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At the end of 2017, Congress passed the long awaited Tax Cuts and Jobs Act of 2017, which was a sweeping tax reform act that broadly file000802276456-300x225amended the Internal Revenue Code of 1986.  Tax rates were lowered in general for businesses.  As for individuals, the tax code may be more simplified as the standard deduction and family tax credits were increased, while most personal exemptions were eliminated.  New Jerseyans may have heard and may be disappointed by limiting deductions  for state and local income taxes and property taxes (capped at $10,000), and limiting the deduction for mortgage interest.   For individuals receiving income through pass through entities (ie. partnerships and S-Corporations whose owners individually pay taxes on the business income) the new tax law reduces pass through taxes with a 20% deduction after which a lower tax rate will be applied.

It is difficult to determine with any precision how impactful this new tax law, barely two months old, will be on divorcing or separating parents.   There is as of yet no case law or IRS guidelines.  The most important thing for a divorcing or separating couple at this time to do, in addition to speaking with matrimonial counsel, is to speak to an accountant in order to determine the tax ramifications of your divorce or separation.

At the end of 2017, James P. Yudes, Esq. wrote in his blog about the anticipated impact of the new tax law on divorcing couples.  What about the impact on children and children of divorcing or separating couples?

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If you have listened to local radio in recent years, (certainly those stations geared to a more mature audience), you were hard pressed to miss commercials from a “large” insurance broker toutinginsurance-300x184 his ability to obtain “affordable” life insurance coverage for persons, notwithstanding whether you had various chronic health conditions, took medications, or were otherwise not in the best of shape. Recently, that same insurance broker has been running a new series of commercials clearly geared to divorced or divorcing spouses, who may be in the position of having to secure life insurance coverage for the benefit of their ex, maybe even more than one. In addition to making me chuckle, these commercials made me think about the issue of life insurance and divorce. In this blog post I will briefly discuss this issue as well as some real life considerations regarding same.

It was generally recognized that support obligations, be they alimony or child support, would end upon the happening of certain sets of circumstances, including the death of the payor. Our Federal tax laws mandated that payments had to end upon death if they were to qualify as alimony. Even our state statutes, N.J.S.A. 2A:34-25, provided that alimony shall terminate upon the death of the payor spouse. However, over the last 50 years or so, the courts of this state, grappling with the financial impact a payor’s death would have upon a former spouse or children who were still dependent upon that support, have gradually expanded the extent some sort of “security”, including the maintaining of life insurance, would be authorized, if not required, to address same.

The New Jersey Supreme Court in Grotsky v. Grotsky, 58 N.J. 354 (1971), chose to liberally interpret and apply the “reasonable security for the due observance” of alimony and child support orders language of N.J.S.A. 2A:34-23, to allow courts to require a payor parent to maintain life insurance on his life to secure the “due fulfillment of the [child] support ordered during their minority”. These sentiments were carried forward in regards to alimony in a case of Meerwarth v. Meerwarth, 128 N.J. Super. 285 (Ch. Div. 1974), aff’d 137 N.J. Super. 66 (App. Div. 1975), aff’d 71 N.J. 541 (1976). In that case, the former wife sought permission to obtain at her expense a life insurance policy on her ex-husband’s life and require his cooperation regarding same. The trial court denied this request, concluding that his right to privacy in not submitting himself to a physical examination outweighed any equitable basis or need for this insurance given the ex-wife’s favorable financial position. While both the Appellate Division and the Supreme Court affirmed this decision, the Supreme Court noted that under appropriate circumstances and for good cause, a court could order a divorced husband to cooperate in obtaining insurance on his life for the financial protection of his former wife and his children, citing to the “reasonable security” provision of N.J.S.A. 2A:34-23 for this authority. Finally, in the case of Davis v. Davis, 184 N.J. Super. 430 (App. Div. 1982), The Appellate Division affirmed an order of the trial court which required the payor to obtain life insurance on his life [or create a trust fund] for the benefit of his former spouse to “provide some measure of security… for the payment of alimony in the event of [payor’s] death”, noting that equity cried out for some relief given the formal wife’s precarious financial position, lack of equitable distribution, ill health, inability to work, etc.

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Most people would be shocked to find out that an individual who obtains a final restraining order against their spouse could be ordered to pay alimony to support his/her abuser. The Prevention offile000388004075-3-200x300 Domestic Violence Act (“Act”) specifically states that victims of domestic violence are entitled to financial support from their abusers. However, the Act is silent on whether a victim of domestic violence who is also the income producing spouse has to support the abuser. Continue reading

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On January 17, 2018, the New Jersey Appellate Division decided the case of G.M. v. C.V. (A4820-15). The case involved the appeal of a May 6, 2016 order that denied the defendant’s request to vacate a final restraining order (FRO) entered in 2004. The reason for the denial that Trial Court gave was that the defendant’s motion did not include the transcript of the underlying 2004 FRO hearing. Continue reading

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In the case of M.C. v. G.T., A-4781-15, decided and approved for publication by the Appellate Division on January 2, 2018, the Appellate Division addressed essentially the equitable authority of afile000799318829-2-300x200 family court judge to enter a restraining order without there being a finding of domestic violence. Continue reading

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FAKE NEWS! It seems like every year new words or phrases enter into the lexicon of our increasingly dynamic culture and society. For 2017 the term “fake news” would be at the top of most people’s lists. Largely attributed to President Trump, many believe this refers to news stories that are false or are alleged to be. While this may sometimes be the case, most often the term is used to refer to matters reported in the news media as somehow being a newsworthy or significant when in reality they are not. Continue reading

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file00032137357-300x225The 2017 Tax Reform Act has been signed into law by President Trump. This law significantly changes the tax liability of individuals. For individuals, it preserves the marriage penalty forcing dual income households to file jointly to increase their tax bracket or face the faster escalated tax rates imposed on those married filing separately. The intermediate tax haven for married persons filing separately or head of household is preserved, allowing for some planning in divorce proceedings with regard to filing status. Continue reading

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In this recent decision in the matter of New Jersey Division of Child Protection and Permanency  v. A.B., (A-27-16), the New Jersey Supreme Court reviewed a trial court’s determination that

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defendant A.B. abused or neglected A.F. (her sixteen-year old daughter), that A.B. willfully abandoned A.F.; and that remarks attributed to A.B.’s sister, J.F., were subject to suppression as embedded hearsay. Continue reading

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During the New Year’s season we often reflect on the blessings we have received over the course of the last year and give thanks. Many of us visit family during this time and if we are fortunate enough our parents. This past week, the Sixth Circuit of the United States Court of Appeals affirmed the decision of the United States District Court in the case of Sun Life Assurance Co. v. Jackson that involved the distribution of a deceased father’s life insurance policy proceeds to his daughter even though he failed to change the beneficiary designation to his daughter from his brother. Continue reading

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When custody disputes arise, I often consider the Biblical narrative, 1 Kings 3:16-28,  which tells the story of how King Solomon resolved a custody dispute of sorts between two women who lived 296050aba1c021ff4a7e4cab0ed498d2-3-300x200 in the same home.  The women came before King Solomon, each claiming to be the mother of the same baby boy.   King Solomon called for a sword and rendered his judgment:  He would cut the baby in two so that each woman could receive half.  The first woman did not contest Solomon’s decision, arguing that if she could not have the baby, then neither woman could.  The second woman begged King Solomon to give the baby to the other woman instead of killing the baby. King Solomon declared the second woman as the infant’s true mother, reasoning that as a mother she would give up the baby if she had to in order to save his life. Continue reading