paper rather than a calculator at first – build a good foundation – and it only gets better.

So now you have an understanding of the reasoning and the basic building blocks of the project. For each numbered tab, label the asset or debt. Make sure you include important identifiers so that, at a glance, you can ascertain if this is a retirement, or non-retirement account, jointly held asset, stock, bond or money market or a credit card or personal loan, to name a few. By way of example, "Vanguard Retirement Accounts" tells you the name of the institution and the type of account. Another example: General Electric DRIP account tells you the type of stock you are buying - and the form in which you are buying it.

Next, take a look at your latest statements. Make sure the statement has the identifying information you need: account number, name and value.

Go through each and every asset or debt you have and establish a tab for each. This process could take a matter of days, weeks or even months. You may think you have finished only to remember a long forgotten asset or debt: the savings bonds from your bar mitzvah, the bank account set up by your grandmother twenty years ago or the credit card that gets paid directly from your bank account.

Next behind each tab place the latest statement for that particular account. Each month, when you receive the statement in the mail, place it behind the tab, most recent statement first. If it is an account that does not produce a paper statement, note on the first page that you must download it yourself and print it out periodically. Additionally, if you have an account that changes significantly on occasion, print out that statement after the significant change. For example, if you have a credit card balance that you pay off, print out the online statement at that time. Or, if you have an investment account that you only add to periodically, print out the statement after those additions.

For assets that may not generate periodic statements noting value, such as real estate or a coin collection, print out an appraisal or accounting when you happen to obtain one. Or, if a house similar to yours sells, print out the real estate listing. This way, you will at least have an approximation.

Now back to the initial summary page. This is where you tally everything up – are the assets worth more than the debts? Are things better or worse than you had originally anticipated?

Put assets down the left hand side of the page, with their values, and debts down the right side of the page. If you have a color printer, print assets in black and debts in red. If certain debts correspond to specific assets, put them in the same row, so you can see the correlation. For anything that is an estimate, note it in italics - or perhaps a different color. Add up each column.

Once you finish the initial project, monthly maintenance becomes easy and routine. When statements arrive, replace the old with the new. Shred the old, or scan and keep it on your computer for future reference. If your savings account remains stagnant month after month, this exercise may be the incentive to contribute so that the numbers increase. This goes the same for the debt – knowing what you have, and what you owe, will make you think twice as you allocate that month’s resources.

Once you are comfortable with your system, you may graduate to an online money management program – and to get started, you have everything in one place. Or, you may prefer the binder system – but then choose to transform all of the information into an electronic file - by scanning the statements, rather than keeping paper copies.

I call my system my "Net Worth Binder." Now I am ready, to apply for a mortgage, show my finances to an estate planner or financial planner, re-evaluate my budget, or simply just be aware of what I have. My recent real estate project was a breeze. When I spoke with my banker, I merely photocopied my entire binder and sent it along. I would like to believe my banker was impressed with my level of organization, and my ability to produce a cohesive presentation of my financial status. Good luck with your financial plan, and I hope the resulting organization assists you in achieving your goals.

Saturday, January 03, 2009

Real Estate Values and Divorce

Since equity in a home is often the largest asset in a marital estate, when property values fall, so does the amount a divorcing couple has to divide. This issue made it to the first page of the New York Times this week. Please click here for the story.

Friday, January 02, 2009

Discipline ---- or Abuse and Neglect?

Recently, the Appellate Division of the Superior Court of New Jersey issued an opinion in a case wherein children called the police and went to the hospital after being disciplined by their father. The children complained that their father abused them.

The Division of Youth and Family Services became involved in the case. At trial, the police officer testified that he saw no evidence of abuse. However, the children, after going to their mother's and the hospital, were able to convince the Division of Youth and Family Services that they were victims of abuse at the hands of their father.

The father had custody of the children. He testified that he had limited their internet access. They complained they were guests in their own home. Father responded by ordering them to write a 500 word essay as to why they were not guests in their own home. The son, in a bout of resourcefulness mixed with sarcasm, used the computer to cut and paste the same sentence over and over to complete his essay. An argument ensued. From the father's story, he did touch the children but nothing he did rose to the level of abuse, or even physical punishment. The children claimed otherwise and called the police. As noted earlier, when the police officer was not impressed by the children's story, they went to the hospital. If at first you don't succeed --- keep going until you find someone who takes your side.

The children were able to convince the trial court that they were abused. However, the appellate court doubted the story, and reversed and remanded the case. Unfortunately, though, for a time, the father lost custody.

Intact familes do not often have problems with the adults exercising authority and doling out discipline. Children have no appeal rights in an intact family, no feuding parent to turn to, no judge involved to overrul a parent. This is something that a separated or divorced family must address.

If parents engage in an acrimonious battle, children understand that the war between their parents can give them room to manipulate the system. Examples:

-If dad says, no -- I will ask mom.

-If mom disciplines me, I will threaten to tell the judge that I want to live with dad. This of course touches on the core of every separated parent's fear.

-If I really want something, one of my parents will give in because they are too afraid of losing me to the other parent.

Separated parents must come together on some level to assure that their children do not wield this type of power. It compromises their maturing process, leads to untold anxiety and tension in the household and ultimately interferes with their development.

To read the above referenced opinion, please click here.

(Links usually expire within seven days of posting. The full name of the case is: Division of Youth and Family Services vs. M.C., III.)

Thursday, January 01, 2009

Happy 2009!

Here it is, a New Year. We got to make some resolutions, as well as interest and tax payments in this joyful season. It's the start of a New Year of trials and tribulations, and if everybody that does anything gets caught, it will be mostly trials.

-Will Rogers

Happy New Year 2009!