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Financial Aspects of Divorce in New Jersey CPE for CPA given at Acorn Finanacial on 12/7/10

Financial Aspects of Divorce in New Jersey CPE for CPA given at Acorn Finanacial on 12/7/10

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