Sometimes Honesty is Still the Best PolicyApril 15, 2016
In the recently published decision of Taormina-Bisbing v. Bisbing, the Appellate Division examined the effect of a non-relocation agreement on a subsequent request by one parent to relocate to another state.
The case involved a relocation application, which is what a primary custodial parent files when he or she want to move out of state with the children. These cases are generally governed by a case called Baures v. Lewis, 167 N.J. 91 (2001). Under Baures, the moving party must first show there is a good faith reason for the move. Then, they must demonstrate the move will not be “inimical” to the child’s interests. There are 12 factors a court must assess in conducting a Baures analysis, but overall it’s a relatively easy standard to meet. A non-custodial parent seeking to relocate with the children is subject to a different standard. Because he/she is essentially asking the court for a change in custody, the request is determined by conducting a “best interest of the child” analysis. This is a much more difficult standard.
The parties in Bisbing separated in August of 2013. A few months later, the Wife began a long-distance relationship with man residing in Utah who had children from a previous marriage. The parties eventually entered into a Marital Settlement Agreement (“MSA”) in March 2014 and were divorced in April 2014. In their MSA, they agreed the Wife would have primary residential custody of the parties’ 8-year old twin girls on the condition that she would not relocate out of state. She also agreed to give the Husband “broad reasonable and liberal parenting time”.
One month after the divorce, the Wife informed the Husband she was quitting her job to become a stay-at-home mom (which she did). About eight months later, she called the Husband and told him she was marrying her significant other from Utah and asked for his consent to relocate with the children. The Husband refused and the Wife filed a motion. Without conducting a plenary hearing – which is usually required in relocation cases – the trial court found in favor of the Wife and allowed her to move to Utah. The Husband appealed. The Appellate Division reversed and remanded the case back to the trial court with a roadmap for a plenary hearing.
First, the trial court must determine whether the Wife negotiated the MSA in bad faith. In other words, the court must first decide whether the Wife knew of her plans to move to Utah when she was negotiating the MSA. If the Wife knew, she essentially manipulated the situation to obtain residential custody so her removal application would be subject to the more favorable (Baures) standard. Under such circumstances, the Court instructed, the Husband would have to be restored to the position he was in before the Final Judgment of Divorce. The trial court would then apply the best interest standard and make a new determination on the issue of custody. This would force the Wife to prove it would be in the children’s best interest to stay with her and move to Utah.
If, however, it is found that she did not negotiate in bad faith, the trial court should next consider whether the Wife proved a substantial unanticipated change in circumstances warranting avoidance of the agreed-upon non-relocation provision in the MSA. This would trigger a Baures analysis, which would require the Wife to show only that moving with the children is not inimical to the children’s interest.
The Bisbing decision does not necessarily clarify an ambiguous issue or create a new test or standard to be applied in relocation cases. However, the Appellate Division did openly acknowledge a somewhat harsh reality of the laws of this State: once a parent obtains primary residential custody, it’s much easier for him or her to obtain an Order permitting an out-of-state relocation (since the burden would be placed on the parent who wants to stay in New Jersey to show that removal/relocation is against the children’s interests). Matrimonial practitioners should take time to explain this to clients and ask more questions regarding future plans when negotiating settlement agreements. Moreover, although it’s still not entirely clear where to draw the line, this case seems to suggest that a party who knows or strongly suspects circumstances are likely to change soon after an agreement is signed, may later be accused of “negotiating in bad faith”. Therefore, it is important for a party to disclose any intentions he or she may have of moving out of state, marrying, etc., prior to signing an agreement, as these major events typically constitute a change in circumstances warranting a modification of custody/parenting time, alimony/child support, or even equitable distribution.
How to Protect Assets with New Alimony StatuteSeptember 16, 2014
With the growing trend to modify alimony laws, partners who live in a marriage where the other party earns substantially more may need greater protection through prenuptial agreements. There is no longer a guarantee that the supported spouse will be supported for life, and upon divorce they may be surprised to learn just how short in duration their alimony may be. While a prenuptial agreement provides some protection, at the end of the marriage the supported spouse may need to consider relief such as a higher share of equitable distribution, a portion of the retirement accounts, and rehabilitative alimony to cover education and job training. This may put greater importance on seeking rehabilitative alimony for the supported spouse. Rehabilitative alimony is awarded based upon a plan in which the payee shows the scope of rehabilitation, the steps to be taken, and the time frame, including a period of employment during which rehabilitation will occur. The payee may also seek reimbursement alimony, which may be awarded under circumstances in which one party supported the other through an advanced education. Although the amendments appear to have made it easier for the payor spouse to retire and stop or modify his or her alimony payment, the payor must also consider protecting assets to ensure their stability upon retirement. With the reform there will be new challenges for divorcing couples depending on whether they are the paying spouse of the supported spouse. 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. 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 changes may affect them.
How Do You Divide a Pension Upon Divorce?December 30, 2013
For many families, their 401(k) or pension is the largest asset after the marital home. When determining how to divide the asset upon divorce, it is especially important to understand the different methods of valuation. In New Jersey, there are three accepted methods for valuing a defined-benefit pension plan.
Present-Value Offset Distribution
Under this method, the pension is valued as of the date of complaint, as if the pensioner-spouse terminated participation in the plan as of that date. The non-pensioner spouse receives the present value, offset against the value of another asset. Often this method is used when the parties agree that one will receive the marital home with the other receiving the pension.
When using deferred-distribution a court must first calculate what is called the coverture fraction. The coverture fraction is the percentage of the pension that is subject to equitable distribution based on the length of the marriage. For example, if the pensioned spouse was a member of the pension for ten years, but was only married for five of those years the coverture fraction would be 5/10 and only 50% of the pension would be subject to equitable distribution.
Once the coverture fraction is determined, the parties must obtain a Qualified Domestic Relations Order (“QDRO”) to distribute the non-pensioner spouse’s share upon retirement of the pensioner spouse. It is important to know that under this method the parties are dividing a benefit that is contingent upon the pensioned spouse reaching retirement age. Additionally, both parties must pay their respective tax consequences.
This last method is a hybrid of the deferred-distribution, where the non-pension spouse receives the current value of any non-contingent portion of the pension as well as their share of the deferred-distribution if/when the pensioned spouse retires.
A recent unpublished New Jersey Appellate Court decision, Tominus v. Tominus, No. A-0202-12T1, 2013 WL 5658460 (N.J. App. Ct. Oct. 18, 2013), held that courts must consider each of the possible distribution methodologies. A court may only deviate from one of the three methods after making appropriate findings of fact. The decision is a reminder of how complex pension division can be and just how important it is to complete it in the most equitable way possible.
- Child Support
- Equitable Distribution
- Business Valuation
- Premarital Agreements
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