Thursday, January 31, 2013

Consideration of costs of sale in New Jersey during divorce.

Often one of the largest assets of a marriage is the marital residence.  When parties own a real property, such as a home, together during a marriage, there is often much contention about how that house should be “divided” during a divorce.  Obviously, a home is simply not an asset that is conducive to cutting down the middle and giving a portion to each person.  Instead, the parties must either decide on or allow the court to determine the value of the home.  Then, the value of the home is divided between the parties.

The division of real property, meaning house or other real estate, is often easiest when the parties decide to sell the property incident to the divorce, because then the sale price of the property is the definite, known value of the property.  Yet, in many cases, one party needs or wants to stay in the residence after the divorce.  In these situations, the parties use their best guesses as to the value of the home and then one party “buys out” the other party.  Typically, this “buy out” is not in the form of one spouse actually giving money to the other party.  Rather, usually it means that the party that is not keeping the house gets more of the parties’ other assets, as long as the marital estate contains other assets.

In New Jersey, when valuing the home for purposes of divorce, the courts, and therefore the parties, will look at the fair market value of the house.  The parties’ may enlist realtors to help ascertain the selling prices of comparable homes in the neighborhood or may look to a website, such as, and then agree on the value.  In other cases, when the cost is deemed necessary, the parties may pay for a formal appraisal of the property at a cost of $250.00 to $500.00 for a residential property.

In addition to determining the fair market value of the home, the parties may ask the court to take into account the potential costs of sale.  Potential costs of sale may include expenses such as realtor commissions and transfer taxes.  For example, a home may have a fair market value of $200,000.00; however, when taking into consideration the cost of selling the home and paying a realtor and transfer taxes, which are often in the neighborhood of six percent, the home might only have a value of $188,000.00.

New Jersey case law is clear that the courts will not consider potential costs of sale when the parties are simply transferring the home from joint ownership to one party.  See Wadlow v. Wadlow, 491 A.2d 757 (Super. Ct. 1985).  In other words, the courts will not discount the fair market value of the home if one spouse is keeping the house and buying out the other spouse.  On the other hand, New Jersey case law appears to be open to considering potential costs of sale if there is definitive proof that the house is going to be sold to a third party.  See Daly v. Daly, 432 A.2d 113 (Super. Ct. 1981).  The reason that New Jersey courts differentiate between these two situations is because in the case where one party is keeping the home after the divorce, there is no proof that the costs of sale will ever actually be incurred.  In contrast, if there is proof that the parties are going to sell the home to a third party, then the costs of sale likely will be incurred and are worth considering.

When going through a divorce in New Jersey, it is important to understand how your home might be valued, because it could impact the overall distribution of assets in your case.  Make sure that you consult with an attorney to discuss the impact of valuation of real property during equitable distribution. 

Written by Elizabeth A. Bokermann, Esquire, associate attorney at the Law Offices of Linda A. Kerns, LLC.

Saturday, January 26, 2013

Inspiration on a Saturday

"Rather go to bed without dinner than to rise in debt."

- Benjamin Franklin

Thursday, January 24, 2013

Case law review regarding embryos during a divorce

In the April 2012 decision in Reber v. Reiss, 42 A.3d 1131, 2012 Pa. Super 86, the Pennsylvania Superior Court decided how to divide in vitro fertilization (“IVF”) created embryos during an equitable distribution hearing as part of a divorce. Husband and Wife were married in 2002, and in 2003 Wife was diagnosed with breast cancer and subsequently underwent aggressive treatment. After Wife’s diagnosis, the parties underwent IVF treatment to preserve embryos, because it was unlikely that Wife would be able to conceive after the cancer treatments. Husband filed for divorce in December 2006 and had a child with another woman in January 2008. Wife, 44 years old at the time of the hearing, asked for all thirteen pre-embryos that were created during IVF for implantation. The trial court and the parties agreed that the embryos were marital property and were thus subject to equitable distribution. 

The parties went before a Master, but they did not settle. Therefore, the Master filed an Amended Report and Recommendation for the trial court. The Master wrote that the pre-embryos should be given to Husband so that he can direct the storage center to destroy and discard them. Wife filed an exception (a type of appeal) to this report and they went to trial in November 2010. The trial court stated that a court usually finds in favor of the party wishing to avoid procreation. However, the court found that  Wife’s inability to be a biological parent without the pre-embryos was an interest that outweighed Husband’s desire to avoid procreation. Husband appealed.

Equitable distribution orders are only reversed if there is an abuse of discretion. In this case, Husband and Wife were separated and disagreed on whether the pre-embryos should be awarded to Wife for implantation or awarded to Husband for destruction.

At the time of trial, Pennsylvania had no other case law on this issue. The Superior Court looked to other states that have addressed this issue and found three types of analyses: the contractual approach, the contemporaneous mutual consent approach, and the balancing approach. In this case, both the Master and the trial court used the balancing approach, because neither Husband nor Wife signed the portion of the consent form related to the disposition of the pre-embryos in the event of divorce. The balancing approach weighs the interests of the parties.

The issue in this case was different from the cases in other states because, here, Wife had no ability to procreate biologically without the use of the pre-embryos. Husband argued that the trial court erred in finding for Wife because she did not produce any medical evidence or medical expert to verify that she could not procreate biologically. However, the trial court reasoned that it was well known that chemotherapy and radiation, both of which Wife endured for multiple rounds, threatened fertility and was satisfied with Wife’s testimony that her doctors had informed her it would be almost impossible to become pregnant naturally.

Husband also argued on appeal that Wife had other options available to her, such as adoption and foster parenting, if she wished to become a parent. However, the Superior Court agreed with the trial court in the rationale that adoption was not an available option given Wife’s past medical history and the likeliness that adoption agencies would not be willing to allow her to adopt a child. 

Furthermore, Husband made the argument that he never intended to procreate with Wife and the embryos were just a “safeguard.” But the Superior Court agreed with the trial court’s analysis that Husband implicitly agreed to procreate with Wife when he agreed to undergo IVF and provided sperm for the creation of embryos.

The Superior Court also looked at whether or not Husband would be financially responsible for a child he did not want, but that was biologically his own. In Pennsylvania, a parent cannot take away a child’s right to support, but the court said it would later consider Wife’s vow to Husband that she would not seek child support from him when the issue became an actual case or controversy before the court, i.e. when there was a child born.

Written by Allyson Lutley, law clerk at the Law Offices of Linda A. Kerns, LLC.  Edited by Elizabeth A. Bokermann, Esquire, associate attorney.

Saturday, January 19, 2013

Inspiration on a Saturday

"Worry is interest paid on trouble before it comes due."

- William Ralph Inge

Thursday, January 17, 2013

What is the role of mediation in a New Jersey divorce?

When parties decide to get divorced, litigation can involve significant time, expense and the stress of multiple court proceedings.  As an alternative to attending numerous court proceedings, many divorcing couples voluntarily elect to participate in mediation.  In other cases, the court orders the parties to participate in mediation as a way to promote settlement and reduce the burden on the overly stressed court system.

Mediation is a process by which divorcing parties meet with an unbiased, third party mediator in an attempt to reach a settlement of pending divorce issues, such as the division of assets and debts.  Sometimes, the parties’ attorneys attend the mediation and other times the parties attend mediation without their respective attorneys.  The role of the mediator is to help the parties talk freely about pending issues and reach an agreement.  However, there are limitations to the process, and sometimes the settlement talks unravel.

In the published New Jersey case, Lehr v.Afflitto, Husband and Wife were divorcing in New Jersey.  After attending a Matrimonial Early Settlement Panel, where the parties appear before a panel of experienced family law attorneys who try to help the parties reach a settlement, the parties were ordered to attend mediation.  As part of the order to attend mediation, it was clear that under NJ R. 1:40-4, the mediation proceedings were to remain confidential and could not be used as evidence in a later trial if the parties could not reach a settlement.  At the end of the parties’ second mediation session, the mediator sent the parties’ attorneys a letter outlining thirteen pending issues upon which there was an agreement.  The letter also stated that it was the mediator’s understanding that Wife’s attorney would draft a Property Settlement Agreement (“PSA”), incorporating the various issues.  Furthermore, the letter noted that there were at least three pending issues that were not finalized.

A few days later and before either attorney drafted a PSA, Husband decided that he did not agree to the terms as the mediator had outlined them.  When Wife went to court to enforce the terms as outlined in the mediator’s letter, she prevailed and the court found that the agreement was enforceable.  Then Husband appealed, and he argued that a binding settlement had not been reached, which meant that there was no agreement to enforce.  The case continued to wind its way through the court system and was subject to additional appeals. 

Ultimately, the appellate court found that the following issues were important: (1) under R. 1:40-4, the mediator should not have been allowed to testify at trial and (2) that without the mediator’s testimony, the evidence was not clear that both parties thought that they had an agreement.

What does all of this mean for you if you are going through a divorce and using mediation?

  • It is important to understand the limitations of mediation.  Mediation is a great tool for helping parties to reach a settlement outside of the court system.  An unbiased mediator can help the parties each voice their respective concerns and help the parties reach a fair, middle-ground as a compromise.  That said, a mediator cannot force the parties to reach an agreement.  If, at the end of the mediation session, one or both of the parties is not happy with the results or does not want to reach an agreement, the mediator cannot force the parties to reach an agreement.  Furthermore, the mediator cannot, as is discussed in Lehr, then go to a later court proceeding to testify about what the parties did or said during the mediation session.

  • When attending a mediation session, it is important for both parties to understand the rules and expectations from the outset.  At the end of the mediation session, both parties should clarify whether or not they think they have an agreement.  For example, the parties should understand whether they have an agreement right then and there, or whether the agreement is not final until the terms are incorporated into a PSA and signed by both parties.  Additionally, the parties should be abundantly clear on whether a PSA is being drafted, by whom and what terms it will include.

In short, when participating in mediation, you should be clear on exactly what the rules are and what your expectations are.  If you are unsure whether the terms of any settlement reached during the mediation are going to be incorporated into a PSA before being binding, you should ask your attorney and/or your mediator.  The mediation process will be more effective and successful if both you and your spouse understand the expectations and limitations of mediation before entering the process.

Written by Elizabeth A. Bokermann, Esquire, associate attorney at the Law Offices of Linda A. Kerns, LLC.

Saturday, January 12, 2013

Inspiration on a Saturday

"God could not be everywhere, and therefore he made mothers."

- Rudyard Kipling

Thursday, January 10, 2013

How am I supposed to co-parent? My Ex is a Psycho.

Everyone uses the term “co-parenting.”  You go to court and the judge tells you, in no uncertain terms, that you have to learn to co-parent.  Lawyers, counselors, therapists and doctors tell you that if you want to do the best for your children, you will learn to co-parent.  However, co-parenting implies that both parents are actively doing their part.  

What do you do when the other parent makes co-parenting difficult or impossible?  After all, just as it takes two to tango, it also takes two to co-parent.  What happens when the other parent sends you nasty emails and texts, spreads gossip by telling friends and family members the intimate details of your relationship without regard for the truth, constantly bad-mouths you, fails to share important details about the children, threatens to hurt you, poisons the children with rants and accusations that are simply not true and otherwise is a walking, talking, poke-in-the-eye?  Without both parents participating in the “co,” co-parenting simply will not work.  

So, if you do not have even enough of a degree of civility with your Ex to succeed in even a minimal amount of co-parenting, what are your options when you share children?

Think about your parenting situation at arms-length to assess your options.  Are there other times in your life when you need to deal with difficult people?  What happens when you work with someone who is simply not cooperative or actually impedes productivity?  If you cannot or will not leave the job, and your supervisor will not remedy the situation, generally an employee will simply cope by doing the best job possible and attempting to avoid the other person.  What happens when children of different skills or interests play on a playground?  They may not interact with each other, but rather, they play side-by-side.  Even friends who do not agree on an activity can sometimes manage to still spend time together, without too much interaction.  An example would be going to a museum and each going your separate ways with one going to the impressionist painting area and the other to the sculpture exhibit.  A couple could enjoy spending time together, but simply cannot engage in the same activities.  They may get a house at the shore together, but one spends all of the time surfing, while the other one spends all of the time catching up on reading on the beach.

These coping mechanisms can also be used when attempting to parent with your uncooperative Ex.  Rather than attempting to consult and confer on everything, you simply decide that you will go your way and the other parent will go his or way.  This is a concept called “parallel parenting.”  You still must communicate with the other parent, because that is virtually impossible to avoid and is generally required by the concept of shared legal custody.  However, when you are angry about what happens at the other parent’s home or upset about the other parent’s parenting style or otherwise feel there is no cooperation, you can take a step back and disengage from the situation.  Then, think about how you can develop a strategy that allows you to operate independently of the other parent while still protecting your child.  Additionally, to the extent that the other parent attempts to pull you into the fray by instigating an argument, think about stepping back and avoiding the conflict.

Any serious issues regarding the child’s health, education and welfare must be discussed with the other parent.  However, in parallel parenting, learn to draw the line as to what will significantly affect your child’s health, education and welfare.  Choosing an orthodontist is significant, while the brand of baby aspirin probably is not.  Deciding on public versus private school is significant, while micro-managing homework at the other parent’s house is not.

Sure, agreeing on theories of parenting and giving children consistency and routine from household to household provides the best child-rearing atmosphere.  However, if the other parent cannot or will not cooperate, you need to resign yourself to being the best parent you can be during the time you have your children and trying to let go of the concept of cooperative parenting about the minutiae of your child’s life.  This way, you can limit toxic interactions with the other parent.  By limiting the fighting, you will give your children some relief from the conflict.

Tuesday, January 08, 2013

Helpful Tip Tuesday

Today is Tuesday and every Tuesday we like to post a tip that will help you to handle your legal issues.

Review this oldie but goodie blog post from years past:

New Year - New System for Financial Organization

Sunday, January 06, 2013

Can you be penalized for violating a child support order in New Jersey?

In an unpublished October 2012 New Jersey post-divorce case, Albinson v. Marra, 2012 WL4855818, Father appealed three orders issued on October 7, 2011, and November 3 and 29, 2011, that found him in violation of a child support order for failing to maintain life insurance for the parties’ unemancipated son. In New Jersey, an unpublished decision may not be cited for precedential value but still gives guidance to practitioners. The orders also imposed various sanctions against Father. In October 2011, the trial judge restrained Father from selling or otherwise transferring his home until he showed compliance with the court orders. In November 2011, the trial judge invoked her equitable powers and imposed a sanction of $10,000.00 and amended the Judgement of Divorce to permit Mother to claim the parties’ minor child as a tax exemption each year until he was emancipated. On appeal, Father argued that the judge abused her discretion by imposing sanctions and preventing him from claiming the child on his tax return.

In New Jersey, Family Part judges may, upon a finding that a party has violated a child support order, grant any of the following remedies under Rule 5:3-7(b): 
(1) fix the amount of arrearages and enter a judgment upon which interest accrues; 
(2) require payment of arrearages on a periodic basis; 
(3) suspension of an occupational license; 
(4) economic sanctions; 
(5) participation by the party in violation of the order in an approved community service program; 
(6) incarceration; 
(7) issuance of a warrant to be executed if further violation of the judgment or order; and 
(8) any other appropriate equitable remedy. 
The trial court stated that, since 2004, Father was given numerous opportunities to obtain and maintain the insurance policy, to reinstate it, and to provide documentation that he was in compliance with court orders.

The trial judge explained that the purpose of a life insurance policy was to make sure that there is money to pay for the child support and to raise the child in event of the death of the parent who was required to pay child support. Therefore, the appellate court found there was no abuse of discretion by the trial judge, because she applied an appropriate economic sanction upon Father to coerce him to comply with prior orders.

A judge can employ coercive, but not punitive, economic sanctions. In this case, Father had consistently failed to comply with court orders regarding child support since 2004, and the judge calculated that Father would owe in excess of $100,000.00 if she imposed a $100.00 per day sanction. The judge then imposed a sanction of only $10,000.00. The appellate court found that this sanction provided the correct amount of coercion to motivate Father to comply with court orders, but was not punitive or an abuse of discretion.

With respect to Father’s argument that the trial judge abused her discretion in changing the Judgment of Divorce, the appellate court remanded so that the judge could make the necessary findings of fact and conclusions of law to justify her decision.

You should contact an attorney if you have questions or concerns regarding sanctions or penalties that have been or may be imposed on you or the other party during a court hearing for failure to comply with a court order.

Written by Allyson Lutley, law clerk at The Law Offices of Linda A. Kerns, LLC.  Edited by Elizabeth A. Bokermann, Esquire, associate attorney.

Saturday, January 05, 2013

Inspiration on a Saturday

"Don't bunt.  Aim out of the ball park."

- David Ogilvy

Thursday, January 03, 2013

International travel in custody disputes.

The Pennsylvania Superior Court, on October 5, 2012, allowed a mother to travel overseas with the her young daughter over the father’s objection.  M.P. v. M.P., 2012 WL 4748210 (2012). In July 2011, Wife filed a custody petition seeking permission of the court to travel to Ecuador with her three year old daughter to visit extended family for three weeks.

Wife had obtained primary custody of the child following a July 2009 Protection from Abuse proceeding.  Although the court awarded Husband supervised visitation for two hours per week, he did not take advantage of his visitation rights for the next year and a half. 

At a November 2011 hearing, Wife testified about her desire to travel with her daughter to Ecuador to visit her parents and extended family. She told the court that it would be difficult for her parents to obtain visas and her mother’s health issues made it difficult for her to travel to the United States. Wife also testified that she would be at a home with a telephone and near medical and hospital facilities. Husband testified that he opposed Wife’s trip, even though he had never been to Ecuador or met Wife’s family. Husband testified that Ecuador is a third-world country and in the event of a medical issue, his daughter’s health insurance would not be accepted.  Furthermore, Husband testified that if some type of harm befell Wife, working to return his daughter back to the United States would involve financial and legal complications.

The trial court sided with Husband and denied Wife’s petition to travel overseas. Wife appealed and noted that Husband, by his choice, had not seen the child for a year and a half. Wife also pointed out that Husband had previously agreed that Wife would have sole legal custody pertaining to medical, educational, and religious decisions affecting their daughter. Wife further argued that the trial court’s decision amounted to an award, in Husband’s favor, of shared legal custody. 

In Pennsylvania, “legal custody” is defined as “the right to make major decisions on behalf of the child, including, but not limited to, medical, religious and educational decisions,” and “sole legal custody” is “the right of one individual to exclusive legal custody of the child.” 23 Pa.C.S. §5322(a). When one parent has sole legal custody, that parent has the final authority to make decisions, even if the other parent disagrees with that decision.

Here, by not allowing Wife exclusive control over the decision to take the daughter to Ecuador, the trial court effectively gave Husband shared legal custody. The Superior Court concluded that the trial court was wrong, because Wife had sole legal custody of the child; therefore, Husband was not allowed to prevent her from traveling with the child. If the parents in this case had shared legal custody and Husband expressed the same reservation regarding overseas travel, then it would have been more likely that Husband could have prevailed.

If you have questions about your custody arrangement and whether or not you are the sole decision maker for your child, you should contact an attorney. 

Written by Allyson Lutley, law clerk at the Law Offices of Linda A. Kerns, LLC.  Edited by Elizabeth A. Bokermann, Esquire, associate attorney.