Category Archives: Family Law

What to Do When COVID-19 Impacts Your Alimony or Child Support

Word FAMILY LAW composed of wooden letters.

With the COVID-19 pandemic rattling our work, home, social, and personal lives at a rapidly-evolving pace, many families are dealing with unprecedented financial insecurity and uncertainty. This can be even more intimidating and confusing for divorced and separated families, where oftentimes there are court-ordered or contracted legal obligations that are challenged in the wake of these tumultuous financial times.

As a recipient of financial contributions incident to a divorce or dissolution, it can be daunting to worry about whether your ex-spouse or ex-partner will be able to continue to meet those obligations. Those obligations include things such as alimony, child support, or other monetary contributions to your family, such as payment towards college tuition or health insurance premiums. Unquestionably, folks rely upon those contributions in order to meet their needs and the needs of their family so it is understandable to want assurance that those contributions continue.

At the same time, an individual who is legally obligated to pay money to an ex-spouse or ex-partner may be experiencing a decline in their discretionary income as a direct result of the COVID-19 crisis. In both New Jersey and Pennsylvania, the governments have shut down or deeply curtailed almost all non-essential business practices, sidelining a large segment of the working class, through no fault of their own. Many individuals have taken pay cuts, are working reduced hours, have been forced to use PTO or sick time, or, in the worst case scenarios, have stopped working altogether, without pay. If this occurs, it can render it challenging, if not impossible, to satisfy all expenses in full and on time, including expenses like alimony or child support. Many folks find themselves faced with the difficult decision of choosing which bills to pay out of a limited supply of cash: Do I pay my mortgage in full, and slash my child support? Do I pay for health insurance, and skip my alimony? Should I stop paying anything to my ex until this is over? Can I just socially-distance myself entirely and hope this all goes away on its own?

These questions are valid, and there are equally compelling arguments on both sides as to how these issues should be addressed. Folks relying on the support of an ex-partner want (and need) to be paid, and folks obligated to provide support to an ex simply might not have the funds available.

If you find yourself on either side of this equation, it is important to address the situation early on before it spirals out of control. While rushing to initiate litigation might seem premature or perhaps not cost-effective, nonetheless you also don’t want to ignore the situation or engage in self-help mechanisms that do more harm than good. Below are some options for dealing with financial complications or disputes with your ex-spouse or ex-partner brought about by the COVID-19 crisis.

One good place to start is by opening the lines of communication with your ex-spouse or ex-partner. Transparency and honesty will go a long way towards understanding the situation from both sides. If you and your ex are able to reach an interim agreement about continued (but perhaps reduced) financial support on a short-term basis, you should contact an attorney who can codify that agreement into an appropriate legal document. This enables you and your ex to amicably reach an agreement without court intervention, which saves you both time and money, while also ensuring that your agreement is legally-enforceable should problems arise in the future.

If you and your ex-spouse or ex-partner are not in regular contact, have an acrimonious relationship, or simply cannot agree on a resolution, then it might be time to consult with an attorney. Your attorney can suggest interim financial arrangements that can be presented to your ex in the hopes of reaching an agreement. Sometimes all it takes is a little nudge from an attorney to compel both sides to put in the effort to achieve a resolution to emergent situations. If this is successful, then the agreement would be summarized in a legal document and made binding.

If all else fails and you and your ex-spouse or ex-partner cannot reach an agreement even with the assistance of attorneys, it might be necessary to seek court intervention. Despite the COVID-19 pandemic, most courts are attempting to operate as close to “normal” as possible, seeking to ensure that folks still have access to the judicial process as needed. The family courts are equipped to receive filings electronically and to schedule court appearances via telephone and video conferences.

In both New Jersey and Pennsylvania, there are laws that permit an individual to petition for a modification to their alimony or child support if that person’s financial circumstances have changed. A loss of income or cash flow due to COVID-19 could be viewed as a substantial, involuntary, and unforeseen change that would justify the court evaluating the situation to determine whether to provide appropriate relief. As the COVID-19 situation is unique as far as its widespread financial impact on New Jersey and Pennsylvania families, there is little precedential guidance to help us understand how the courts might respond to petitions regarding alimony and child support issues. However, below are some possible outcomes that might result from such litigation:

  1. The court could grant a temporary reduction to an obligor’s alimony and child support payments, with a mandatory re-evaluation to take place in 1-2 months, at which time the support figures could be increased back to their original amounts.
  2. The court could keep the alimony and child support at the same rate, but could suspend enforcement and collection efforts. Any deficiencies in payments would continue to accrue as “arrears” and the obligor would be required to pay back those arrears at a later date. Essentially, this would enable the obligor to pay less towards their obligations during the financial crisis while ensuring that the recipient of support is ultimately made whole at some point in the future.
  3. The court could look to alternative financial resources for both parties, examining each party’s respective access to alternate sources of cash. This could include exploration of lines of credit, loans against retirement assets, trust distributions, advances on inheritances, or relief to one or both parties under the Federal CARES Act. While every family’s situation will be unique, it is hoped that the courts will explore every option for getting folks through these tough times.

These are scary situations that are facing many people throughout our community right now, and it is completely understandable to worry about keeping your family financially secure while you also manage your family’s physical and emotional well-being, as well as your own. If you find that your legal rights or obligations pursuant to a divorce or dissolution have been negatively impacted by COVID-19, you should consult with an attorney today. Through diligence, advocacy, and creativity, it is possible to develop a plan that can help you and your family navigate these uncertain times with an emphasis on positive and fair results.

Know that you are not alone.

gambone_angie
As a shareholder and member of the firm’s Family Law Department, Angie Gambone concentrates her practice in the areas of complex family law, divorce and custody matters. She also focuses her practice on adoption, family formation and the family law needs of nontraditional and LGBT families. Angie can be reached at angie.gambone@flastergreenberg.com or 856.382.2217.

 

 

To serve as a central repository of information and contributions from Flaster Greenberg attorneys on legal developments during the COVID-19 crisis, we have launched a COVID-19 Resource Page on our website.  Feel free to check back frequently for Flaster Greenberg’s ongoing analyses of important legal updates that may affect you or your business. 

 

 

 

 

 

New Jersey Toughens Laws for Divorced Parents Wanting to Relocate their Children Out of State

Moving boxes with family.jpgA major New Jersey Supreme Court decision has made it more difficult for custodial parents to move their children out of state. The ruling calls for stricter legal standards to be applied by the New Jersey Judiciary in order to establish “cause” in all cases when a divorced or separated parent seeks to relocate from New Jersey with the minor children of the marriage without the consent of the other parent.

Prior to this decision, there were two standards that were applied:

  1. A lesser, more flexible standard when one parent is the parent of primary residence and the other is the parent of alternate residence, and
  2. One when the parties equally share legal and residential custody.

In the former, the lesser requirement was that the parent only had to demonstrate “good cause” for the move and that the move was not “inimical to the interests of the child”, and the burden to oppose the move then shifted to the objecting parent. In the latter, the parent had to demonstrate that the move was in the best interests of the child.

In the recent Bisbing v. Bisbing decision, the Court repealed the separate standards. The Court mandated that in all cases where a parent seeks to relocate from New Jersey with the minor child(ren) of the marriage without the consent of the other parent, the courts must conduct a best interests analysis to determine “cause” to determine whether the relocation is in the best interests of the child(ren). The Court is to apply the statutory factors set forth in N.J.S.A. 9:2-4 and other relevant considerations to determine whether the relocation is in the best interests of the child(ren) involved. This analysis must be performed whether custody is equal or whether one parent is primary.

The Court noted in its decision that adopting this singular standard may avoid disputes as to who should be the primary parent when it is clear that one parent is in a better position to serve that primary role. It would further avoid accusations that the designation was sought to facilitate the ability to move the child(ren) out of state.  The decision to move must now be proven to be in the best interests of the child(ren), rather than the parent.

The impact of this decision will have far-reaching effects, and will likely raise questions among divorced parents considering and/or opposing a proposed out-of-state move. For more information on this decision, or if you have questions on how your family may be impacted, we invite you to contact Steven B. Sacharow, or any member of our Family Law Group.

Flaster Greenberg’s Family Law Practice draws on decades of experience in the ever-changing legal landscape that affects the family dynamic. Our family law attorneys serve as advocates for our clients, providing guidance on virtually all family law-related issues including divorce, custody and parenting time, child support, spousal support (alimony), equitable distribution of property, same sex relationships, prenuptial agreements, adoption and family formation, and mediation and arbitration. 

Steve Sacharow, Flaster GreenbergSteven B. Sacharow has substantial and extensive experience in family law and is nationally recognized for his work. His representation of clients includes matters involving child custody, parenting time, child support, alimony and equitable distribution of assets. It also consists of legal aspects of relationship formation including cohabitation and prenuptial agreements. His family law practice further includes representation of individuals involved in same sex relationships, including cohabitation agreements and dissolution of relationships, involving both civil unions and non-formalized relationships, as well as mediation (as a mediator and representing clients in mediation) and collaborative divorce.  Additionally, his adoption practice is comprised of domestic and interstate adoptions, agency or private, and he has extensive experience in the litigation of contested adoption matters. He can be reached at 856.661.2272 or via email.

5 Things to Keep in Mind When Planning for a Divorce

Part I of a II part article 

As Neil Sedaka said, breaking up is hard to do. When planning for a divorce, a careful and calculated approach is required to protect your interests. This article will highlight 5 things to consider based on our firm’s decades of handling these cases, both in court and in private resolutions. These tips focus primarily on New Jersey’s divorce laws and procedures. Divorce laws vary from state-to-state, but these tips are generally helpful to a wide range of divorce situations.

  1. Keep Good Records

Maintaining good records is incredibly important when facing a divorce. You should anticipate that your pay history, assets, and liabilities will be thoroughly analyzed. Be prepared to exchange hundreds of pages of documents during the divorce process. If you have a financial advisor, accountant, or investment broker, let them know you’re getting divorced and ask for their assistance in putting together an outline of your assets and liabilities. A caution, however: check first to determine whether your professional, due to company policies, will feel or be obligated to advise your spouse of the contact, especially if they are a joint professional. You should also determine if your professional will be required to place a freeze on the liquidation of your assets once they are informed of a pending divorce. If your divorce is litigated in the courts, you will need to prove, usually through documentation, your assets and debts. The more organized you are, the more credible you will look at a trial. It is also a cost-saving benefit to you if you can provide the information to your counsel rather than expending attorney or paralegal fees to obtain the information.

  1. Don’t Hide Things

This is the flip side of item 1, but it’s a concept that needs to be reiterated because it surfaces time and again in these disputes, usually to the detriment of the “hider.” In divorces, the other side is entitled to complete transparency and full disclosure with respect to your income, assets, and debts. A broad “discovery phase” in divorces allows each side to obtain documentation and information from the other side, and pretty much nothing is off limits, especially financially. In high asset cases, you can anticipate that the discovery phase will be lengthier and more complex as the other side tries to uncover as much information as possible. It can be tempting to try to hide things, such as a significant upcoming bonus or a recent investment acquisition. Any semi-attentive attorney on the other side is going to look for these types of omissions. Once a judge learns that you have tried to hide something, your entire case will be tainted and you will have negatively affected your credibility. If your case goes to a trial, a judge may have a hard time ruling in your favor if he or she thinks you have purposely tried to mislead your spouse and the court by hiding assets or income. Therefore, it’s best to be open and honest about your income and assets with your attorney, and leave it up to her or him to work with you to fashion the strategy to achieve the best outcome for you.

  1. Don’t Understate Your Marital Standard of Living

As part of the divorce process, you will be required to complete a document that outlines your marital standard of living. In New Jersey, this document is called a Case Information Statement, or CIS. In the CIS, you must list what you spend each month on fixed expenses, such as a mortgage, car payment, and utilities, as well as your fluctuating expenses, such as food, clothing, and entertainment expenses. These expenses are then tallied to determine your approximate monthly marital standard of living. Courts use the marital standard of living mostly to determine a party’s spousal support (alimony) entitlement or obligation. To try to lower the alimony, it is not uncommon for one spouse to purposely attempt to under-value their monthly expenses. For example, although they may know that the family eats out several times a week for $150 per dinner, a spouse might claim on their CIS to only spend $100 per month on dining and restaurants, when in reality the figure is closer to $1,000. Under-stating the marital lifestyle can lead to excessive litigation as the courts will require proofs to determine the true expenses. It is usually not that difficult for the other side to prove the marital lifestyle, either through receipts, credit card statements, or witness testimony. Here again, if a judge realizes that a party has purposely tried to under-value the marital standard of living, that person’s credibility will be greatly damaged. Therefore, when outlining the marital standard of living, carefully analyze what happens with your net monthly income and make sure that the monthly standard of living is on par with that figure. If you bring home $20,000 net per month and you claim your marital standard of living is only $7,500 per month, be prepared to show the court that you have accumulated approximately $12,500 per month in savings. Otherwise, something won’t add up.

  1. Make Sure Your Standard of Living Matches Your Historical Earnings

Similar to the tip above, you should also be careful that the marital standard of living you disclose to the court is not so high that your purported income could not satisfy that type of lifestyle. This is most common for entrepreneurs and business owners who are not typical W-2 wage earners. If you or your spouse tell the court that your marital standard of living is $8,000 per month ($96,000 per year), but your tax returns show gross income of only $65,000 per year, it becomes obvious that you have not fully disclosed your income. Courts are savvy to the many ways that business owners and sole proprietors can decrease their gross income “on paper,” so don’t expect the judge to simply rely on your tax returns for income determination purposes. If your spouse can prove that you’ve enjoyed an upper-middle-class lifestyle for the past ten years, it’s going to be very difficult to convince a judge that you earn minimum wage. Once again, if you attempt this approach, your credibility is shattered.

  1. Understand the Expanding Definition of Income

Many professionals have complex compensation packages that become particularly relevant during a divorce. Things like paid vehicles, expense reimbursements, travel and accommodations, or stock options can all be analyzed and included as part of your income when determining your alimony or child support entitlement or obligation. It is not uncommon to find yourself in court arguing over whether or not a particular benefit should be included or excluded from your income when determining your financial entitlements or obligations incident to a divorce. It is helpful to provide your attorney, and often the court, with your complete employment contract and any other documentation that demonstrates your salary and perks. Bonuses are another frequently-litigated issue. Don’t assume that just because your bonus is “discretionary,” it will be excluded from your income. The court will instead look to prior years; if you’ve consistently earned a bonus, you can expect that it will be included in your income. To the extent that you can demonstrate that your bonuses have fluctuated over the years, the court may average them and then increase your base pay by the average bonus figure. To assist your attorney in limiting your spouse’s attempts to overinflate your income during the divorce process, be as candid and detailed as possible about the myriad ways you are compensated for your work.

** Part II of this Installment Series will be presented in Flaster Greenberg’s next Litigation Newsletter, due out in early spring. **

 

Angie Gambone is a member of Flaster Greenebrg’s Family Law Department concentrating her practice in the areas of complex family law, divorce and custody matters. She also focuses her practice on adoption, family formation and the family law needs of nontraditional and LGBT families. She can be reached at 856.382.2217 or angie.gambone@flastergreenberg.com.

 

 

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