New Jersey Divorce Lawyers
14 Cliffwood Avenue,
Suite 100
Matawan, New Jersey 07747
Tel. 732-696-2500
Fax 732-696-2499
www.tvelaw.com
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New Jersey Divorce FAQs
What are the most common financial mistakes in a divorce? Answer: The following represent the ten most common financial mistakes that people make as they proceed in a divorce action. 1. One of the most time consuming and costly aspects of divorce is the process of gathering information and documentation, commonly referred to as “discovery.” This process can be greatly reduced if a divorcing litigant would thoroughly inspect the contents of his or her home and make copies of all documents contained therein. Admittedly, this is a daunting task. Many people do not wish to engage in this task. It is time consuming and costly. However, the time and cost associated with inspecting one’s own home and copying all documents is far less than what will be spent if the same information and/or documents must be obtained through formal discovery in the course of the divorce litigation. 2. Another discovery related issue concerns a party’s obligation to fully and completely answer all interrogatories (formal written questions exchanged in the course of litigation) and respond to applicable document demands. Again, this is a tedious and time consuming task. Many litigants do not wish to take the time necessary to completely respond to discovery. This causes multiple problems, including, but not limited to increased costs when attorneys are required to work extensively with litigants to fill in the blanks. This also leads to the submission of incomplete information to adverse counsel, which may result in motion practice, sanctions, limitation of claims and possible counsel fee awards. Further, if all of the relevant information is not produced, a litigant’s individual claims cannot be fully presented to the court. One of the biggest tools that any attorney has is correct and updated information. Without that, it is virtually impossible to achieve a client’s desired goals within the litigation. 3. A divorce litigant must work closely with his or her attorney and conform his or her expectations to the law and facts that can be proven. Interjecting emotions or preconceptions as to one’s entitlement to alimony, child support, property or other financial issues will only serve to prolong the litigation, increase the costs and ultimately result in great disappointment by the litigant at the end of the case. These financial issues are assessed by a court based upon statutory factors as interpreted by case law. Therefore, the court must consider many different elements and factors before rendering a decision as to these financial issues. Emotions such as anger, fear, betrayal or revenge will not factor into the court’s decision. A litigant should not make decisions based on those emotions either. 4. The law in New Jersey has evolved to the point where fault has little or no relevance in divorce litigation. It is a common error for people to make decisions about financial issues in a divorce based upon their perception of why the marriage broke down. This is a serious error. 5. The most important document in a divorce case is the Case Information Statement (“CIS”). It is the document that a court will usually seek to review first when making any financial determination, whether it’s during the pendency of the case or at final hearing. It is the document that an Early Settlement Panel (“ESP”) will seek to review when giving recommendations as to the ultimate outcome of the case. It is also the document that a mediator will seek to review in assisting parties to resolve their case. It is essential that the divorce litigant take special care to thoroughly and accurately complete all portions of the CIS and, after it is completed, diligently review the CIS on a periodic basis to see if any information has changed and advise his or her attorney in a timely manner. 6. Failure to select the correct lawyer can be a problem. There are certain attributes that you should look for in a divorce attorney in general. For example, whether they are certified by the Supreme Court of New Jersey as a matrimonial attorney, whether they are a member of the Executive Committee of the Family Law Section of the New Jersey State Bar Association and whether they write articles and/or frequently lecture to the bench, bar and public. However, when there are complex financial issues, it is advisable to select an attorney who has written or spoken on related topics. If a divorce involves complex financial issues (such as the valuation of a business or other unique asset), it is not advisable to retain an attorney who concentrates his or her practice in child related issues. 7. One of the key factors or elements in most divorce cases is the “marital lifestyle.” An attorney needs need to adequately present how the parties lived during the marriage. Did they live in a low, middle or upper class lifestyle? A divorce litigant should, at a minimum, gather all spending records as to the parties’ personal spending during the last three years of the marriage. This would include bank, credit card and brokerage account records as necessary. These records should be summarized by the client to show the actual expenditures broken down by the various expense categories as contained within the Case Information Statement. This personal spending summary (with all documentary backup) can then be used to adequately complete the Case Information Statement and present the parties’ lifestyle to the court. Marital Lifestyle is critical to alimony, child support and other support obligations. Failure to do so is a critical error. 8. Divorce litigation requires strategy. An essential aspect of any strategy is a clear delineation of one’s goals. Assuming that the goals are reasonable and in accordance with the law (pursuant to the advice of one’s counsel), the goals then become the target at which all preparation is aimed. The preparation of goals will focus the litigation so that time, money and resources are not expended on activity which is not directed at the litigant’s goals. 9. Family members and friends can be great support systems for someone going through the emotional roller coaster of a divorce proceeding. Relying on those same friends and family members to sculpt your opinions on legal issues can be catastrophic. Use your support system to aid you when the emotions of the divorce are becoming too all consuming. But allow your attorney to advise you on the legal issues and principles. 10. The internet can be a wonderful thing when you are looking to buy an old big wheel, add onto your collection of original lego pieces or find a street map of a town you will be visiting. Do not however, allow the internet to guide you in your divorce proceeding, which is what you have your lawyer for. Avoiding these errors will greatly improve the likelihood that a divorce litigant will achieve his or her goals in their case.
My spouse has stock options at his work, are those considered to be an asset to be divided during our divorce?” Answer: Although the extent of company’s issuing employee stock options has declined from the levels that existed in the 1990’s, to the extent that a divorcing party has stock options, these are certainly assets subject to equitable distribution. Basically, a “stock option” is “the right to purchase a specified number of shares of stock for a specified price at specified times, usually granted to management and key employees.” The price at which the option is awarded is called the “grant” price; this is usually the market price at the time the options are granted. Black’s Law Dictionary (5th Ed. 1979). See also Treas. Reg. § 1.421-7 (a)(1) (1978); I.R.C. § 1234 (a) (1998). Generally, stock options are incentives to stimulate the efforts of key employees as well as attempts to retain such employees. Generally, there are two basic categories of stock options: (1) incentive stock options (commonly referred to as “ISO’s”) which are qualified or statutory options and (2) non-qualified stock options (which are commonly referred to as “NQSO’s”). Simply put, the difference between the two types of options results from tax compliance requirements at the time of the grant. Stock Options can be valued using various methodologies, some of which are very complex and go far beyond the space requirements of this short article. One valuation approach is the intrinsic method (i.e., current trading price less strike price). Another valuation method is the Black-Scholes formula (a complex formula taking future risk and volatility into account). Suffice to say that options, like any other asset, can be valued with one party retaining the options and buying out the other divorcing party’s share. Another option is to divide them in kind by way of a Callahan Trust. This refers to the case of Callahan v. Callahan 142 N.J. Super 325 (Ch. Div. 1976). New Jersey courts, when addressing stock options incident to divorce, emphasize the necessity to balance the “need for definitiveness embodied in the date of complaint rule with the need for flexibility inherent in equitable distribution.” This quote came from the Supreme Court case of Pascale v. Pascale 140 N.J. 583, 612 (1995), which is the seminal case in New Jersey concerning the distribution of stock options. There is unquestionably a growing trend among the courts of this nation to subject unvested or non-exercisable stock options granted during the marriage to distribution. Further, options may be viewed as income under certain circumstances for purposes of fixing support obligations. As the trend continues, it is critical that litigants be aware of the ever changing case law and that matrimonial attorneys become familiar with these unique types of assets and tailor their discovery demands, negotiation and trial preparation accordingly.
My ex-spouse exercises visitation with my kids, but I want to move with them to another state. Can I go? Answer: It depends. The Supreme Court of our State has established that a custodial parent who seeks removal of a child outside of the state of New Jersey over the objection of the other parent must first demonstrate a prima facie case for removal before the court may further consider the removal application. Baures v. Lewis, 167 N.J. at 91, 118 (2001). The moving party has the burden "to produce evidence to establish prima facie that (1) there is a good faith reason for the move and (2) that the move will not be inimical to the child's interests." Id. at 118. The Supreme Court explained: [the initial burden] will be met for example, by a custodial parent who shows that he is seeking to move closer to a large extended family that can help him raise his child; that the child will have educational, health, and leisure opportunities at least equal to that which is available here, and that he has thought out a visitation schedule that will allow the child to maintain his or her relationship with the noncustodial parent. If, for some reason, the custodial parent fails to produce evidence on the issues to which we have referred, the noncustodial parent will have no duty to go forward and a judgment denying removal should be entered. Baures, 167 N.J. at 118. In determining a party’s removal application pursuant to the Bauers standard, the court must examine the merits of that party’s request in the context of twelve factors. Specifically, the Bauers court set forth the factors as follows: (1) the reasons given for the move; (2) the reasons given for the opposition; (3) the past history of dealings between the parties; (4) whether the child will receive educational, health and leisure opportunities at least equal to what is available here; (5) any special needs or talents of the child that require accommodation and whether such accommodation or its equivalent is available in the new location; (6) whether a visitation and communication schedule can be developed that will allow the noncustodial parent to maintain a full and continuous relationship with the child; (7) the likelihood that the custodial parent will continue to foster the child’s relationship with the noncustodial parent if the move is allowed; (8) the effect of the move on extended family relationships here and in the new location; (9) if the child is of age, his or her preference; (10) whether the child is entering his or her senior year in high school at which point he or she should generally not be moved until graduation without his or her consent; (11) whether the noncustodial parent has the ability to relocate; (12) any other factor bearing on the child’s interest. Id. at 116-17. (emphasis added); see also O'Conner v. O’Connor, 349 N.J.Super. 381, 397 (App. Div. 2002). It should be remembered that notwithstanding any statutory or case law, the prevailing guiding principal of any court addressing issues concerning children is their best interests. All questions concerning children must be answered in the context of what is best for them, not necessarily the parents.
How can I reduce the amount of harm my divorce will cause my children? Answer: There are a multitude of things that divorcing parties can do to reduce the negative impact of divorce upon their children. Of course, every family is different and has particular issues that may call for additions or deletions to the following list. However, the following represents a general guide to reducing the negative impact of divorce on children: 1. Keep your emotions in check. Out of control emotions or irrational thoughts lead to imprudent decisions. 2. Litigants should not use their children as bargaining chips or pawns in the divorce litigation. 3. Litigants should not argue or discuss the litigation in the presence of their children. 4. Litigants should attempt to work cooperatively with regard to custody and time-sharing issues, even if it means that their individual goals or desires are not met. 5. Once the parties have decided to divorce, it is essential that they attempt to speak to their children together and show them a united front so that they can see that, although their parents cannot live together any longer, they still have a mother and a father who love and care for them and can work together to preserve their best interests. 6. Litigants should not view their children as spoils of their divorce litigation. 7. Litigants should not enlist their children as couriers or messengers. 8. Litigants should not bad mouth, alienate or undermine the other spouse to or in the presence of the children and should be charged with encouraging the relationship between the children and the other spouse. 9. Litigants should not discuss spousal disputes with or in the presence of the children.
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