“All you need is a dollar and a dream”. Mega Millions. Powerball. Pick-6. State lotteries all over the Lottery-300x232country encourage people to pluck down their dollars for the dream of possibly winning a fortune and being financially set for the rest of your life.

However, for one Michigan man that “dream” may have been considered more of a nightmare when he was directed in his divorce case to turn over to his ex-wife $15 million, nearly one-half of the Mega Millions jackpot he won in 2013. That decision was recently affirmed by the Michigan Court of Appeals in Zelasko-v-Zelasko (Docket No: 342854 decided June 13, 2019). Why the husband may have considered a lottery jackpot to be a “nightmare” included the fact that the parties married in 2004, separated in 2008, filed a divorce complaint in 2011 – almost two years before the winning lottery ticket was purchased – and where the wife had been the primary breadwinner, earning roughly three times what the husband earned. Why such a result? Most critically, under Michigan law “marital property” subject to equitable distribution in a divorce includes all property acquired from the date of marriage until the date of entry of the divorce decree. Hence even property acquired after a separation or after a divorce complaint is filed is considered marital property in Michigan. Since these parties’ actual divorce did not become final until 2018, the lottery winnings of 2013 were still considered marital property.

Among the other reasons this significant award to the wife was affirmed on appeal included: (1) that the determination was made by an arbitrator during a binding arbitration process which had been agreed upon by the parties, with the ability to challenge such rulings being statutorily limited; (2) the arbitrator’s ruling that such a division was fair and equitable, opining that the winning lottery ticket was probably not the first lottery ticket the husband purchased during the marriage and that as losses throughout the marriage were incurred jointly, winnings should also be shared jointly; and (3) that the dollar spent for the ticket was arguably marital money and as such a joint investment. Beyond this, the husband had not engendered much sympathy since he allegedly failed to contribute any money for the support of the parties’ three children.

Divorce is a life-altering event. For many it is an emotionally charged situation. The person you had loved and intended to share a life with is now someone who you consider your “enemy” – 6821f1126a34f02c8e256da1560d1e52-300x200viewing them from indifference to hatred. Any sense of trust has gone out the window. For some, notwithstanding the breakdown of the marriage, they sincerely want to resolve their marital issues amicably and in a fair and reasonable manner. However, for a significant number the raw emotions at the outset of the marital breakup seem to engender a need to “screw” the other person as much as possible. Depending upon your position in the relationship, you either want to “milk” the other spouse for all you can get, or want to pay the other as little as possible. One spouse may feel the need to “protect” one’s assets or income in some fashion from the claims of the other. One spouse may suspect that the other is hiding assets or diminishing income. In many cases, these feelings are borne out of the mistrust which exists and are not occurring in reality. However, in others these feelings or suspicions have some basis in fact. Claims of concealed or diminished income aside, this blog post will focus instead on concerns over the possibility of concealed or hidden assets in divorce, and provides a brief overview of what to look for and how to address them when such issues arise.

In divorce matters, New Jersey law provides for the equitable distribution of assets and property legally or beneficially acquired during the course of the parties’ marriage. In order to do so, marital assets first need to be identified, then they need to be valued, and after which they are to be distributed “equitably”. Unless the property was acquired by gift or inheritance from a third-party, it generally does not matter how or in whose name the assets or property was acquired if it was acquired during the marriage. Hence, if a divorce client suggests that because an asset or property is in his or her name alone the other spouse has no right to it or even to know about it, that person needs to be cleansed of that view right off the bat. Furthermore, if a divorce client tells his or her attorney about “secret assets”, the attorney/client privilege may not shield them from disclosure since the attorney code of ethics prohibits an attorney from facilitating a client engaging in fraudulent conduct or offering knowingly false testimony or statements under oath.

What if a divorce client suspects that his or her spouse has been secreting or hiding assets? Besides inquiring as to the basis for these suspicions, an attorney should obtain from the client their perception of the commencement date of any serious marital difficulties or their sense of when certain suspicious financial activity began, such as changes in the manner finances were being handled, records were maintained, or information shared. In most divorce cases, you usually ask for five years worth of financial records in discovery. However, if the suspicious financial activity has been ongoing for longer than five years, one should extend the time for which discovery is sought.

While not limited to family law matters, at the conclusion of a case a client may often have an outstanding balance due for legal fees in regards to services rendered by the attorney in the a615c5170cfbe42ac3ed71065bce6f12-300x199underlying action. Most of the time payment arrangements end up getting worked out. Sometimes they are not. In those instances most attorneys are reluctant to initiate legal proceedings against their former client to collect the outstanding fees, viewing it as a matter of last resort. However, even before being able to pursue same, an attorney is obligated to advise the client of his/her opportunity to request fee arbitration, a program implemented by the New Jersey Supreme Court as a means to resolve fee disputes between an attorney and client under R.1:20A-1 et. seq. Sometimes clients choose not to proceed with fee arbitration. Other times, a fee arbitration request may be declined as being beyond the jurisdictional limits of the program. In those instances, an attorney may feel he/she is left with no alternative but to file a civil action complaint against his/her former client to collect its outstanding fee.

In certain of these instances, a former client may express dissatisfaction with the legal services rendered by the attorney on their behalf. Perhaps the client is displeased with what he/she views to be an unfavorable result, and blames the lawyer for this outcome. Perhaps the client questions the specific services rendered or fees charged. However, there may be times where the client believes that the attorney did not represent them properly or was somehow negligent, alleges that they sustained some sort of damage or loss, and which they assert gives rise to a claim for legal malpractice.

When must a claim for legal malpractice be brought? If an attorney has already filed a collection action, would this impact how and when such claims must be filed? Are there circumstances where a legal malpractice claim may be barred? In the recent case of Dimitrakopoulos v. Borrus et als 2019 N.J. LEXIS 272, 2019 WL 1065049, the New Jersey Supreme Court attempted to address and clarify these questions, specifically in the context of what is known as the Entire Controversy Doctrine.

At the end of 2017, the U.S. Congress passed the most sweeping tax changes in over 30 years, referred to as the Tax Cuts and Jobs Act of 2017 (TCJA). While there were many provisions of the file0001546166524-300x225federal tax laws which were impacted, the most publicized changes were the reductions in the income tax rates along with the reduction and/or elimination of various deductions or exemptions. Most of these changes went into effect for the 2018 tax year. However, when it came to family law matters, the biggest change brought about by this tax law was regarding the deductibility and taxability of alimony. Until this law, alimony payments were deductible by the payor and had to be included as income for the recipient, albeit subject to certain regulations and phase-out provisions. While this tax treatment was “grandfathered” for pre-existing alimony obligations, alimony obligations established after January 1, 2019 were no longer tax deductible to the payor or considered taxable income to the recipient under the TCJA. Indeed, there was a mad dash to finalize divorces prior to December 31, 2018 to take advantage of the prior tax treatment of alimony; so much so that many counties continued to make Family Court judges available during their winter recess to put through divorces.

While the tax treatment of alimony may be considered the most prevalent provision of the TCJA impacting family law, it is becoming evident that there is a more subtle, but no less important, impact which is only now coming to light. Again, one of the major changes in the tax law was the across-the-board reduction in the individual tax rates. As a result, the IRS promulgated revised withholding schedules, which adjusted [downward] the amounts being withheld from one’s paycheck for federal taxes during 2018. Since the vast majority of taxpayers are W-2 wage earners, these revised withholdings applied. What people saw was some sort of increase in their net pay each paycheck. Who wouldn’t enjoy having a little more money in your pocket?

What’s the problem? UNDER WITHHOLDING!

In the recently published opinion of the Appellate Division in Fattore v. Fattore,A-3727-16 (App. Div. 2019), the Appellate Division the husband appealed a trial court order requiring him to3e728f0b3d0e026b62a8cb4b38918e95-1-300x200 indemnify his former wife for the loss of her share of equitable distribution of his military pension, which was waived as a result of his receipt of disability benefits. The wife filed a cross appeal arguing that the trial court should have granted her request for alimony to replace the value of her lost pension benefit.

In this case, the Fattores divorced in 1997 after a thirty-five year marriage.  In the marital settlement agreement, both parties waived any claim to alimony from the other.  As part of equitable distribution, the husband’s Army National Guard was divided equally between the parties. A Qualified Domestic Relations Order (QDRO) to divide the pension was completed in 1999.  In 2002, the husband became disabled. At that time, the husband collected his pension and disability benefits without any impact on the pension payout. In 2010 the wife inquired why she had not received any pension payments.  She was advised that a portion of her former husband’s pay was based on disability, which cannot be divided under the Uniformed Services Former Spouses Protection Act. The disability amount is used as an authorized deduction. In this case, once the disability was deducted along with the survivor benefit from the husband’s pay, there was nothing left for the distribution to the wife.

The wife wife filed a post-judgment motion in the family court seeking to compel her former husband to compensate her for the loss of her equitable distribution share of the military pension. The trial court decided to compensate the wife for her lost pension benefit based on the decision in Whitfield v. Whitfield, 373 N.J. Super. 573 (App. Div. 2004).  At the time of the trial court’s decision, the U.S. Supreme Court had not yet decided the case of Howell v. Howell, 137 S.Ct. 1400 (2017).  The trial judge appointed a pension appraiser to determine the value of the wife’s coverture interest in the husband’s pension and, in the interim, ordered the husband to pay the wife $1,800 per month, not as alimony, but as an equitable distribution payment. The trial court denied the wife’s request for alimony because alimony is not a compensation for equitable distribution and the parties waived alimony.

In the matter of  New Jersey Division of Child Protection and Permanency v. A.S.K. (A-50-17 ___ N.J. ___ (App. d744f80a269bdfa75c34d7830ed52c13-1-300x200Div. 2018), the New Jersey Supreme Court reviewed the trial court’s decision to terminate the parental rights of E.M.C. (“Eric”) to his son, A.E.C. (“Adam”) based on the record and the application of the best-interests-of-the-child test. Although the Supreme Court affirmed the decision to terminate Eric’s parental rights, the Court found that the Division of Child Protection and Permanency (“DCPP”) made errors regarding the inability to locate Eric, which delayed the child from receiving permanency for an additional 2 1/2 years. The Supreme Court stated that DCPP’s processes would be enhanced by conducting a new search for a parent at each phase of litigation and implementing procedures that retain a party’s past contact information.

Termination of parental rights is warranted when DCPP establishes by clear and convincing evidence that the codified four prongs of the best-interests-of-the-child test are met. The four prongs of that test are: (1) “The child’s safety, health, or development has been or will continue to be endangered by the parental relationship;” (2) “the parent is unwilling or unable to eliminate the harm facing the child or is unable or unwilling to provide a safe and stable home for the child and the delay of permanent placement will add to the harm. Such harm may include evidence that separating the child from his resource family parents would cause serious and enduring emotional or psychological harm to the child;” (3) whether “[t]he [D]ivision has made reasonable efforts to provide services to help the parent correct the circumstances which led to the child’s placement outside the home and the court has considered alternatives to termination of parental rights;” and (4) whether “[t]ermination of parental rights will not do more harm than good.”

In this case, the child, Adam, was born on November 14, 2009 and he began living with Eric in March, 2012.  Before Adam came to live with him, Eric had last seen him in July 2011. Adam lived with Eric until July 2013. During that time, DCPP received referrals in April 2012 and September 2012. Eric cooperated with both investigations. Because Adam was residing with Eric, an allegation of abuse and neglect against Adam’s mother, A.K. (“Ali”) resulting from the April 2012 referral was deemed unsubstantiated.

It is not uncommon as a family law practitioner to experience a difference in the way the family courts handle cases involving the children of divorced or divorcing spouses (where they are 772bcf531a8ff5549f90c16a75fd1d7f-1-300x200matrimonial cases bearing an “FM” docket number) in the dissolution unit, and children of non-married parents in the non-dissolution unit (those bearing a docket number starting in “FD”).  Non-dissolution cases are typically far more summary in fashion and are handled more quickly than they are in the in the cases of divorcing parents.   The good part of this is that the children’s cases may be processed more quickly and there is less uncertainty in their lives because the children are not enduring a longer, more drawn out litigation than children of divorcing parents sometimes have to survive.  In non-dissolution cases, however, because they often are so summary, the court does not have the opportunity to become as familiar with the facts and circumstances.

In the recently published Appellate Division opinion in the matter of J.G. v. J.H., A-1312-17 (App. Div. Jan. 2, 2019) expressed some disagreement over how summarily a family court judge resolved a custody dispute between unmarried parents.

John was born in 2012 to mother Jane and father Joseph.  In 2014 the parties entered into a non-dissolution order that provided for their agreement to share joint legal custody of John, with Jane having primary residential custody and Joseph having liberal visitation with him.  In 2015 the parties attempted to reconcile and vacated that order.  The reconciliation did not last.  Jane became engaged to another man and became pregnant.  Joseph filed an order to show cause accusing Jane and her fiance of drug use and asserting that she should not leave John alone with her fiance, asserting that he was a known drug user and convicted felon.  Joseph was awarded temporary sole custody of John based on the concern for violence in Jane’s home. The court directed that Jane’s visitation with John be supervised and that it occur outside her home.

It is a social norm for one to state, “I’m sorry to hear that” in response to the hearing the news of a death or divorce among ones friends of family. While it an appropriate response of condolence 607c2384aeca135114c8f77596786655-300x200when a someone dies, is it always appropriate to state the same when there is a divorce?  Maybe not.  In the words of comedian Louis C. K., “Someday, one of your friends is gonna get divorced, it’s gonna happen, and they’re gonna tell you. Don’t go, ‘ohhhh I’m sorry.’ That’s a stupid thing to say. First of all you’re making ‘em feel bad for being really happy, which isn’t fair. And second of all: divorce is always good news. I know that sounds weird, but it’s true, because no good marriage has ever ended in divorce. It’s really that simple.” In my opinion, congratulations may be in order in order.

Deciding to divorce can be an extremely difficult decision to make. Without a doubt, your friend or relative likely experienced the highs and lows associated with a divorce. They have definitely felt the societal induced feeling of failure, especially for women.  Divorce is for many people life altering.  Both parties may not have wanted to divorce.  It can be hard to know what to say to someone who has gone through this.  Instead of ignoring the herculean strength it can take to divorce and dismissively stating, “I’m sorry” thereby potentially resurfacing feelings of loss or failure as a result of your most likely in appropriate and well-intentioned apology, perhaps complimenting your friend or relative on their strength and courage is a better approach. As an attorney, I can tell you that divorce is not something one slipped, tripped and fell on by accident. It takes two to tango, and it takes two to divorce.

Life can be better for everyone involved, including the children, in a divorce and no one should be sorry for that. Staying married for the children is not really for the benefit of the children. How can one think that staying in an unhealthy marriage is something that you should do for yourself or model for your children? Researcher Constance Gager of Montclair State University and her colleagues conducted a national survey involving nearly 7,000 couples and their children, focusing on how harmonious their homes were and whether or not they stayed married. https://www.livescience.com/6648-divorce-bad-kids.html The result was that children who had grown up in high conflict families actually faired better in their own adult relationships whent heir parents divorced and allowed the children to escape that household conflict. The survey also revealed that children of happily married parents did not necessarily go on to have happy marriages.