New Jersey Family Law Blog

Heading for Divorce? Take Steps to Protect Your Credit Rating

April 9, 2013 | Kearns Rotolo Law

When contemplating divorce, one of the first issues to be handled, after custody, is the distribution of marital assets. What some people fail to do adequately, however, is address the issue of joint debt that has accumulated during their years together. Failure to take care of debt and credit issues can lead to credit rating nightmares for years to come.

People may fail to realize that a divorce decree does not change the commitments made to creditors. When you incur debt of any type – mortgages, loans, credit cards – you are entering into a legal contract to repay that debt in compliance with terms of the loan.(1) There are several ways to handle marital debt and save your credit rating.

It is possible to come to an agreement as to which partner is responsible for which debt after divorce and have those terms included as part of your divorce agreement. For instance, the spouse who keeps the house may assume mortgage payments, while the spouse who takes the family car assumes the car loan. Just know, however, that if those loans remain in joint names and the responsible party fails to make the payments, that failure will appear on both parties’ credit reports. (2) Online access to your accounts can help you see potential problems before they get out of hand.

Bill Calls for End to Permanent Alimony, Other Reforms

April 3, 2013 | Kearns Rotolo Law

unhappy%20couple.jpg The State Assembly currently is considering legislation to end permanent alimony and clarify the guidelines under which other forms of alimony are awarded. (1)

In New Jersey, there are four main variations of alimony that can be awarded upon the end of a marriage or civil union: limited duration alimony, rehabilitative alimony, reimbursement alimony, and permanent alimony. (1)

Limited duration alimony is the most common. Also known as term alimony, this is payable only for a specified time and is usually intended to give the receiving spouse enough time to become financially self-sufficient. Rehabilitative alimony is also payable for a specified time, usually long enough for a dependent partner to gain the training and/or education needed to find employment. Reimbursement alimony is awarded when one partner makes financial sacrifices to enable the other partner to further his or her education in an effort to improve earnings potential. And finally, permanent alimony is usually awarded in the dissolution of long-term marriages or unions, particularly when the earnings potentials of the partners are drastically unequal due to one spouse sacrificing education and/or career goals in order to take care of the family. New Jersey also has a temporary, or “pendent lite” alimony, which is awarded to help take care of the living expenses of an unemployed or low-earning spouse during divorce proceedings. (2)

New Tax Changes Can Impact Divorce Agreements

March 21, 2013 | Kearns Rotolo Law

By now, all year-end tax records have been received and people are busy preparing tax returns for filing by April 15. Earlier this year, changes were made to the tax code which could affect many people, especially those in the process of divorce.

On January 1 the American Taxpayer Relief Act (ATRA) was passed as a remedy to the “fiscal cliff” this county was facing, replacing the alternative solution, which included tax increases for middle-class Americans and widespread spending cuts. The ATRA, however, contains some provisions that could negatively impact those in the process of divorce. Two areas of most concern, according to a recent article on Forbes.com, are income changes and distribution of assets. (1)

When negotiating alimony payments, be aware that the ATRA increased the tax rate for those in the higher income brackets to 39.6% from 35%. The threshold for that bracket is taxable income in excess of $400,000 for a single filer. Alimony is considered taxable income so it is advisable to consider how any alimony award would affect your current tax situation before reaching agreement on these payments. In some cases, a lump sum settlement, which would be non-taxable for both parties, could be preferable to scheduled alimony payments. (1)

Prenuptial Agreements Are Not Just for the Wealthy

February 26, 2013 | Kearns Rotolo Law

Valentine’s Day focuses on love, and with love in the air, many couples begin to plan their next step – marriage. Today it is not unusual for couples to consider drafting prenuptial agreements before they tie the knot.

A common myth surrounding prenuptial agreements is that only the rich benefit from them. Not true. A prenuptial agreement can help any couple, regardless of their net worth. Prenuptial agreements can be helpful if you are significantly wealthier or significantly poorer than your spouse-to-be; if your future spouse has a lot of debt; if you own a business or are part owner; and/or if you plan to give up your career to be a stay-at-home parent.

However, for many people prenuptial agreements just aren’t romantic. After all, who wants to think about divorce when just starting out in a relationship? The fact is, though, the divorce rate in the U.S. still hovers around 50%, and even though New Jersey has the lowest divorce rate in the nation (1), chances of your marriage failing is still a possibility. The State’s divorce laws may offer a little financial protection, but some people prefer to take matters into their own hands.

Early Intervention Program for Young Offenders

February 12, 2013 | Kearns Rotolo Law

If you are a parent or guardian of a teenager between the ages of 13 to 17 who has committed a minor legal infraction, help may be available thanks to the Hunterdon County early intervention program announced the 14th of January this year by the Hunterdon County Prosecutor’s Office. After successful pilot programs in a few municipalities throughout Hunterdon County last year, the County adopted the program joining Morris County, who has had a comparable program for years. Hunterdon County’s program is the Law Enforcement Adolescent Program, also known as L.E.A.P. By successfully completing L.E.A.P, a teenager’s minor infractions will not be recorded as a criminal charge in the system.

Although intended for offenders who commit first-time infractions associated with substance abuse, anger management, issues related to school or family matters, L.E.A.P may also offer repeat offenders enrollment at the discretion of the Hunterdon County L.E.A.P Officer. Additionally, the court may mandate enrollment.

The objective of L.E.A.P is to help teens make better life choices by providing therapeutic support and counseling as opposed to being charged with a crime. L.E.A.P participants receive objective guidance in the hope of causing participants to reflect on choices they made in the past, allowing them to gain further understanding and awareness about how to go about changing their behaviors in the future. Additionally, the program will be a source of encouragement, offering tools to avoid further criminal justice system involvement. Also, it is important to note that there is little to no cost to the teenager’s family.

Court: Right to Counsel Does Not Apply to Restraining Order Hearings

February 1, 2013 | Kearns Rotolo Law

A New Jersey appeals court recently ruled that the State was not obligated to provide counsel to either plaintiffs or defendants for hearings on restraining orders resulting from acts of domestic violence. (1)

The U.S. Constitution provides all citizens with the right to counsel, whether or not they can afford to hire a lawyer. That right, however, only applies to situations that could result in a prison sentence. New Jersey takes it a step further providing defendants, who cannot afford a lawyer, court-appointed counsel if the defendant faces jail time or “other serious consequences,” including the loss of a driver’s license or fines in excess of $1,800. (2)

While the above-mentioned ruling may seem to contradict State law, there is a difference. The court explained that the purpose of a restraining order is not to punish anyone, although it does require proof that a crime (assault, stalking, harassment, kidnapping, etc.) had been committed previously. Instead, the purpose of a restraining order is to protect someone from future harm. To do this, restraining orders give courts the right to impose certain restrictions and even fines of up to $500. These consequences, however, are not significant enough to warrant appointing counsel at the taxpayers’ expense, according to the court ruling. (1)

Why It Is Important to Establish Paternity

January 22, 2013 | Kearns Rotolo Law

keith’s child support (Photo credit: Sean Durham)

A recent story on msn.com suggested that Chris Humphries, estranged husband of Kim Kardashian, is the legal father of the baby she is currently carrying. Yet, anyone who follows celebrity news knows that Kanye West is that baby’s daddy. Which is it?

What the MSN article was referring to is the legal definition of “father.” Under California law, Mr. Humphries could be considered the legal father of Ms. Kardashian’s unborn child because the couple’s divorce is not yet finalized. New Jersey has similar legal definitions of “father.” Under New Jersey law, a man is presumed to be the father of a child if the child’s birth occurs during the marriage of that man to the child’s biological mother or within 300 days of the termination of that marriage. (1)

Foreign Adoptions Carry Unique Risks

January 1, 2013 | Kearns Rotolo Law

Adoption (film) (Photo credit: Wikipedia)

About 1,500 American families, including some New Jersey residents, recently had their dreams shattered when a bill banning Russian orphan adoptions by U.S. citizens was signed by Russian President Vladimir Putin, a move that highlights one of the risks of international adoptions. (1)

Each year thousands of Americans turn to foreign countries to adopt. One reason international adoptions are so popular is that the time and expense involved in the process is often more predictable than when adopting a domestic child. A major drawback is that when and if relations between the U.S. and the foreign country fall apart, these adoptions can be stopped – even in mid-process — leading to heartache for the adoptive parents and children alike.

When Alimony Is Set Too High, Both Parties Lose

December 16, 2012 | Kearns Rotolo Law

dollars (Photo credit: Tddy)

Alimony, otherwise known as spousal support, is intended to protect the less financially stable partner once a marriage ends. However, when circumstances change, this protective order for one partner turns into a hardship for the other and both parties lose. It is the need to address these changing circumstances that have some calling for reform of the State’s alimony laws.

A recent Hunterdon County case illustrates the negative effect New Jersey’s current alimony laws can have on a family. Following his 2011 divorce, John Waldorf was ordered to pay both spousal and child support. The problem was that the spousal support payments alone exceeded his average annual take home pay. Waldorf was jailed for failure to meet his alimony obligations. As a result his ex-wife, who is disabled, received no financial support. To make matters even worse, Waldorf lost his job while in jail, further hindering his ability to meet his court-ordered obligations. (1)

Financial Hardships Do Not Excuse Child Support Obligations

November 17, 2012 | Kearns Rotolo Law

Senior leaders visit Sandy response efforts in NJ and NY (Photo credit: The National Guard)

In the aftermath of Hurricane Sandy, many lives throughout the State were put on hold. Schools were closed; work was missed; bank fees were waived; homes were destroyed; and even property tax deadlines were extended. Some obligations, however, can’t be easily put off no matter what the hardship. One of those is child support.

New Jersey law considers child support an ongoing obligation of both parents. In cases of divorce or of children born outside of marriage, the custodial parent’s share of the support is usually considered satisfied by day-to-day expenditures related to the care of the child. The non-custodial parent satisfies his or her obligations through a child support order. (1)