Oftentimes in a relationship, people divvy up work like a team: wife will be the bill payer, husband is responsible for the kids’ transportation, etc. Likewise, we often see one party be more of a saver and the other a spender. In many partnerships, this works, but in some it does not, and people ultimately divorce. With a divorce comes asset division and in many cases support obligations. What happens though when there is an application to modify or terminate that obligation at retirement and the assets that were divided at the time of the divorce have grown considerably for the saver spouse and all but disappeared for the spendthrift spouse? One party can live comfortably off of their retirement income because they have saved their marital assets and grown them considerably but the other has no savings because they spent their share of the marital assets on either poor investments or a lavish lifestyle.

N.J.S.A. 2A:34-23(j)(1), applies to awards entered after the effective date of the statute (post 2014) and provides:

(1) There shall be a rebuttable presumption that alimony shall terminate upon the obligor spouse or partner attaining full retirement age, except that any arrearages that have accrued prior to the termination date shall not be vacated or annulled. The court may set a different alimony termination date for good cause shown based on specific written findings of fact and conclusions of law.

The rebuttable presumption may be overcome if, upon consideration of the following factors and for good cause shown, the court determines that alimony should continue:

(a) The ages of the parties at the time of the application for retirement;

(b) The ages of the parties at the time of the marriage or civil union and their ages at the time of entry of the alimony award;

(c) The degree and duration of the economic dependency of the recipient upon the payor during the marriage or civil union;

(d) Whether the recipient has foregone or relinquished or otherwise sacrificed claims, rights or property in exchange for a more substantial or longer alimony award;

(e) The duration or amount of alimony already paid;

(f) The health of the parties at the time of the retirement application;

(g) Assets of the parties at the time of the retirement application;

(h) Whether the recipient has reached full retirement age as defined in this section;

(i) Sources of income, both earned and unearned, of the parties;

(j) The ability of the recipient to have saved adequately for retirement; and

(k) Any other factors that the court may deem relevant.

Subsection (j)(3) states:

When a retirement application is filed in cases in which there is an existing final alimony order or enforceable written agreement established prior to the effective date of this act, the obligor's reaching full retirement age as defined in this section shall be deemed a good faith retirement age. Upon application by the obligor to modify or terminate alimony, both the obligor's application to the court for modification or termination of alimony and the obligee's response to the application shall be accompanied by current Case Information Statements or other relevant documents as required by the Rules of Court, as well as the Case Information Statements or other documents from the date of entry of the original alimony award and from the date of any subsequent modification. In making its determination, the court shall consider the ability of the obligee to have saved adequately for retirement as well as the following factors in order to determine whether the obligor, by a preponderance of the evidence, has demonstrated that modification or termination of alimony is appropriate.

As the Court in Landers v. Landers noted: “[i]mportantly, subsection (j)(3) elevates the ability of the obligee to have saved adequately for retirement, listed only as a factor under N.J.S.A. 2A:34–23(j)(1)(j), setting it apart from other considerations and requiring its explicit analysis. N.J.S.A . 2A:34–23(j)(3). 444 N.J. Super. 315, 323 (App. Div. 2016).

I could not locate any cases where the obligee’s ability to save for retirement was utilized in the analysis as a reason to deny or grant terminate or modify their alimony, however, there is an interesting unpublished decision attached. In Hagelin v. Hagelin, 2007 NJ Super. Unpub. LEXIS 1983, Wife received $1,423,000 in equitable distribution and Husband received $2,846,000 at the

time of the Judgment of Divorce. Husband was to pay Wife open durational alimony at the rate of $35,000 per year, except if Wife moved from the apartment above the funeral home owned by Husband, the alimony would increase to $60,000 per year. The reason was because many of the expenses: rent, utilities, etc. were being provided for Wife by the business. The parties were divorced in December of 1996.

From April of 1998 through June of 2002, when the motion to modify and terminate support was filed, Husband received $5.488 million from the sale of his business. Only $135,000 remained in 2002. After deducting taxes, alimony, investment losses and medical insurance, the Court found that Husband spent $1,545,000 on “lifestyle” expenses—vacations, automobiles, horseback riding, and incurred $324,443 in credit card activity. The Court estimated that Husband spent approximately $362,500 a year (or $30,00 a month on lifestyle expenses). This spending was so out of line with the marital lifestyle. The Court undertook this analysis to compare Husband’s spending post-divorce to the marital lifestyle. As we all know, the marital standard of living “is an essential component in the changed-circumstances analysis when reviewing an application for modification of alimony.” Crews v. Crews, 164 N.J. 11, 25 (2000). The testimony of a financial-planning expert can be and was used in the case to determine whether the dependent spouse is still dependent upon the level of alimony set forth in the PSA to maintain the lifestyle called for in the MSA.

After reviewing the payments Husband was receiving from the non-compete contract ($177,000 per year), the Court found that he was able to pay the $60,000 alimony. The Appellate Division held, in a footnote, that the Court could have also found that Husband had the means to obtain income from other sources but chose to expend other funds and assets in an extravagant way and in a manner that generated no cash flow. Citing Miller v. Miller, 160 N.J. 408, 422 (1999). The Court found that Wife managed her assets well, even though they were less than Husband’s. The more common scenario is where the obligor has greater assets than the obligee at the time of retirement (perhaps because of greater wages and/or a greater knowledge of investment strategy) and the Court is tasked with considering whether (or to what extent) it will consider the obligee’s choice to spend those assets received at the time of the entry of the Judgment or whether they could have saved them and invested them in order to have generated income for themselves now at retirement.

The issue to consider when preparing an application for termination or modification based on retirement under the pre-amendment statute (j)(3) is the emphasis on a party’s ability to save for retirement and what did the oblige (and maybe the obligor as well) do with the assets distributed at the time of the entry of the Judgment of Divorce. Some considerations may include the RMDs from certain retirement accounts, at what age did one party being collecting SSA, 401k contributions made while the oblige was working (if they worked). All of these may factor into whether or not the application is successful. Hagelin is an interesting case because it tells us that the Court did consider how one party spent the funds rather than saving them post-retirement income generation.

When people hear the term multiparty negotiations, they think UN summit, class action law suit, or patent/trademark disputes.  No one ever thinks divorce because in a divorce you have two parties, right? Well, not always.  During a recent seminar, a mediator was speaking about how she often gets called in on certain cases where there are aunties and uncles involved because she is able to understand the cultural differences and the roles those third parties play in the negotiation of a marital settlement agreement.  Oftentimes if the divorcing parties are young, mom and dad are involved in the mediation because they are holding the purse strings.  Conversely, where the parties are elderly, the adult children may be involved.

 Any one, or all of these situations lead to a multiparty negotiation; the mediator may or may not know it, but it’s a phenomenon that exists and cannot be ignored.  There are several issues that can arise in multiparty negotiations that must be considered: (1) the formation of coalitions, or two or more parties joining together against another party; (2) the process of the mediation itself and ensuring the concerns of the minority groups (the children, aunties, parents) are heard; and (3) the constant adjustment of each party’s BATNA (“Best Alternative to a Negotiated Settlement”) based on the coalitions that are formed and the constant changing settlement agreements.  

 Coalitions are formed between parties where there are common goals or interests.  This is sometimes seen where family members exert pressure on one side or in a grandparent visitation case where one biological parent is deceased and the other biological parent and his/her parents have formed a coalition against the deceased’s parents. Coalitions should be chosen wisely and it is important to consider the defenses to these coalitions before going into mediation.  Keep in mind that the grandparents who formed a coalition with the adversarial spouse/parent today may be estranged from that parent at some time in the future, and so the relationship, and therefore, needs may change.

 The process of managing the interests of all the different parties is something that has to be addressed long before the mediation begins.  The most frustrating thing to occur is for everyone to leave a mediation with what they believe to be a successfully negotiated settlement, go home and share it with the other minor interested parties, only to be told “well, that’s not happening.”  The wiser thing therefore is to begin the mediation preparation by identifying the parties and their interests.  Counsel for the parties can do this with a conference, or if the minor interested parties wish, they can attend the mediation, or that portion of it that affects them; for example, step-parents may be relevant to college contribution, grandparents for visitation and custody.  

 Finally, with more parties comes more settlement offers and therefore more BATNAs.  With a two-party negotiation, each party went into the negotiation with the solid knowledge of what they would do if they did not reach a deal.  A well-prepared negotiator will also be able to (within a reasonable degree of certainty) calculate what the other party’s BATNA is as well.  However, with more than two parties, trying to guess what each person’s BATNA is, or what your BATNA is, based on what happens between A and B is difficult if not impossible.  For example, Wife may go into mediation with the knowledge that Husband has no liquid assets and his largest asset is his pension and 401k; therefore, she has planned on keeping the home, offset by Husband keeping those retirement assets. Unbeknownst to her, Husband’s parents have agreed to lend Husband the money for the buyout as it is important for them to have their grandchildren close to them geographically.  So now Wife’s BATNA has changed as the grandparents are now a party to the negotiations. 

 The most important goal in any negotiation or mediation is to reach an agreement. In order to do this successfully, you must rely on everyone to commit to identify what their interests or concerns are and to engage in problem solving.  Grandma’s concerns have to be heard, even if a party believes them to be minor.  There’s a great book called Breaking Robert’s Rules by Lawrence E. Susskind and Jeffrey L. Cruikshank that talks about how majority rules does not work because you end up with a very unhappy minority (that is not guaranteed to remain quiet).  The best way to handle a multiparty negotiation is to ensure everyone has a seat at the table (directly or indirectly) and that their concerns are addressed.

My Spring semester course on Mediation and Conflict Resolution is coming to an end, as is the Family Law 40-hour Mediation Course. I have read and written about mediation more in the past 3 months that I ever thought I would, so I thought: why not switch it up?

 Today, I made and delivered a birthday cake to a friend: a funfetti cake with buttercream and a single candle on it.  As I was sitting at home, I started thinking “when did we start making birthday cakes and sticking candles on them and singing this song?” Obviously, like everything else in life, I first turned to Google, which then led me down the rabbit hole of Greek gods, Romans and Germans. The history is actually quite interesting.

 First: Why are birthday cakes almost always round? Some say it’s because it’s supposed to be the shape of the moon and the candles were meant to be the stars.  This was a tribute to the Greek goddess Artemis. 

 Second: When did people start having cakes to celebrate birthdays? Many people believe that the Germans were the first to have celebrated birthdays as we know them with cake in the 18th century; it was actually called Kinderfeste and sort of torture for the birthday kid whose cake would be lit in the morning, but not eaten until after dinner. Imagine having to look at that all day! However, there is some evidence that the Romans baked birthday cakes long before that, but only if you were male, famous and turning 50.  Women’s birthdays weren’t celebrated until the 12th century.

 Third: Where did the song “Happy Birthday” come from? The tune came from a song that school teachers would sing called “Good Morning to All,” composed in 1893 by American sisters Mildred and Patty Hill.  The first time the combination of the words and melody of “Happy Birthday to You” appeared was in 1912. No one knows who actually wrote it.  In 1924 Robert Coleman published updated lyrics that make up the popular tune we sing today. It was copyrighted in 1935, with authorship credit given to the Hill sisters. Around that time, the birthday song was worth $5 million.

 Finally, the most popular birth month is September and the most popular cake flavors: chocolate, marble, red velvet and funfetti!

“I don’t know” are the three words an attorney probably doesn’t want to hear her client say in response to the mediator’s question: “What is it that you need in order to move forward?” or “What would you like the parenting schedule to be?” or “What are some options that you can come up with to deal with the debt?” or even the simple “How much do you want for your equity in the home?” But those words are heard frequently throughout mediation sessions.  People oftentimes don’t know what they need or want and that is because they have not discussed their BATNA with their attorneys before coming into mediation.

 BATNA is a party’s Best Alternative to a Negotiated Agreement. Simply put, it is what happens if you walk away from mediation with no agreement. It was a concept introduced by Roger Fisher, William Ury and Bruce Patton in the seminal book Getting to Yes, Negotiating Agreement Without Giving In.  It asks people to look at all of the “what ifs” surrounding the negotiations that are about to take place, and in doing so, they will inevitably see some of the options of resolving the issues at mediation, going to arbitration, or continuing to trial.

 Case in point: Sally and John are going to mediation tomorrow.  The issue is alimony.  Sally is meeting with her attorney to prepare for the mediation.  They are discussing a resolution of the matter, hopeful to settle for a limited duration alimony amount of $12,000 a year for 5 years.  Sally is currently living in the home with John paying the Schedule A expenses.  Sally’s BATNA if the matter is not resolved at mediation tomorrow: she will not lose the roof over her head, and the PL support will continue (at least for now).  Sally’s position is that in order to move out from the home and move forward she needs the support, and without it, she cannot.  So, when the mediator asks Sally what she needs, Sally’s answer will not be “I don’t know,” but rather, it will be “$1,000 a month so I can move out.”  Having a good BATNA (like Sally does here) increases her negotiating power.  She can push John harder; if he wants her out of the house, he will meet her number, or come up with an alternative to allow her needs to be met.

 Preparing for mediation is not only reviewing the ESP statement and CIS, it is also ensuring that a party understands what happens if they do not settle. This can include the cost of litigation, including experts (custody, wage occupation, business appraisals, etc.) and trial retainers, but it also includes the BATNA, so that a client knows when they are sitting there what their true needs are and what they have (or don’t have) if they leave without an agreement.  I will only end with this: we all know that there is no price that can be placed on maintaining control over the decisions that have the greatest impact on your and your children’s lives, so it seems that’s really the greatest BATNA and why mediation is so successful for all parties involved.  

Marital Settlement Agreements (MSAs) or Property Settlement Agreements (PSAs) are lengthy documents. If there are multiple real properties or a child with special needs, they can be even lengthier.  We would like to think that we thought of everything when drafting them, but lo and behold COVID-19 comes along and with it a shortage of toilet paper, mask wearing mandates, the CARES Act and follow up stimulus payments.

 For those of you who do not know, CARES stands for Coronavirus Aid, Relief, and Economic Security Act.  It was signed into law by President Donald Trump on March 27, 2020 and is a $2.2 trillion economic stimulus bill enacted in response to the economic fallout of the COVID-19 pandemic in the United States.  Under the Act, most individuals earning less than $75,000 received a one-time cash payment of $1,200. Married couples making less than $150,000 received a check and families received $500 per child. The incomes were derived from either the 2019 tax returns or if none was filed, then from the 2018 return, and the payment was deposited into the same account that the taxpayer used when filing their taxes.

 On December 29, 2020, a second stimulus payment was authorized and signed into law.  This one was not as clear in how much each person would receive, but generally the amount was $600 for singles and $1,200 for married couples filing a joint return. In addition, those with qualifying children also received $600 for each child. IRS News Release IR-2020-280, December 29, 2020. As of the date of this blog post, President Biden had committed to a third stimulus payment in the amount of $1,400, however, the details are still being worked out.

 Besides being interesting to a handful of you (maybe), why is any of this relevant to family law? The stimulus payments were automatically deposited into the account used on a party’s 2019 or 2018 tax return.  So, if the parties were married in 2019 and had a joint account and divorced in 2020 and Husband kept that account, then the money went into his account. That is a logistical problem.  The legal question is: if the parties filed for divorce in February of 2019, but filed taxes jointly for 2019, then is the stimulus payment marital property and/or how should it be divided?

 The CARES Act and subsequent stimulus payment provided a payment for a “qualifying child.”  But what if 2019 was the year that non-custodial mom claimed the child on her tax return? Then she received $1100 in payments and may receive a third payment, while custodial dad receives none.  In a perfect world, mom would share the payment with dad either on a pro rata income or time-sharing basis or simply fifty/fifty; however, the chances of that happening are about as great as my Cowboys winning the Super Bowl next year.

 So, what do you do? Is there some thought to including a provision in agreements to account for refunds, rebates, reimbursements, government or private reparations or subsidies, etc? Or is it impossible to account for every circumstance in life—especially a pandemic? Hopefully you’ve been stimulated to at least give it some thought ;)

How to Find a Divorce Mediator | 5 Questions to Ask Her and Yourself

The benefits to mediation in a divorce, particularly a contentious one, are many, if the right mediator is selected. So, how does someone find the right mediator? Is there a “one size fits all” for mediators or does each case require a different type of approach?

 The first question you should ask is what type of mediator do you want: facilitative, evaluative or transformative.  Because there is not enough time to discuss all 3, I’ll focus on facilitative and evaluative.  Facilitative is the original type of mediation taught to mediators.  In it, the mediator does not offer her opinion or make recommendations, but rather, seeks to assist the parties in finding solutions for their problems.  In evaluative, the mediator might make recommendations, point out the weaknesses in each party’s case, and are often legal experts.  Evaluative mediation is modeled after settlement conferences held by judges. 

 The second question to ask when looking for a divorce mediator is what interest do you want to protect? This is the why or your concerns; your needs. Notice I did not say wants, but needs.  If you go into a mediation simply making demands, then mediation will not be as successful as if you identify the issues that are important to you.  For example, saying “it’s important to me that I have  enough money for a 2 bedroom apartment in a nice part of town” is an interest. Saying “I need $2,000 a month in alimony” is a position.

 The third question is: are you ready to be completely honest and lay your cards on the table? Mediation does not work if one (or both parties) is holding back. Remember, the mediator is not the decision maker (unless you later decide to make him or her the arbitrator).  Complete transparency is best at this point.

 Are you willing to be creative with solutions?  Oftentimes during divorce mediations, there are so many emotions that it is difficult for the parties to see all of the available solutions.  Rather than looking at an annuity with $50,000 in it and asking whether each party should receive 50%, perhaps the question could be reframed to ask “is there a way to grow the annuity to produce more so that each party receives more?”

 Finally, the last question you should ask is how much control do you want to have in the outcome of your divorce? Chief Justice Burger said that the problem with litigation was that it was “too costly, too painful, too destructive and too inefficient for truly civilized people.” Burger Says Lawyers Make Legal Help Too Costly. (1984, Feb. 13) NYTimes, A13. If you find the right mediator, she will control the communication, separating the people from the problem. 

Successful mediation will help to improve your relationship; hopefully to prevent future disputes, but in the event, they occur, then to at least make future issues more easily resolvable. 

Inns of Court. To a lay person, that term conjures up retreats or perhaps some government owned Marriott or Hilton properties.  To those in the legal profession, however, the Inns of Court are a social group of sorts; a combination of learning and laughing.  So, where did they come from and why should someone join?

 The Inns of Court are a group of four institutions historically responsible for the legal education of attorneys in London.  Their governing bodies are known as benches and have the exclusive right to admit attorneys to practice before the bar.  The 4 Inns are known as the Inner Temple, Middle Temple, Lincoln’s Inn and Gray’s Inn. Every Chief Justice of the United States Supreme Court is an honorary member of the Middle Temple. 

 The members of the Inn are known as: Masters of the Bench: judges, experienced attorneys and law professors; Barristers: lawyers with some experience, usually upwards of 5 years; Associates: newly admitted attorneys; and Pupils: law students.  The categories are deliberate.  The purpose of the Inn is not only to engage in merriment (though that is the best part), but to learn from one another, to share experiences (though not too many war stories) and to help the next generation of lawyers be better than the last. 

 The first Inn of Court was established in the U.S. in 1980 by Chief Justice Burger at the J. Reuben Clark School of Law at Brigham Young University.  Today, there are over 350 Inns of Court, focusing on different fields of practice ranging from federal litigation to family law.  One of those is right here in our backyard: the Aldona E. Appleton Inn of Court.  The Inn's namesake, Judge Aldona E. Appleton, was appointed to the New Jersey Bench, in Middlesex County, in July of 1958 and was sworn in on September 3, 1958 and retired in 1970 upon reaching mandatory retirement.  She was a member of the newly created Juvenile and Domestic Relations Court and only the second female judge appointed to the bench in New Jersey history.  Members of the Middlesex County Bar recall her compassionate and caring approach to resolving family disputes during her tenure as Judge.

The Inn has been 50+ members strong since its inception in 2017. Despite the pandemic, it has continued to meet regularly and put on educational and engaging presentations. It is an opportunity to get together with colleagues once a month during an otherwise isolating time for many.  Many of the issues most of us have been dealing with: Zoom, JEDS, court scheduling, difficult clients, etc., are discussed and oftentimes the judges offer invaluable insider advice.  No specific cases are ever discussed. 

Hopefully if you’ve read this far, you have not only learned a little bit of history about the Inns, but you’re wondering how you can join one.  If you’re interested in family law, there is only one you should be checking into: the Aldona E. Appleton Inn.   
To join or for information, contact:
Lauren A. Miceli, Esq.
Shane and White, LLC
p: (732) 819-9100
e: Send Mail

By now most of us have been in quarantine for 9 months or so. Some were able to return to work on a limited basis, while others unfortunately lost their jobs due to the pandemic. Many married couples who had made the decision to separate or divorce prior to the lockdown are still faced with living together nearly a year later in what can only be described as less than ideal circumstances, while other couples whose marriages might have had small issues are now filing for divorce.

The issue for most divorcing couples is that courts, by and large, have been working remotely since March of 2020. Proceedings have been taking place on Zoom, Teams and telephonically at a much slower pace. Trials and hearings are occurring, but not with the frequency that we would all hope and this creates a backlog of cases in the system. This means that those cases that were scheduled to be heard in April are now being heard in February and so the February cases will be heard in….(well, you get the picture).

So, then what are two people who cannot stand each other, but have to live together because one cannot afford to move out (or refuses to leave), to do? Mediation or arbitration may be the solution at a time like this.

Mediation in family law matters is compulsory in many states. Oftentimes there is a list of trained attorneys or former judges who handle these matters. Some portion (an hour or two) may be complimentary and thereafter there is a set hourly rate. At mediation, the parties (and their attorneys if they have one) meet with the mediator to discuss the issues (child support, equitable distribution, alimony, etc). There is frequently a running between rooms by the mediator and the colloquy “she is at x, would you go to y” in order to get the parties to settle. If the parties resolve their differences usually they leave with a term sheet or some sort of memorandum of understanding and the attorneys will draw up the settlement agreement based on the terms to be circulated for signature and submitted to the Court for finalization. The parties are then divorced.

If the parties are unsuccessful at mediation, they then can return to court for a trial before a judge or they can submit their matter to arbitration. Arbitration can best be described as a private trial. The matter is conducted as formally or informally as the parties agree; they set the rules on the issues to be decided and appealed. The arbitrator hears testimony and renders a decision, just as a judge would in a courtroom. It is essentially a trial, but takes place in a conference room and the arbitrator wears a suit or dress, rather than a robe.

The benefits of both are numerous, especially now. Most high-income individuals do not want their business out in the open; courtrooms are public, so the media can attend. Even for those that are not wealthy, if there is a family business or any other unique circumstance, mediation or arbitration may be better. Finally, mediation especially, gives the parties a sense of power and control over their own lives, which is important when going through something as emotionally charged as a divorce.