In September 2010, the ex-Husband filed a motion to suspend his alimony obligation until he obtained full time employment. He also requested that the accrual of arrears be stayed (or stopped) during that time. His only source of income was unemployment compensation of $390 a week. He asserted that he applied for 181 different jobs and established a professional profile on a networking site. 
 

The Trial Court denied the ex-Husband’s motion, and he appealed. The Appellate Division affirmed the Trial Court’s decision denying the ex-Husband relief. Both courts stated that the person seeking modification has the burden of showing changed circumstances that would warrant relief. In this case, there was a substantial decrease in the ex-Husband’s salary; however, the Court stated that a decrease, standing alone, will not constitute the requisite showing of changed circumstances. 
 

The Court noted the following:

1. the ex-Husband did not seek training or employment in related fields
2. he failed to establish that he had exhausted all of his assets, including his retirement fund
3. he failed to adequately explain and provide proofs of his severance pay
4. he failed to adequately account for monies and assets that he received upon the divorce, including the recent sale of his home

Maria Imbalzano is the Co-Chair of Stark & Stark’s Divorce Group in the Lawrenceville, New Jersey office. For questions, please contact Ms. Imbalzano: mimbalzano@stark-stark.com.

In a recent case (Dudas v. Dudas, decided on April 11, 2011), the Defendant/Husband earned between $40,000 and $59,000, towards the end of the marriage. A Complaint for Divorce was filed in 2008, and the case was tried in 2011. Over those years, the Husband’s income increased wherein he earned $64,000 in 2009, $76,000 in 2010 and $68,000 in 2011.

The Defendant argued that his post-Complaint income should not be considered in any alimony calculus and that only the income he earned up to the date of the Complaint should be considered, since the parties’ standard of living was based on his pre-Complaint income.

While the standard of living established during the marriage is a predominant consideration, this factor does not stand alone. The Court held that the actual need and ability of a party to pay directs an analysis of the parties’ present needs and ability to pay, not the past. One of the other factors is the earning capacities of the parties which is also a current consideration.
 

The Dudas Court also considered two additional factors under the catch-all factor of “any other factors which a court may deem relevant.”  They are:

1. the marginal cost estimation; and
2. momentum of the marriage

The marginal cost estimation has to do with the fact that a couple living together is less expensive than a couple living separately in two households. Further, once each party establishes their separate residence, each party’s new budget is not 50% of the marital budget, it is generally more, and may not be substantially less than the two person household budget. In many divorce cases, when the parties separate, there is insufficient money available for either party to maintain the standard of living enjoyed during the marriage.
 

In the Dudas case, the Court felt it was fair to bring both parties reasonably closer to the marital standard of living, which could only happen by looking to the husband’s increased available funds after the Complaint date.
 

Momentum of the marriage recognizes the fact that one’s occupational efforts may take years to pay off. A person’s earning level may start out slow, but through experience, education and perseverance, it may increase dramatically the longer a person works in that particular field.
 

Therefore if a party focuses on his career throughout the course of a marriage, while the other party, as in the Dudas case, maintained the home, cared for the children and provided support and encouragement for the husband in his professional endeavors, then a post-Complaint rise in income will be considered in determining alimony.

Maria Imbalzano is the Co-Chair of Stark & Stark’s Divorce Group in the Lawrenceville, New Jersey office. For questions, please contact Ms. Imbalzano: mimbalzano@stark-stark.com.

In many cases, parties who are divorcing reach an agreement as to who may take the dependency exemption for their children in any given year. Sometimes they split the dependency exemptions between them if there are two or more children. For any divorce or agreement entered into from 2009 onward, if the custodial parent (parent having the children for the greater portion of taxable year) agrees to give the other parent an exemption in any given year, the custodial parent must sign a written declaration that the custodial parent will not claim such child as a dependent for said taxable year and the non-custodial parent must attach that declaration to his/her tax return.  Prior to December 31, 2008, the non-custodial parent only had to attach the pages from his/her divorce decree or Separation Agreement to his/her tax return.

The form required now is IRS Form 8332 entitled “Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent.”  Said form may cover the exemption for more than one year.

Maria Imbalzano is the Co-Chair of Stark & Stark’s Divorce Group in the Lawrenceville, New Jersey office. For questions, please contact Ms. Imbalzano: mimbalzano@stark-stark.com.

It is important to note the differences between these two types of accounts since it may affect the vehicle you chose if you are getting divorced.
 

Custodial accounts are accounts established at a financial institution for the benefit of a minor child. Generally, one of the parents is named as the custodian for the benefit of the child under the Uniform Transfer to Minors Act (previously the Uniform Gifts to Minors Act). These accounts belong to the child, not the parent. By establishing this type of account, the parent(s) made an irrevocable gift to the child. While the parent, as custodian, may make the decision as to how the money will be invested and spent (until the child is 21), the money must nevertheless be spent for the child or turned over to the child at age 21.
 

It must also be noted that when using funds in a custodial account, that payment is in addition to, not in substitution for, any obligation of a person to support that minor. It is well settled law in New Jersey that a child’s assets may not be used to fulfill a parent’s support obligation.
 

A 529 Account is a college savings plan which has tax advantages authorized under IRC 
Section 529.  These plans allow an investor to save money in an account in which the earnings (i.e., interest, dividends) will grow tax free and, when used for qualified higher education expenses, may be withdrawn tax free.
 

Anyone can be named as a beneficiary regardless of their relationship to the owner, and anyone can contribute to the account.  Only one account owner can be named on the account. 
 

Since this type of account is owned generally by a parent (and not the child), this asset must be dealt with in any Property Settlement Agreement during a divorce. Since the account is only in one party’s name, the best way to deal with it is to split it equally between the parents to assure that each party has control or ownership of an equal amount.  Since divorce agreements many times include provisions for the allocation of college education expenses when they arise, each party can then plan for their own contribution in the future by continuing to invest in their own 529 plan or at least continuing to hold the asset.
 

It should be noted that an owner of a 529 account can make unqualified withdrawals (withdrawals for any reason) as long as they pay the tax and penalties associated with the withdrawal. Therefore, it is not preferable to keep the account in one party’s name after divorce with just a promise that he/she will use the account for your child’s college education expenses. 
 

Further, if only one party holds the asset and there were no specific terms in the Agreement relating to this account, the owner/parent may argue that these funds will go only toward his/her share of the obligation for college education, and the other parent will receive no credit.
 

It is best to be very explicit in your Property Settlement Agreement with regard to funds saved and intended for college.

In 2004, the house was appraised at $7,250,000. During 2005, the real estate value dropped and the listing price of the house was periodically reduced (from a high of $8 million to $6.5 million). The Wife agreed to modify the parties’ Property Settlement Agreement stating she would receive $6.5 million (less certain agreed upon deductions) instead of $7 million.  

The real estate value continued to plummet, and, in October 2009, the Husband filed a Motion with the Court to be released from his obligation to guarantee the Wife $6.5 million (less deductions). He had also requested relief from other agreed upon obligations.  

In his Certification to the Court, the Husband stated that no one could have predicted the national economic crisis that occurred beginning in 2008. He also stated that the consequences to him were drastically different than what the parties intended when they reached their Agreement in 2005. The Wife filed a Cross-Motion to enforce the parties’ Agreement. 

The Trial Court as well as the Appellate Division noted that it is well-settled law that “property division or equitable distribution provisions may not be adjusted after divorce to reflect unanticipated changes in the parties’ circumstances.” Therefore, even if subsequent events could not have been contemplated when the parties entered the Agreement, modification will not be granted. 

In this case, the Appellate Court noted that the Husband claimed the recession and decline of the housing market was an exceptional unanticipated circumstance sufficient to warrant modification. The Court disagreed, stating that both parties were aware that the value of the real estate could have gone up or down since they agreed to a sum certain irrespective of the actual sales price.  

If you would like to discuss this matter in more detail, please feel free to contact me here in my firm's Lawrenceville, New Jersey office. 

When parties are divorcing, one of the spouses may raise an issue with regard to the truthfulness of previous tax returns filed. For example, the wife may say that her husband owns a business, was in charge of all the finances, and she does not know whether he had reported the correct income on previous tax returns. If the IRS audits a return that was filed jointly and finds that there was an underreporting or an incorrect deduction taken of income, thereby causing an assessment of taxes, interest and penalties, the wife may be eligible for Innocent Spouse Relief. 

In order to obtain Innocent Spouse Relief, the wife (or husband as the case may be) must file IRS Form 8857 to request the relief, which could be requested for more than one tax year. 

The Innocent Spouse can be relieved from the responsibility of said obligations if:

1. She filed a joint return which has an understatement of tax,
2. The understatement of tax is due to erroneous items on the return reported by her spouse (or ex-spouse),
3. At the time the Wife signed the return, she did not know there was an understatement of tax, and
4. It would be unfair to hold the Wife liable for the understatement of tax.

As you might imagine, the IRS does not grant these requests easily. They reject approximately 40% of the applications made because it is determined by the IRS that the party requesting relief is ineligible. 

If you believe you are entitled to Innocent Spouse Relief, you may wish to review IRS Publication 971, or feel free to contact me with any questions you may have. I’d be happy to meet with you here in my firm’s Lawrenceville, New Jersey office to discuss this matter in more detail.  

New Jersey case law recognized a claim for support between unmarried persons if those persons had formed a marital-type relationship, and one person promised to support the other person, whether express or implied. In the recent case of Botis v. Estate of Kudrick v. Wells Fargo, an issue arose as to whether the legislation regarding palimony, effective January 18, 2010, was retroactive and therefore governed this case which had been filed prior to the effective date of the statute.
 

The facts are as follows:  The Plaintiff began living with the decedent in 1976. She asserted that in 1984 she invested $17,000 from the proceeds of the sale of her house into furnishing the decedent’s home, where she lived. In 1995, they jointly purchased a residence, although her name was removed from the Deed at a later date, presumably for tax purposes.
 

The Plaintiff claimed that they lived in a marriage-like relationship, that she became dependent upon the decedent for support and that he promised he would always take care of her. In the event of his death, she would be cared for as she was during his life. When he became stricken  with cancer, the Plaintiff cared for him. Shortly before his death, she learned that his Will left his entire estate to his daughter and grandchildren. As a result, in or about November 2008, the Plaintiff filed a Complaint for palimony and for the transfer of title to two residences. The decedent’s estate claimed that the Plaintiff was not in a marital type relationship with the decedent, and, therefore, she was not entitled to relief.
 

In March, 2010, after the law was enacted regarding palimony, the estate of the decedent moved to dismiss Plaintiff’s Complaint based on that law since no promise of support was made in writing.
 

The Appellate Court looked to the plain language of the statute which says that it shall take effect immediately. There was no indication that the legislation favored retroactive application. Further, there was no indication as to whether the law applied to claims that were pending on the date of its enactment. As a result, the Appellate Court reiterated the general rule that statutory construction favors prospective application of statutes.
 

In a case such as this, the parties could not have known or anticipated the pre-requisites to enforcement of a palimony promise when the decedent died almost 1-½ years prior to the effective date of the statute. While the decedent was alive, case law supported the expectation that a palimony agreement could be enforceable without being executing in writing.
 
 

This case seems to indicate that a writing is not necessary for any palimony claim filed before January 2010. However, another question presents itself from these facts. Does the new law apply if the parties’ relationship is irretrievably broken before January 2010 but the claim for palimony is filed after January 2010?
 

As in any case, the facts must be ascertained and analyzed before determining whether a party has a claim for palimony.

In most Marital Settlement Agreements, it is specifically acknowledged that a child attending college on a full time basis is not emancipated. As a result, child support continues, at a modified amount, and college education expenses are apportioned between the parents in accordance with their income and assets until the child graduates.

What if a child takes seven years to obtain a bachelor’s degree? What if a child has a full time job while attending college? What if a child has assets that could be used to help pay for college education? These questions have been answered in recent cases decided in New Jersey; however, keep in mind that all cases are fact sensitive and a different result may occur with a twist of just one fact.

In a  recent case,  the parties’ son was almost 24 years old, attended DeVry University (after a series of other colleges), had a job earning $22,600, lived in an apartment costing $1,260 a month and had taken out student loans to help pay for his college education costs, as well as his living expenses.

Upon his mother’s application to the Court to compel the father to continue paying child support as well as to contribute to the college education costs, the Trial Court determined that the son was emancipated and required the son to pay for his college tuition with loans. The Court also stated that if the son finished DeVry University in three years, the son could request that his father reimburse him for the father’s proportionate share of his college loans. The Court’s reasoning in emancipating the son and compelling him to take out loans for his education was to motivate him to finish college.

It is important to note here, that the parties’ Marital Settlement Agreement (MSA) stated that child support would continue until emancipation. Therefore, child support was terminated when the Court determined the son was emancipated. There was a separate provision in the MSA which governed the parties’ obligation to pay toward their child’s college education. On appeal, the Appellate Division agreed that the son was emancipated because he earned enough to support himself and moved beyond the sphere of influence. Therefore, child support was not required by either parent. However, the son’s emancipation did not eliminate the parents’ obligation to pay for his college education expenses pursuant to their Agreement.

In another recent case, the Court dealt with whether a child’s inheritance could be considered when fixing a parent’s support obligations which include college education. It was determined that a child’s assets may not be used to fulfill a support obligation of the parent. Therefore, in calculating child support, accounts in the child’s name, whether in trust or in custodianship, shall not be considered in setting a parent’s child support obligation. New Jersey Courts have included college education expenses as part of a child’s necessary support; therefore, it follows that a child’s assets should not be considered in apportioning college education expenses between the parents.

This is in direct contravention to the seminal case of Newburgh v. Arrigo in which the Supreme Court of New Jersey held that a court can consider a child’s assets (among many other considerations) when determining the parents’ proportionate share of college education expenses.

Many of these issues can be dealt with ahead of time through a carefully drafted Marital Settlement Agreement specifically dealing with emancipation and how it relates to college education expenses, as well as the effect a child’s income and assets has on the parents’ ultimate contribution to college.

• his law firm was dissolving;
• the firm had been operating at a loss requiring he and his partners to borrow money from the firm’s line of credit;
• his income was reduced;
• he was paying a high interest rate on a loan; and
• he had recently opened his own firm

The Court found that these reasons were insufficient to meet the Husband’s burden of proving changed circumstances. The Husband offered no information to the Court regarding his personal income drawn from the firm’s credit line, and he did not present any facts showing a change in his standard of living other than downgrading from a Porsche to a BMW. The Court stated that since the Husband opened his own law firm and brought many of his clients with him, he was employed and had the potential of earning a similar salary as he had in the past. Therefore, the Husband’s request to reduce alimony was denied. 

It is important to note that when a self-employed party files for a reduction in alimony, the Courts are wary that such individuals are in a better position to present an unrealistic picture of their actual income to the Court than a W-2 wage earner. In any event, if the Husband in the above case had presented more financial information to support his position, the outcome may have been different.

More often than not, divorcing parties provide for the probability that their children will incur college education expenses in the future, in their Marital Settlement Agreement. However, because that eventuality has not yet occurred, the language in the agreement is usually in general terms, such that the parties’ desire for their children to attend college, and when the time comes, they will agree to participate in the payment of said costs dependent upon their income and assets at the time. Usually, there is also language that the parties will cooperate in having their child apply for scholarships, grants and loans to help defray the costs of said education. 

In the best of all possible worlds, during their child’s senior year in high school, the parents and child will collaborate and reach an agreement as to which institution the child will attend and what percentage of the costs each parent will pay. Yet, that does not always happen between divorced parties, who many times refuse to discuss anything civilly after a divorce has occurred. 

As a result of the lack of communication, all or some of the following problems arise:

• One parent and the child choose a school without consulting the other parent;
• The other parent refuses to respond to communications from the parent and/or child requesting input;
• The child chooses a school, a contract is signed, and one of the parents has not agreed to that school;
• The child attends a college for one or more years before the paying parent requests payment from the non-paying parent.   

If a paying parent does not communicate with the other parent, or does not bring the matter to the court in a timely manner, he/she may not be able to receive the contribution contemplated. In a recent New Jersey case, a mother accepted negligible contributions from the father for the first two and a half years of their daughter’s college education (less than 7% of the total cost).  During the child’s junior year, the mother requested a greater contribution, commensurate with the father’s income – which would have been 68% of the total cost. When he did not agree, she filed a motion with the court. While the trial court ordered the father to pay for 68% of the daughter’s college education costs for all four years (less what he had already paid), the Appellate Division disagreed. That court held that the father did not have to make additional contributions toward the first two and a half years of his daughter’s education, but must pay his 68% proportionate share for the last year and a half. 
   

The Appellate Court felt that the delay in seeking contribution by the paying parent resulted in a huge accumulation of college expenses which was not anticipated by the other parent, and he did not have the funds to pay it out of his current income or assets. Once the request had been made during the daughter’s junior year to pay his proportional share, he could have then planned for those payments. 
   

The lessons to take from this case are clear: as soon as practical, the parents should communicate concerning the many issues inherent in selecting a college; a parent or child seeking contribution toward those expenses must request it before the expenses are incurred; and, if the requested parent refuses to pay his/her proportionate share, the parent seeking contribution should initiate the application to the court before the expenses are incurred.

In a recent unpublished Decision, the Appellate Division reversed a Trial Court Decision wherein the Trial Judge ordered that future retirement of the obligor would automatically terminate his alimony obligation.
 

In that case, the obligor was 46 years old at the time of Trial.  After an eight day trial, the Judge awarded permanent alimony to the Wife.  However, the Judge included a provision in the Decision that the obligor’s retirement shall be a change of circumstances in regard to permanent alimony, and alimony would automatically cease at that time.
 

The Wife appealed.  On Appeal, the Appellate Division held that prospective termination provisions are inappropriate, and this determination should be made at the time of the retirement.
 

It is worthwhile to note that this case is unpublished (i.e., non-precedential).  It is also notable that the Court did not address the issue of termination provisions that appear in Property Settlement Agreements that have been agreed upon by the parties.  The courts have typically upheld the parties’ freedom to contract between themselves.
 

If you have an alimony obligation and are contemplating alimony, you should consult with a divorce attorney as soon as possible to determine how best to proceed.
 

For a more in-depth look at alimony and retirement, please see my article entitled Does an Alimony Obligation Terminate Upon Retirement.

Currently, our family court system is over-burdened.  There are not enough judges to hear the thousands of new cases that are filed in our State every year.  Therefore, in order to move your case along, you may wish to consider alternatives to the litigation process, or avenues you can access to supplement the process, thereby making the system work better for you.
   

Mediation.  Mediation is a process in which two parties (with or without lawyers) meet with a third party, the facilitator or mediator, to help resolve disputes.  This meeting takes place in an informal setting, where those involved frame the issues and discuss alternatives for settlement, all with the help of the mediator.  The issues are discussed, one by one, until an agreement is reached.  The mediator does not determine the outcome; the parties do.  When all issues are resolved, the mediator drafts a Memorandum of Understanding which the parties take to their attorneys for review.  The intent of the process is to reach agreements that will be placed into a formal Interspousal Agreement signed by both parties.   
   

Arbitration.   Different from mediation, arbitration is similar to a trial; however, it is a less formal process that takes place before an arbitrator, not a judge, in a conference room as opposed to a courtroom.  Many times the arbitrator chosen by the parties is a retired judge or attorney who has expertise in the area of family law.  The arbitrator listens to the testimony of each party and their witnesses through the questioning of the attorneys.  Documentation is also presented  to bolster each party’s position.  Once each side has presented their case, the arbitrator makes a decision.  While similar to a trial, the key differences are: (1) the process is less formal and more flexible; (2) the parties choose the arbitrator, whereas you cannot choose your judge; (3) the parties, along with the arbitrator and attorneys set the schedule, so that you’re not beholden to the limited time schedule of the court; and (4) a decision will be made promptly.   
   

Collaborative Divorce.   This is a fairly new approach to divorce, wherein, the parties and their attorneys sign a Participation Agreement committing to resolve all divorce issues through negotiation and not litigation.  The attorneys assist their clients in resolving conflicts through cooperative techniques rather than adversarial strategies.  This is accomplished through a series of conferences in which the parties work together toward a negotiated settlement.  In the event the process is not successful, the attorneys must withdraw from the representation of their respective clients, and the parties must hire new counsel before proceeding with litigation.

Four-Way Conferences.  While the above methods are less formal than trial, an even more informal method for resolving differences is the four way conference.  This generally takes place during the litigation process, but before you are too deeply into case.  The parties and their
attorneys meet to discuss the outstanding issues in the case with a view towards solving, or at least narrowing, the issues before going to court.   

All issues in a divorce case can be resolved by using any of the above methods; however, both parties must agree to engage in any one of these forms of alternate dispute resolution before proceeding in this manner.

At the time of a divorce, alimony and child support are based on the parties' incomes.  If there is a substantial change in circumstance after the initial support is set, such as the loss of employment due to no fault of your own (i.e., layoffs, plant and store closings, corporate bankruptcies), you may wish to file an application with the court, called a motion, to decrease your support obligations.
 

In any modification case, the burden of proof to establish a substantial change in circumstance is on the party seeking change.  It is not prudent to run into court on the heels of losing your job without having taken the steps necessary to prove your case.  A court must not only weigh the payor spouse's circumstances in deciding when, if, how much and for how long support obligations should be modified, it must also take into consideration the effect any modification will have on the payee spouse, including the children.
 

In seeking modification, the payor spouse must file a certification with the court setting forth the facts which would convince a court to modify support.  You must attach  proof to that certification which captures the time and effort you put into finding another job.  Copies of letters and resumes sent by email or snail mail to companies looking for employees is a start.  Most job seekers these days will post their resume on employment websites such as monster.com or careerbuilder.com, but this does not quantify the effort made.  Keeping a log of prospective employers who contact you with the date and synopsis of the conversation or copy of email responses is better proof.  Copies of rejection letters, if an employer bothers to send one, are also helpful.  The log should include dates and outcomes of interviews, any employment offers made, and reasons why an offer was not accepted.  Any hard evidence that would support the log is a must.
 

In addition, the supporting spouse should certify as to efforts made in reviewing local newspapers and trade or industry journals for employment opportunities.  Obtaining a headhunter and documenting all job leads, interviews and rejections is also suggested.  Many times the prior employer will offer laid off employees time with a counseling or other firm as part of their severance package.  All of this information must be pooled together, with supporting proof and made part of any certification accompanying a motion for modification.
 

In searching for employment, it may no longer be acceptable to apply for jobs only in your residential area, or only in your specific field.  If expanding your job search in these ways bears no fruit, then accepting a decrease in pay may be the only option available if you have been in the market for a period of time with no results.
 

If a party does accept a job with lesser pay after a diligent search, it will be much easier to deal with a motion for modification of support.  If the proofs are there as to the efforts made for a comparable job to your prior employment, and you have not been able to obtain comparable employment given the state of that industry, then the court will rely on the lesser income in modifying support, absent evidence undermining the payor spouse's proofs.
 

If, on the other hand, you have not made a zealous effort and have just accepted a job making lesser pay without proving your effort, then a court may not modify your support payments.
 

The New Jersey Appellate Division set forth factors which the trial court should  consider in a case dealing with a career change and lesser income.  These factors include: the reasons for the career change (both the reasons for leaving the prior job and the reasons for choosing the new job); disparity between prior and present earnings; efforts to find work at comparable pay; the extent to which the new career draws or builds upon education, skills and experience; the availability of work; the extent to which the new career offers opportunities for enhanced earnings in the future; age and health; and the former spouse's need for support.
 

As one can glean from the above suggestions, a motion to modify support based on job loss should not be filed quickly, even though you may want and need fast relief.  While courts are now considering motions to modify support based on job loss much more quickly than they have in the past, you must still present a compelling case.

But what happens if an asset is no longer in existence or spent down by the time a Divorce Complaint is filed as a result of one spouse’s spending?
 

A Court can determine whether a spouse has dissipated marital assets and therefore should have the obligation to pay that money back.  However, a careful analysis must be conducted.
 If the spending has been used to pay marital debt or to fund vacations or for some other marital purpose, the Court will not find that dissipation has occurred.  On the other hand, if a spouse sends money to his or her family over the objection of the other spouse, or if a spouse spends money frivolously for his or her own purposes while contemplating a divorce, a court may find that dissipation has occurred.
 

The following factors should be considered when deciding the issue of dissipation:
(1) the proximity of the expenditure to the parties’ separation, (2) whether the expenditure was typical of expenditures made by the parties prior to the breakdown of the marriage, (3) whether the expenditure benefitted the "joint" marital enterprise or was for the benefit of one spouse to the exclusion of the other, and (4) the need for, and amount of, the expenditure.
 

While not an easy thing to prove, dissipation of marital assets is an issue to be raised in some divorce cases.

Pursuant to Rule 5:5-2 of the New Jersey Court Rules, a Case Information Statement must be filed by each party within twenty days after the filing of an Answer or an Appearance.  In addition, a CIS must be filed in all family actions which in there is an issue as to custody, support, alimony, or equitable distribution.  This includes pendente lite and post-judgment motions.
 

All too often, attorneys and litigants do not spend the time and effort necessary to prepare an accurate CIS.  Some do not take the time to fill out the marital budget, which is a necessary to determine the marital lifestyle in alimony cases.  In such a case, the Court may draw inaccurate conclusions and thereby make an unfavorable award.  When it comes to Case Information Statements, it is prudent to include as much information as possible for the Court to utilize in making a determination.
         

Another common mistake with Case Information Statements occurs when the monthly budgets are grossly inflated.  Especially in cases where alimony is an issue, because alimony is based on the parties’ incomes and their expenses.  Thus, the party seeking alimony may be tempted to inflate their monthly budget with the expectation of receiving an increased alimony award.  However, an unrealistic monthly budget will damage the party’s credibility with the Court, which may also lead to an unfavorable result.
 

In a recent Appellate Division Case, the Court emphasized just how important it is for the Court to have a clear picture of the parties’ financial circumstances.  In Lombardo v. Lombardo, the Husband filed a post-judgment motion to reduce and/or eliminate his alimony and child support obligations, and the Trial Court held a plenary hearing to determine whether a substantial change in circumstances had occurred since the parties’ divorce.  The Husband demonstrated that he was diagnosed with muscular dystrophy following the divorce, and as a result if his disability, his income substantially declined from the income he was earning at the time of the divorce.  However, during the plenary hearing, the Husband failed to testify regarding his expenses and assets, and did not enter his Case Information Statement into evidence.  The Court did not have information regarding his expenses, debts, and assets. 
   

Following the plenary hearing, the Trial Court denied the Husband’s application for a reduction in alimony, and the Appellate Division affirmed.  Although the Husband successfully demonstrated a reduction in his own income, he failed to demonstrate a reduction in his ability to pay because of the missing financial information, which was contained in his Case Information Statement.  Had the Husband presented testimony about his financial situation, or simply entered his completed CIS into evidence, the result of the plenary hearing may have been much different.

The Appellate Court went into much more detail in reviewing this issue.  It cited to previous case law which defines cohabitation as:

“more than merely a common residence or a sexual relationship.  We believe the ordinary definition of ‘cohabitation,’ describing a relationship of living together ‘as man and wife,’ connotes mutual assumption of the duties and obligations associated with marriage.  To guide trial courts in applying this definition, we have formulated a list of factors to consider in determining whether a relationship constitutes cohabitation.  We emphasize however that the list is non-exhaustive, and that no one factor serves as an absolute prerequisite for cohabitation.”
 

The factors that a Court should consider are:

1.     Establishment of a common residence;
2.     Long term intimate or romantic involvement;
3.     Shared assets or common bank accounts;
4.     Joint contribution to household expenses; and
5.     Recognition of the relationship by the community.

In reviewing the above factors, it is clear that our courts view cohabitation as “tantamount to a marriage.” 
   

Further, in looking at whether there are changed circumstances which warrant modification of alimony in the case of cohabitation, modification would be warranted when either the cohabitant contributes to the dependent spouse’s support or lives with the dependent spouse without contributing.  In the Olito case, the Appellate Division agreed with the trial court in that the Defendant, ex-Husband, offered no evidence of either an intimate relationship or economic interdependence.  In the absence of such evidence, the ex-Husband failed to meet his burden of proof, and, therefore, the Court was right to reject the claim of cohabitation and thereby modify his alimony obligation.   

By statutorily allowing limited duration alimony (LDA), or alimony for a term of years, the legislature gave to the courts the authority to do what attorneys had been doing for their clients all along through negotiated agreements. This flexibility has been helpful to divorce litigants, since not all cases warrant permanent or rehabilitative alimony.   

However, what is the line of demarcation between an award of limited duration alimony and permanent alimony?  Unfortunately, there is no bright line, and the ultimate resolution will depend on the facts of each case, as well as the Judge's perspective. 

In attempting to resolve this issue, case law is instructive.  Several reported decisions by the New Jersey Appellate Division have provided some guidance in distinguishing between the two types of alimony. 

Limited duration alimony is available to a dependent spouse who made contributions to the marriage, if the marriage is of short duration.  Permanent alimony is awarded after a lengthy marriage, in recognition of prolonged economic dependence and sustained contribution to a marital enterprise.

While all the statutory factors in determining alimony must be considered (such as need of the party, ability to pay, health of the parties, standard of living during the marriage, etc.), the duration of the marriage is the defining distinction between whether permanent or limited duration alimony is awarded.  Yet, the question remains, what is considered a short term marriage, and what is a long term marriage?   And, what do we do about intermediate length marriages? 

While not defining what a short-term marriage is, the Appellate Division in Cox v. Cox stated that a 22 year marriage is a long term marriage, and therefore reversed the Lower Court's award of limited duration alimony. In Hughes v. Hughes, the parties were married for 10 years.  The Lower Court awarded rehabilitative alimony to the Wife (LDA was not yet statutorily authorized), placing great emphasis on the length of the marriage.  The Appellate Court disagreed that a 10 year marriage should be considered short-term stating that "By today's standards, it is not."  The Court went on to state that because the marriage was of intermediate length, the Wife should receive permanent alimony.

In a recent Appellate Court case, Valente v. Valente (decided in January, 2009), the parties were married for close to 12 years and had 3 children.  The Lower Court held that the Wife was entitled to permanent alimony.  The Appellate Division, however,  found that limited duration alimony was appropriate in this case, citing the fact that the marriage was of intermediate length.  The Wife's age (40), education (high school diploma), and the age of the children would allow her to obtain a job within a reasonable time.

The Court noted that at the end of the term, the Wife could seek permanent alimony or an extension of limited duration alimony if her earnings were insufficient to maintain her lifestyle without alimony. This holding is perplexing given that the statute on limited duration alimony specifically states that the Court may modify the amount of the LDA award, but not the length of the term,  except in unusual circumstances.  Yet, the Appellate Division seems to be saying that any circumstances which would support the fact that the Wife cannot earn an income to support her marital lifestyle would be sufficient.

In another recent case, the Appellate Court had before it the "unusual circumstances," which would give rise to an extension of LDA.  The parties were married for 7 years and had 2 children.  Both were lawyers.  The Husband had an active practice, and the Wife did not, because of her parenting obligations.  The parties had agreed to LDA for a term of 4 years.  After the divorce, one of the children was diagnosed with psychological disorders.

The Lower Court denied the Wife's motion for an extension or increase in alimony.   The Appellate Division, however, honed in on the heightened standard - unusual circumstances - for extending the term of LDA and agreed that the Wife had made a sufficient showing due to her son=s current mental health condition. 

Given the above, we can glean from case law that marriages between 10 and 12 years are of intermediate length, and marriages of over 20 years are considered long term marriages.  Although we do not know whether long-term starts at 13 years, or some other number, we do know that permanent alimony will be awarded in a long term marriage, and LDA will be awarded in short term marriages.  We can also draw from the Valente case, that LDA is appropriate for marriages of intermediate length, and in appropriate circumstances, it will be extended.