Divorce is a complex and multifaceted legal process. The circumstances of your separation may involve alimony, child custody and support issues, determination and division of marital assets, insurance policy issues, and infidelity, all of which may have an impact on the ruling of your divorce.
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Hosted by: Dan Couvrette, CEO, Divorce Magazine
Guest speakers: New Jersey divorce and family lawyers - Amanda Figland and Shari Veisblatt. Amanda Figland has handled divorce, dissolution of civil unions, partition and child support and custody issues. She represents clients in grandparent and third party custody rights, prenuptial agreements, cohabitation agreements, mid-marriage agreements and paternity cases. She has also represented clients in domestic violence trials. Prior to joining Obermayer, Ms. Figland served as an appellant clerk handling appeals and matrimonial matters and emergent appeals for the Honourable Michael Patrick King, presiding judge, appellant division, West Mount, New Jersey. Learn more at: www.obermayerfamilylaw.com
Shari Veisblatt represents clients in all aspects of divorce, including complex matrimonial matters, which involve the engagement of a variety of experts, including forensic accountants, employability experts, real estate and personality appraisers, and custody and alcohol evaluators. In addition, Shari assists clients with valuation and distribution of businesses and professional practices and executive benefits, such as stock options and restricted stock. Named as 2010's Best Adoption Attorney by South New Jersey Magazine, Shari is a frequent lecturer on family life topics and has also written several published articles on her experience as a matrimonial attorney. Learn more at: www.obermayerfamilylaw.com
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Some of those factors that the court is going to look at are the age or the party, is this an individual who's young, who has the ability to go out and get a job in the future and therefore maybe does not need as much alimony from his or her spouse or is this an older couple who's divorcing and maybe they need a little bit more alimony? What are the health of the party, is one party disabled, is one party unable to work because of his or her health?
They'll also look at the education background of the parties: Does the party have a Master's degree and therefore maybe is more marketable than somebody who did not go all the way to get their Master's degree? They're also going to look at the incomes of the party: who was the superior wage earner during the marriage? What did the other party do who is not the superior wage earner? They’re going to look at those roles as well and the court may impute money for an income to the spouse that maybe wasn’t working during the marriage or maybe was working fulltime during the marriage, if the court deems that to be appropriate. What I mean by that is the court may say to the spouse who was earning less money, I think that you have the ability to earn a bit more than you were earning during the marriage.
They could also say that to the spouse who is the superior wage earner, I think that you have the ability to earn a bit more money and so they impute a higher income to the payor spouse—the spouse that will have the alimony obligation. The court is also going to look at the role that the spouses have in terms of their children when looking at alimony. So if there are children in the marriage, who has the lion's share of the parenting time with the children, who has the majority of the day-to-day responsibilities with the children? And that also is a look at the party's needs going forward. Alimony is really a need-based formula, meaning the court needs to determine what the needs are for the parties going forward. As for the payor spouse, you know what his or her monthly expenses are and for the payee spouse—the spouse that's receiving the alimony or spousal support—what their needs are and if those needs are going to be met by an alimony award.
So what happens if they're married and they have children and they move in with their boyfriend, does the other person still need to pay alimony and child support?
Veisblatt: So, generally the answer is yes. In New Jersey, most cases do not go to trial, which means that they settle by way of what's called a Property Settlement Agreement and generally parties will agree that alimony can terminate for a number of instances. For example, the death of either party will terminate alimony. The remarriage of the payee spouse, the spouse that’s receiving alimony, will also terminate the alimony. Now, if you move in with a boyfriend or a girlfriend, that's called cohabitation here in New Jersey. Our case law says that you may review alimony at that time and if you're able to prove that the payee spouse has moved in with a boyfriend or a girlfriend and they’re living in a relationship that may amount to a marriage, meaning you're sharing expenses, you're sharing child-rearing duties, you're taking out the trash, you're doing all of that fun stuff that you do in a marriage. The court may review the alimony awardand at that point they can determine if alimony should be reduced from what you and your former spouse agreed to and the agreement of what the court ordered if you ultimately go to trial or if it should be terminated at that point.
So just the mere act of moving in with a boyfriend or a girlfriend does not in and of itself terminate alimony; there are other factors that the court needs to consider. Now, certain agreements may specifically agree that moving in with a boyfriend or a girlfriend will have no affect on alimony, but that’s a personal decision that each party can make when negotiating his or her settlement agreement.
Figland: And these judgement applications can be very expensive, because sometimes private investigators are required to look into whether or not the parties are actually cohabiting or whether there's just a suspicion on the part of the former spouse.
Okay, so we're still in the topic of money, assets and property. How is it determined which of the property is marital and which is considered separate in New Jersey?
Figland: The way that marital property is determined in New Jersey is property is measured from the date of the marriage until the date the complaint is filed, so anything that was acquired by the parties during the marriage is considered marital property. One exception or one unusual feature in New Jersey is that if the property is purchased just prior to the parties’ marriage and it's purchased in anticipation of marriage, it can be pulled into the marital estate and that’s an issue that’s frequently raised in litigation. Premarital property is a difficult issue in New Jersey.
Frequently, parties come into a marriage with numerous assets, and if there's no prenuptial or premarital agreement, which determines that those properties are then separate, often the parties will fight over how that asset is determined and whether any portion of it can be considered marital. So, generally if marital funds are used during the marriage to support that premarital property by paying down a mortgage or by making capital improvements to the property, if those types of contributions are made from marital funds, then a premarital property can also be considered a marital property. Generally, that's how property is determined in New Jersey for purposes of divorce.
How is it then divided when they've determined which is separate property and which is marital property?
Figland: All marital property is generally 50/50 similar to all marital debt. So what we do with our litigation is we make a list of all assets that are acquired during the marriage and we make a list of all debts during the marriage, and it's a trade-off between who's going to take what asset. Generally, if an asset is listed in somebody's name individually, rather than having to separate property to transfer assets back and forth, generally that person will take those assets or keep those assets. Often we have cases where there are large retirement assets and maybe those retirement assets are just in the name of a husband or a wife and in that case we'd have to divide them by Qualified Domestic Relations Order, and we have to pay a specialist or an expert to actually come up with the language to divide and help us do the calculation to divide the retirement assets.
Veisblatt: It's important that the party who wants to keep a premarital asset separate, keeps it in his or her own name and does not use any marital funds to fund that premarital property. So like Amanda said, if a premarital property is an actual property and not just a bank account or an investment account, you don’t want to use marital funds to pay them the mortgage to make capital improvements on that property. If it's a bank account, it’s a little bit simpler; you can just keep that in a separate account in your name and not invest any marital funds in that bank account.
Now, inheritance that is received by the parties during the marriage is an exception to the rule. Inheritance that’s kept separately is that party's own property and that does not come into play in the division of marital property.
So, let's say somebody inherits a house, but the couple lives in the house for 20 years and fixes it up and keeps it up, that then becomes community property or how is that treated? Or marital property?
Veisblatt: It would become marital property, except that because we're a court of equity, it may not be divided 50/50. So our general rule is that there's a 50/50 division, except that since we are a court of equity, the court is going to balance the equities in the case and see if it's fair and equitable to divide that premarital or inherited property 50/50. So, there are a number of factors that the court looks at under our equitable distribution statute as well.
Figland: And we should also mention that when businesses (which are considered marital property) are divided, very frequently whoever is the one who's efforts result in the success of the business will get a disproportionate share, maybe 70% to 30%, rather than a strict 50/50 division of that asset.
So, going back to the home for a moment, people are often concerned about leaving their matrimonial home if they're getting a divorce or thinking about getting a divorce. Should they leave their matrimonial home or stay in it?
Veisblatt: This is one of the questions that I think Amanda and I get asked most frequently. When people are contemplating a divorce, it's uncomfortable to stay in the marital home with his or her spouse. And so people are always concerned that if they leave the house, they're giving up the equity that they've acquired in the house over the years of the marriage and that's not accurate, meaning you can absolutely leave the house during the marriage and not give up the equity that you have in the house. However, with that being said, we always advise clients that if there are children involved, do not leave the marital residence until you have at least a temporary parenting time schedule. You don’t want to leave the house and then to need to file what's called a motion with the court to request to see your children.
So, prior to leaving, you should make sure that there's a parenting plan in place that you know that you're going to have time with your children at the house that you're staying in, maybe the temporary residence pending the outcome of the divorce. And you want to have some financial agreements also in place: who's going to continue to pay the mortgage, who's going to pay the taxes, who's going to pay the electricity? So, I would never suggest you just pick up and leave without this plan in place. However, in New Jersey, if there's a domestic violence incident in the house and the court finds that there should be a Restraining Order entered against one of the parties, then the parties cannot remain in the marital residence together; the court will decide who gets to stay in the house and that other party will be forced to leave the house if there is a finding of domestic violence and there's what's called a Final Restraining Order entered in the case.
Aside from cases where there is domestic violence, can you make your spouse leave the house?
Veisblatt: Generally, no. So, in New Jersey, you have equal rights to the marital residence, no one has a superior right to the other, so it's highly unlikely other than domestic violence to have your spouse leave the house during the course of a litigation and Amanda and I appreciate that it's very uncomfortable to live with a spouse pending a divorce. And that's the other question we always get asked: How quickly can I get my husband or wife out of this house? And, generally, we have to tell them you can't until the end of the litigation.
Figland: Or until the house is sold. So, if the parties agree to sell the house, before the matter is resolved, that’s one way to separate the parties and then you would hold the funds in escrow while we're working out the details. But if you can get the other side to agree, that's the other way out.
Right. Let's move on to child custody. Can you tell me how the court determines child custody in New Jersey?
Figland: As with the alimony statute, there is a statute for custody and it lays out numerous factors that the court must consider when determining custody of the child. And these factors involve just how well the parties get along with each other, as well as whether there's a history of domestic violence. The fitness of the parties is always one of the primary considerations, if there's any allegation that one or both parents are unfit, those issues will be raised and considered by the judge. Whether the child is safe under the circumstances of the residency with either parent and the geographical proximity of how close the parents live to each other. Those are the numerous factors that the court considers and in every case where the court is making a ruling, they will go through each of these factors.
The child's age matters, when the child is at least 12 or 13 years old, the court can interview the child and consider the preference of the child among the child custody factors, but it is a very fact sensitive and every custody is matter is different. The facts that are presented in the litigation and the court has to wade through this information and make a determination. Sometimes, they're assisted by expert testimony, but if the parties can't afford it, then the court has to just listen to the evidence and make a decision.
Veisblatt: Overall, the court is guided by the best interest of the children. So that’s really the overlaying theme in custody cases, what is in the child or children's best interest moving forward? That's a decision the court is going to make.
And how is it determined what the amount of the support payment would be. Is there a guideline for this?
Veisblatt: Yeah. So, in New Jersey, although we don’t have alimony or spousal support guidelines, we do have very comprehensive child support guidelines. The child support guidelines are also made up based on a number of factors. The court's going to look at dad's income and mom's income and they're going to plug those gross numbers into the guidelines. Then they're going to look at the age of the parties. They're also going to look at who pays for the health insurance for those children, the party who pays the health insurance for the children, will get a credit on the child support guideline, but only for the amount that they pay for the children.
So, for example, if they have a family plan and that dad or mom are included in the family plan, they will only get a credit for the amount that they pay on behalf of the children. They're also going to look at how many days is dad with the kids and how many days is mom with the kids? And the more overnight parenting time that one party has with their children, the less that they pay in child support, meaning the more time you're with your kid, the less you pay to the other spouse or the other party for child support, because you're with your child more. Those are some of the main factors that go into calculating child support. Now, if you have affluent parties and they're earning a substantial income, the court then has the discretion to go above the child support guidelines. So, what the guidelines tell us is the appropriate support amount.
Figland: Shari is bringing up one example of where the court does sort of take the guidelines and then adds this additional amount, which goes by another series of factors. But there are applications that we make our settlements that we negotiate where just abandon the child support guidelines. And when we do that in New Jersey we're very clear in our agreements as to why we're doing it and we usually provide some income information as well, so that if one or both parties wants to come back and have that modified, the court at least have some information to determine child support in the future. It's a high burden, though, if you go into court and say, “I don’t want the guidelines to apply”; the courts will generally just follow the guidelines and it's primarily based on income and some of the other expenses for the child.
Right. Anybody who's listening to this teleseminar, if you're thinking of doing your own divorce, I would caution you that as we're talking just how complicated it is and how things overlap in terms of issues and cases and it's never easy for a person on their own to into court and try and do this on their own. So, I do recommend that you talk to professionals like we're listening to today. We're going to move onto infidelity; of course it's an issue for some people who are going through a divorce. What if one spouse finds out that the other one has been unfaithful, do they have to go and gather evidence to kinda make their case and does it really matter in the end anyway? Will they get more alimony or some benefit by proving that their spouse has been unfaithful?
Figland: We always counsel our clients that infidelity does not result in more or less alimony. It's not one of the factors for alimony, except in extreme cases. If infidelity is somehow linked to a financial benefit to one of the parties, then it does become relevant in the divorce case. For example, if someone's having an affair and they are either supporting a new girlfriend or boyfriend or if that girlfriend or boyfriend is supporting them, then it obviously becomes a relevant factor in the case and then that person's girlfriend or boyfriend can be deposed in the litigation and information can be obtained from that individual.It does not matter so much for the cause of action and I don’t remember the last time we filed a complaint for adultery, because the burden is fairly high; you have to list the times and the opportunities where this couple may have been physically involved with each other and that's a high burden. It would require a private investigator and a lot of money could be shelled out just to get to those facts, which are not very helpful for the cause of action. Primarily, we plead irreconcilable differences, extreme cruelty and various other factors, but rarely do we use the adultery complaint or put that in our complaint as a cause of action, because the burden is so high and because it is a financial drain on your client.
Right. I'm going back to money issues for a moment. Of course, health insurance is a hot topic these days and people are concerned about having insurance. If they're going through a divorce and they were on their spouse's health plan through their work, will they still be covered by that plan after they divorce?
Veisblatt: Well, the short answer to that is no. Generally, once a judgement of divorce is entered in a case you are no longer eligible to be on your spouse's healthcare plan. The important thing to know is that while you're going through the actual divorce—and sometimes that can take up to a year or more than a year in certain circumstances—your spouse has to continue to maintain you on his or her health insurance plan. So, you're guaranteed that while you're going through the divorce process, that you will be covered, which gives you additional time to get alternate coverage or get coverage through your employer.
If you are not working, your spouse will be likely ordered to apply for COBRA benefits on you behalf, or at least cooperate and generally you can obtain those COBRA benefits for up to three years following the judgement of divorce. That's another factor that goes into alimony: how much are you going to have to pay for your private health insurance or COBRA coverage following the divorce? So, that’s another factor. In New Jersey we have something called divorce from bed and board. And a divorce from bed and board is not an absolute divorce, but it settles all of the issues that a party would have in a regular divorce.
And why some parties like the divorce from bed and board, is that they can still stay on their spouse's health insurance plan following the entry of this divorce from bed and board. Now, certain health insurance companies will not recognize the divorce from bed and board. They say to them it's an absolute divorce and they won't cover the other spouse on health insurance. Other companies agree that it is not an absolute divorce and that that spouse can continue to be maintained. So, we've noticed actually more clients now getting divorced from bed and board, so that they can stay on the their spouse's health insurance policy after the entry of this divorce from bed and board.
So, sticking with the theme of insurance, let's talk about life insurance just for a moment. Does a person need to have life insurance if they're getting a divorce?
Veisblatt: Well, it isn't that they have to have it, but we always recommend it for several reasons. Number one: if you have young children in a case and one party is going to be paying child support to the other, you want to secure that child support award. So, God forbid, one client dies when the children are still young, that other client may not have enough funds to continue to raise that child, may not have enough money to make sure that that child gets the education that that child should receive. So, we like to secure any financial award, whether it be spousal support, whether it be child support, so if one party should pass, that the children or that other spouse who's still being supported by his or her former spouse, will receive a lump sum of money that they can then invest however they see fit, and that we've not secured the funds that they are planning on receiving from the other spouse.
For example, if you negotiate that one spouse will receive ten years of alimony and that spouse dies after two years of paying alimony, there's eight years there that the other spouse never received. We would secure that with a life insurance award, so that way the client gets what he or she bargained for. The same thing with child support, if you are planning on receiving support, you know for your children through college and the spouse dies, there are a number of years where you're not getting any support from the other spouse and, again, that can be secured with a life insurance policy. It makes clients feel more comfortable moving forward, knowing that there is that security.
Now, some spouses don’t know what the other spouse makes or maybe they claim part of their income on their tax returns, but don’t claim all of their income on tax returns. So, how do they really know how much their spouse really earns?
Veisblatt: So, there are several ways to do this. Once you file a complaint for divorce, you have subpoena power and you can start to send subpoenas to various banking institutions, to maybe that spouse's employer, to get an idea of what that spouse earns. If you have a really complex case and you have a husband or a wife who's self-employed, who maybe is under reporting, who maybe is hiding income, hiding assets, we would always recommend that you retain what's called a forensic accountant. That forensic accountant is trained to go through bank account records, credit statements, any information that we can give to them and start to build an idea of what that spouse is earning.
We always like to retain forensic accountants early on in the case, because they're the ones who will guide us with what information they need to tell us what their spouse is earning. And it's amazing what these accountants can do. Amanda and I have worked with so many forensic accountants over our careers and we always have clients come to us and they say, “My wife gets paid under the table, gets paid in cash, hides it under the mattress,”—we've heard it all. And these people, for the most part, find that money, they do amazing things when they go through bank accounts. Another helpful tool that they use in family law cases is looking at the case information statement.
The case information statement tells the court how the parties lived during the marriage, what did they spend on their mortgage, what did they spend on their food, what did they spend on restaurants, clothing, hair care and it goes down to what these parties spent every month. So, if you have an individual who's spending $20,000 a month on various expenses and says that they only earn $5,000 a month on their income tax return, well now you know that you have an issue. And you need a forensic accountant to show why that $5,000 a month is not the accurate number, when really they've been living a much greater marital lifestyle.
So, can you give me some tips for somebody who’s just heading towards a divorce? Is there any particular tips that you would give to the person as they're starting this process?
Figland: Yes, but the person who is facing a divorce litigation primarily, initially, needs to get organized. They need to figure out where their financial records are, they need to try to get some information, if they can, about what their spouse earns and what assets their spouse has. We often get into a divorce litigation and we need to file a temporary motion, because the dependent spouse, if we represent the dependent spouse, may be cut off, as soon as the divorce action is either initiated or is clearly coming down the pike. Very frequently the spouse who has more income will stop paying the expenses of the dependent spouse and, so, very often when we file a complaint for divorce, we also have to file a temporary application to make sure that we're protecting the dependent spouse and maintaining the status quo in the litigation.
And when we file those applications, the more information we have, the better. So, the primary tip for anybody that thinks they're heading for a divorce is to start getting organized and to start accessing the information or making photo copies of information, so that they're prepared and so that they're ready to go, because there's nothing worse than facing a financial emergency and having a panic that you can't pay all of your bills. That gives the other person such a leg up in the divorce litigation and we want our clients to have comfort and to be ready for those circumstances if they arise.
Veisblatt: We also like to tell clients in terms of custody issues in a particular case, that if you're getting ready to file for divorce, make a list, keep a diary, keep a log about what you did or what you do with the children and what you did prior to the complaint for divorce. Are you the parent who cooked breakfast, who packs the lunch, who goes to the karate after school, who takes them to their extracurricular activities? Start to keep a log of what you did for the children, because it's very surprising that as soon as a complaint for divorce is filed, that maybe the mother or the father who weren't so involved with the children before the divorce complaint was filed, all of a sudden become very involved. And then it's almost difficult sometimes to prove that you were the more involved parent prior to the complaint. So, if you start to write down everything that you do or did for the children, it's easier if the case ever goes to trial to be able to talk to the judge about it, because a year later you might forget what your status quo was with the children when they were younger.
And as you both have already mentioned, most cases don’t go to trial, but you still need to gather the evidence to prove your case, so that when you're negotiating with the other side, that you're making your best case possible to avoid going to court I'm assuming and also to make sure you get the best deal for yourself and you family as well right?
Veisblatt: That’s correct.
So, the term Early Settlement Conference, I've heard the term before, can you tell me what it is and what? Do people have to go to an Early Settlement Conference as part of the divorce process?
Figland: Yes, in New Jersey it is a mandatory part of the court's schedule. So, when we initially file a divorce complaint and an answer is then filed, we'll get a Case Management Order from the court and that order will provide a period of time for discovery and then we'll set an Early Settlement Conference or an Early Settlement Panel in New Jersey or Matrimonial Early Settlement Panel, depending on what part of the state that you're in. They're most often family law practitioners in that county and they're familiar with the judges and they provide recommendations.
They receive panel submissions in advance of the settlement conference, they make recommendations while the parties are there, depending on what part of the state you're in, they'll either pull in all the lawyers and the parties and speak directly to everyone in the room at the same time or they will speak primarily to the lawyers and give a recommendation. A lot of settlements do occur from the MESP or the ESP, but even if the case is not settled, it's still very helpful in the case for future settlement to have a recommendation by experienced practitioners and then these recommendations, you provide the information to your client, you say these are what it's recommended in your case.
So, of course when people are considering a divorce or they're in the process, they're wondering how soon will I be divorced? Can they shorten the process in any way or are they kind of stuck with a timeframe that’s predetermined?
Figland: The courts in New Jersey move cases pretty rapidly. The period of time, at least six months, maybe seven or eight months for a standard case in New Jersey, before the case will be resolved. The only way to really shorten that schedule is to settle the case. So, practitioners in New Jersey very frequently meet informally, we call them four-way conferences, it's in advance of the MESP or ESP in an attempt to resolve the cases, but the only way to shorten the process is to settle the case.
Veisblatt: And in New Jersey, under our best practices, we are mandated to try to resolve all divorce matters within one year. As Amanda said, we generally don’t even get to the one-year. Certain counties that are a little backlogged and some divorces in New Jersey do pass that one-year timeframe, but they exceed it by far.
And some of our listeners may be considering or may have heard of mediation as a possible way to do their divorce. Could you just briefly explain what mediation is and tell me if a case involves complex issues, can you use a mediator or is it just for more simple types of divorce related issues?
Figland: A mediator is very often a private mediator, there are all different levels of alternative dispute resolution that the court sets up. We also use private mediators during the course of the litigation if we have we've gone to the Matrimonial Early Settlement Panel and that has not resolved the case, we will sometimes encourage the clients to spend the money, split the costs and go to a private mediator, just to get another opinion that may help us to resolve the case. An experienced mediator very often does help to get a resolution of the matter, because if our counsel are familiar with that mediator and they know this person is a practitioner in that county and is very sophisticated in their field, that person's recommendation can help settle a matter.
So, I guess the final question I'm going to ask you kind of ties things up here. Somebody's getting a divorce and they're wondering, a woman I'm assuming, if they can change back to their maiden name? All is complete now, can I have my name back, is that possible in New Jersey and how do you it?
Veisblatt: Absolutely, and it's actually easier to change your name back to your birth name during the divorce litigation. So, during your judgement of divorce hearing, which is sometimes called the uncontested hearing if you've settled your case, you can request that the court resume your birth name. And to do so you have to certify to the court that you're not doing this because you are trying to avoid creditors who may know you by your married name, or that you're not doing it to avoid criminal prosecution, and that you're just doing it because you're going through a divorce and you would like your birth name back. You can have that done on the same day that you're divorced. Now, if you are divorced and you do not request that from the court, you can later after your divorce, file and application with the court to resume your birth name. The standard at that point is a little bit higher, but it's still not a complicated action to bring before the judge.
Figland: The only nuisance with doing a post-divorce name change is that there are probably publication requirements. So, in advance of going before the court and changing your name, if you're just doing a name change not related to a divorce, you have to publish that request for a name change in local publication. So, we do encourage our clients to consider and to decide at the time they're getting divorced if they want to resume their maiden name.
Certified Divorce Financial Analyst
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