College Costs After Divorce: Agreement for Child to Take Out Loans Rendered UnenforceableAugust 9, 2018
Once again, New Jersey provides a conflicting remedy for a child of divorce attending college compared to a child in an intact family. In an unpublished (non-precedential) decision, the Appellate Court affirmed a trial court order finding that a child was not bound by a property settlement agreement requiring her to apply for college loans. Carl J. Soranno, Esq. of the Family Law Department previously wrote on this issue for the New Jersey Law Journal in January of 2015. Unfortunately, it appears that the situation for divorced parents has only gotten worse.
The parents in M.F.W. v. G.O. were divorced in 2003. At the time their daughter was five years old. The parties entered into a property settlement agreement which required both parents to contribute toward college expenses. The Agreement also required their daughter to apply for all “loans, grants, aid, and scholarships available to her, the proceeds of which shall be first applied to college costs.” In 2016, the daughter was accepted at Georgetown University – a school with a first semester tuition of over $30,000. The parties then filed motions over the payment of the daughter’s education costs and child support (among other issues not addressed in this post).
On the issue of college costs, the trial court ruled that it was “unfair and unjust” to require the child to apply for and utilize “loans, grants, aid, and scholarships” before the parents would be required to contribute. The court also found a change in circumstances warranting a modification of the Agreement; i.e., both parents’ incomes and assets had increased since the divorce. Consequently, the court determined that the parties could afford to send their daughter to Georgetown University without requiring their daughter to apply for loans first. The Appellate Division affirmed the trial court’s decision, which was reached without a plenary hearing. The Court wrote that “because it was the parents’ obligation to pay for college and they had the ability to do so” it was unfair for the daughter to obtain loans.
The M.F.W. v. G.O. decision is another blow to divorced parents. While intact families can make the decision about whether and how they want to contribute to their child’s college education, divorced parents are forced to abide by a judge’s determination on how to finance college. The parents in M.F.W. v. G.O. tried to make their own decision in their settlement agreement on how to pay for college, only to have the court reject their agreement in favor of the child. The provision included in the parties’ settlement agreement was standard and is included in many settlements. Although the parents’ income had increased (from approximately $130,000 per year combined to $300,000 per year combined), it will still be difficult to pay tuition of over $30,000 per semester with no financial contribution from the daughter. It is discouraging that parties could enter into these terms only to find out years later that they are unenforceable. In sum, divorced parents who litigate over college costs have little to no control over the outcome.
Although the bulk of the M.F.W. v. G.O. decision creates a legal headache for divorced parents and family law practitioners, the opinion did affirm the trial court’s decision not to hold a plenary hearing on the issue of college costs and child support. Most prior decisions on similar issues confirmed the need for a plenary hearing – and thus created a significant cost to any litigant seeking the relief. Nevertheless, the M.F.W. v. G.O. decision confirms the risk for parents litigating college costs. Although avoiding a plenary hearing can save money for a client, the risk over what the judge will order regarding college costs outweighs any benefit.
A Warning to Parents Litigating College Expenses in the Family CourtFebruary 24, 2017
In a recent decision, Ricci v. Ricci, the Appellate Division addressed emancipation and parents’ obligation to pay college costs for a child who has left the parent’s home. This case is unique in that it involved divorced parents who agreed their daughter, Caitlyn, should be emancipated. Caitlyn disagreed and legally intervened, causing years of litigation which – according to the Appellate Division – has only just begun.
There was no dispute that Caitlyn had disciplinary problems which began in high school. These issues, which continued after Caitlyn graduated in 2012, caused significant family strife. In February 2013, at the age of nineteen (19), Caitlyn moved from her mother’s home to reside with her grandparents. Based on Caitlyn’s conduct and what the Ricci parents perceived to be an obvious desire to be independent of their control, Caitlyn’s parents agreed it was no longer necessary or appropriate to continue supporting their daughter financially. The parents signed a Consent Order emancipating Caitlyn and stopping child support.
Legal action followed, and Caitlyn asked the Court to vacate the Consent Order and require her parents to provide financial support for college. The parents objected, but two Orders were subsequently entered against them “un-emancipating” Caitlyn and requiring them to contribute towards her college tuition. The Ricci parents appealed.
The Appellate Division’s decision outlined the law governing emancipation and college contribution in New Jersey, and found that neither issue was properly considered. The Court first advised there should have been an examination of the events triggering Caitlyn’s departure from her mother’s home in 2013 and her subsequent emancipation. Following existing law, the Court advised: when determining if a child should be emancipated, judges must focus on whether that child has moved beyond the influence of his or her parents and obtained total independence from them.
Second, the Court could not uphold the conclusion that Caitlyn had been un-emancipated, since the trial court did not make the required findings or hold a plenary hearing (essentially a shortened trial) on the issue. Because there was no requisite finding of un-emancipation, the Order requiring the Riccis to pay for Caitlyn’s college expenses was also improper and had to be vacated. In remanding the matter back to the trial court for a hearing, the Court underscored that the threshold question of emancipation is fact-sensitive and must precede any consideration of a parent’s obligation to contribute towards the cost of college. In other words, Caitlyn will first have to prove she was un-emancipated before the trial court can conduct an analysis about whether her parents should be required to contribute towards her college expenses.
The Appellate Division got it right in the Ricci case; i.e., the Court identified a series of procedural mistakes and ultimately remanded the case to the trial court for the proper proceedings. That’s because under New Jersey law, any time there is a significant factual dispute between the parties (which almost always occurs in Family Court matters), a plenary hearing is required. But there is some truth to the legal maxim “justice delayed is justice denied”, and plenary hearings often take months or even years to complete. Therein lies the issue. By affording the Riccis their “day in court”, the Appellate Division effectively ensured this litigation won’t be ending soon. Practically speaking, the Riccis could be sharing the cost of Caitlyn’s wedding before they resolve college costs.
Despite its holding, the Appellate Division acknowledged the trial court judges in this case made the best equitable decisions based on what was before them. They did so without requiring a plenary hearing – recognizing the limited resources of the parties and the court. This type of “swift justice” is something practitioners demand on a regular basis. However, judges will often avoid this because it’s technically contrary to applicable law and leaves most litigants feeling unsatisfied. The bottom line: litigation in Family Court is often a “no-win” for both parents and children. Although easier said than done, a family feud is best resolved without involving the courts and it’s worth exploring mediation or other forms of dispute resolution.
Important Changes to Child Support and Emancipation in New JerseyFebruary 8, 2016
The State of New Jersey continues to look for ways to streamline the financial aspects of matrimonial cases with the recent supplement to the statute on child support, which was signed into law by Governor Christie on January 19, 2016. The new child support statute hopes to resolve issues that previously plagued cases when children reached the age of emancipation, but will likely cause confusion and litigation when it goes into effect on February 1, 2017.
The most significant change under the new statute is that child support can terminate without a court order when a child turns 19. It then becomes the recipient’s obligation to demonstrate that child support should continue, either because the child is still in high school or pursuing a post-secondary education (such as college), or has a physical or mental disability. Previously, the burden was on the paying parent to petition the court for an Order emancipating their child. Now, this process can happen automatically.
To effectuate the new procedure, the statute calls for notices to be sent to parents who pay and receive child support through Probation. Probation must provide two notices to parents advising them that the child support will terminate. The first notice must be sent 180 days prior to the child’s 19th birthday and the second must be sent 90 days later. If child support is not paid through Probation (meaning, one parent pays the other directly) there will be no notice, and if there is no property settlement agreement or governing order, the payor can automatically stop paying. In that case, the recipient would need to show cause why child support should resume.
In addition to the automatic termination of child support, the new statute also states that child support will not continue after a child turns 23 years old. Under existing case law, there was no “cut off” point for child support. Though, this particular clause does not demonstrate a significant shift in the law because many settlement agreements include a final age when child support will terminate. Additionally, most parents consider the child’s 23rd birthday as an end date for support, based on the presumption that their child will have graduated from college by then and established some level financial independence.
There are several issues with the new statute that will likely occur in a year when parents begin to be affected by the changes. First, parents who do not pay or receive child support through Probation may have little notice of the changes. This will be detrimental to the paying parent, who may continue to make payments without knowledge of his or her right to stop, as well as the recipient, who may be confused and frustrated when the other parent suddenly stops making payments. Second, the statute will have little to no change for parents with multiple children under the age of 19, as any modification of child support after one child’s emancipation will require consent or court involvement. Third, the statute as originally drafted allowed a child to bring a claim on their own behalf for child support to continue beyond the age of 19. But since that language was removed, only a custodial parent can petition for continued child support. Although it is rare for children to have to move for child support, the statute now expressly prevents it.
As the statute goes into implementation in February of 2017, we will likely see other issues arise and gain more insight as courts make decisions based on the changes. In the meantime, parents have one year to educate themselves on the law and determine how the changes will affect their families. Please contact our family law department if you have further questions about the statute and how it may affect your child support award or payments.
How New Alimony Statute will Effect Millennials and Generation XSeptember 19, 2014
The alimony reform movement aligns with the changes in family dynamics in Millennials and Generation X. Couples are entering marriage later in life after completing secondary education and beginning their careers. The new alimony laws reflect these changes and recognize that upon divorce, the spouses are not necessarily on unequal ground with regard to earning capabilities. The notion that one partner requires support for life is becoming antiquated in generations where women outnumber men and colleges and universities. That being said, some new laws contain a formulaic approach to the alimony calculation, which removes a courts ability to analyze the unique circumstances of each family to determine fair and equitable awards. The extent to which the new law will affect future alimony awards is unknown, but they will certainly require skilled counsel to assist clients in understanding the changes and how they might be applicable to their particular case. The new law has implications for younger adults that are marrying and may now require planning at the outset with the use of premarital agreements and other mechanisms to ensure ongoing support in the event of divorce. Brach Eichler's family law department stands poised to assist anyone dealing with a matrimonial controversy or is planning to marry and can assist with questions and concerns involving how these sweeping new changes may affect them.
Child's Right to SupportApril 7, 2014
News headlines across the country took sides over a New Jersey Superior Court case where 18 year-old Rachel Canning sued her parents over their failure to pay her high school tuition, child support, and college tuition. This would be a run of the mill case except for one fact; the family is still intact with both parents married.
The Canning case raises an interesting question regarding the right of the child to support. In New Jersey courts have the power to order divorced parents to pay child support and college costs for their children. The applicable case law requires a fact sensitive investigation to determine whether divorced parents are required to contribute to their child’s college education under the Newburgh v. Arrigo case. Although the child is most likely over the age of 18, the parents may still have a duty to provide support until emancipation, a determination that is not solely based on age. Up until the Canning case, the law has only been applied to children of divorced parents, essentially creating the argument that children of divorced parents have more rights than children of intact parents.
Rachel Canning recently dismissed her case after she moved back home with her parents, however the discussion of a child’s right to support during college will certainly continue. On March 24th, the New Jersey Senate Judiciary Committee approved a bill that would terminate child support once the child turns 19. Although a parent may petition for support to continue beyond the age of 19, the bill places that burden on the person receiving the funds, instead of on the person responsible for paying the support. As with previous cases, the bill makes no distinction between children of intact families and children of divorced families.
While much of the state has already made up their mind on the Rachel Canning case, the law is still unclear. Because the case was dismissed, we still do not know whether a judge would be willing to order child support for a child of an intact family, however as the law stands, if the child is not emancipated, the judge may have no other choice. Children, no matter what their family dynamic, have a right to support under the current laws. Therefore, it should make no difference whether the parents are married, separated, or divorced.
Child Support Modification Based on Child in College - Plenary Hearing Always Necessary?October 30, 2013
As more parents send their children to college, the issue of how to calculate child support for a child living away from home has increasingly become a concern. In 2012, the Appellate Division in Jacoby v. Jacoby attempted to clarify how child support should be calculated for a child living away at college.
While support for children under the age of 18 may be calculated using the New Jersey Child Support Guidelines, the Jacoby decision held that it would be unusual to apply the guidelines to a child attending college away from home because there are many expenses associated with a child in college that are not factored into the guidelines. The Jacoby decision even goes so far as to say that child support may increase for a child in college. Importantly, the court held that a child attending college away from home constitutes a change in circumstances, warranting a review of child support.
The Jacoby decision seemed to provide a clear answer to the calculation of child support for children away at college, but it simultaneously opened the door to an extremely fact sensitive investigation. Now courts must consider all the potential expenses incurred for the college student as well as possible grants, loans, scholarships and other income sources from the student.
In the recent, unpublished, Appellate Court decision, Freeman v. Freeman, the court remanded the issue of child support for the child attending college. The court held that the changed circumstances warranting a modification in child support was a fact sensitive question and that "a plenary hearing ordinarily would be required." The Freeman decision is not alone, and is just one example of the hurdles a parent may face when seeking a child support modification. What does this mean for the parent seeking a modification? This could spell a costly motion or even a plenary hearing to determine child support if the parents cannot agree.
For more information or if you would like to speak with an attorney, contact Diane Famula, Family Practice Coordinator at 973-364-8323 or firstname.lastname@example.org.
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