Frequently Asked Question #4 (Reducing harm to children)
By
Charles F. Vuotto, Jr., Esq.
Question
“How can I reduce the amount of harm my divorce will cause my children?”
Answer
There are a multitude of things that divorcing parties can do to reduce the negative impact of divorce upon their children. Of course, every family is different and has particular issues that may call for additions or deletions to the following list. However, the following represents a general guide to reducing the negative impact of divorce on children:
1. Keep your emotions in check. Out of control emotions or irrational thoughts lead to imprudent decisions.
2. Litigants should not use their children as bargaining chips or pawns in the divorce litigation.
3. Litigants should not argue or discuss the litigation in the presence of their children.
4. Litigants should attempt to work cooperatively with regard to custody and time-sharing issues, even if it means that their individual goals or desires are not met.
5. Once the parties have decided to divorce, it is essential that they attempt to speak to their children together and show them a united front so that they can see that, although their parents cannot live together any longer, they still have a mother and a father who love and care for them and can work together to preserve their best interests.
6. Litigants should not view their children as spoils of their divorce litigation.
7. Litigants should not enlist their children as couriers or messengers.
8. Litigants should not bad mouth, alienate or undermine the other spouse to or in the presence of the children and should be charged with encouraging the relationship between the children and the other spouse.
9. Litigants should not discuss spousal disputes with or in the presence of the children.
10. Litigants should not interrogate the children about their other parent.
Although the negative impact upon children due to divorce cannot be eliminated, it can be greatly reduced if these basic guiding principles are followed. Children are resilient and can adapt to most situations that are not harmful to their physical, emotional, social, educational or spiritual wellbeing. If parents can put aside what they want and concentrate on what is best for the children, they can learn to work cooperatively and co-parent post-divorce in a civil and respectful manner. If this can be accomplished, it will certainly reduce the harm that children suffer due to divorce.
Sunday, April 18, 2010
Frequently Asked Divorce Question # 3 (Removal)
By
Charles F. Vuotto, Jr., Esq.
“My ex-spouse exercises visitation with my kids, but I want to move with them to another state. Can I go?”
Answer
It depends. As with most issues in divorce, this is a fact sensitive question. The Supreme Court of our State has established that a custodial parent who seeks removal of a child outside of the state of New Jersey over the objection of the other parent must first demonstrate a prima facie case for removal before the court may further consider the removal application. Baures v. Lewis, 167 N.J. at 91, 118 (2001). The moving party has the burden "to produce evidence to establish prima facie that (1) there is a good faith reason for the move and (2) that the move will not be inimical to the child's interests." Id. at 118. The Supreme Court explained:
[the initial burden] will be met for example, by a custodial parent who shows that he is seeking to move closer to a large extended family that can help him raise his child; that the child will have educational, health, and leisure opportunities at least equal to that which is available here, and that he has thought out a visitation schedule that will allow the child to maintain his or her relationship with the noncustodial parent. If, for some reason, the custodial parent fails to produce evidence on the issues to which we have referred, the noncustodial parent will have no duty to go forward and a judgment denying removal should be entered.
Baures, 167 N.J. at 118.
In determining a party’s removal application pursuant to the Bauers standard, the court must examine the merits of that party’s request in the context of twelve factors. Specifically, the Bauers court set forth the factors as follows:
(1) the reasons given for the move;
(2) the reasons given for the opposition;
(3) the past history of dealings between the parties;
(4) whether the child will receive educational, health and leisure opportunities at least equal to what is available here;
(5) any special needs or talents of the child that require accommodation and whether such accommodation or its equivalent is available in the new location;
(6) whether a visitation and communication schedule can be developed that will allow the noncustodial parent to maintain a full and continuous relationship with the child;
(7) the likelihood that the custodial parent will continue to foster the child’s relationship with the noncustodial parent if the move is allowed;
(8) the effect of the move on extended family relationships here and in the new location;
(9) if the child is of age, his or her preference;
(10) whether the child is entering his or her senior year in high school at which point he or she should generally not be moved until graduation without his or her consent;
(11) whether the noncustodial parent has the ability to relocate;
(12) any other factor bearing on the child’s interest.
Id. at 116-17. (emphasis added); see also O'Conner v. O’Connor, 349 N.J.Super. 381, 397 (App. Div. 2002).
It should be remembered that notwithstanding any statutory or case law, the prevailing guiding principal of any court addressing issues concerning children is their best interests. All questions concerning children must be answered in the context of what is best for them, not necessarily the parents.
By
Charles F. Vuotto, Jr., Esq.
“My ex-spouse exercises visitation with my kids, but I want to move with them to another state. Can I go?”
Answer
It depends. As with most issues in divorce, this is a fact sensitive question. The Supreme Court of our State has established that a custodial parent who seeks removal of a child outside of the state of New Jersey over the objection of the other parent must first demonstrate a prima facie case for removal before the court may further consider the removal application. Baures v. Lewis, 167 N.J. at 91, 118 (2001). The moving party has the burden "to produce evidence to establish prima facie that (1) there is a good faith reason for the move and (2) that the move will not be inimical to the child's interests." Id. at 118. The Supreme Court explained:
[the initial burden] will be met for example, by a custodial parent who shows that he is seeking to move closer to a large extended family that can help him raise his child; that the child will have educational, health, and leisure opportunities at least equal to that which is available here, and that he has thought out a visitation schedule that will allow the child to maintain his or her relationship with the noncustodial parent. If, for some reason, the custodial parent fails to produce evidence on the issues to which we have referred, the noncustodial parent will have no duty to go forward and a judgment denying removal should be entered.
Baures, 167 N.J. at 118.
In determining a party’s removal application pursuant to the Bauers standard, the court must examine the merits of that party’s request in the context of twelve factors. Specifically, the Bauers court set forth the factors as follows:
(1) the reasons given for the move;
(2) the reasons given for the opposition;
(3) the past history of dealings between the parties;
(4) whether the child will receive educational, health and leisure opportunities at least equal to what is available here;
(5) any special needs or talents of the child that require accommodation and whether such accommodation or its equivalent is available in the new location;
(6) whether a visitation and communication schedule can be developed that will allow the noncustodial parent to maintain a full and continuous relationship with the child;
(7) the likelihood that the custodial parent will continue to foster the child’s relationship with the noncustodial parent if the move is allowed;
(8) the effect of the move on extended family relationships here and in the new location;
(9) if the child is of age, his or her preference;
(10) whether the child is entering his or her senior year in high school at which point he or she should generally not be moved until graduation without his or her consent;
(11) whether the noncustodial parent has the ability to relocate;
(12) any other factor bearing on the child’s interest.
Id. at 116-17. (emphasis added); see also O'Conner v. O’Connor, 349 N.J.Super. 381, 397 (App. Div. 2002).
It should be remembered that notwithstanding any statutory or case law, the prevailing guiding principal of any court addressing issues concerning children is their best interests. All questions concerning children must be answered in the context of what is best for them, not necessarily the parents.
Frequently Asked Divorce Question #2 (Stock Options)
By
Charles F. Vuotto, Jr., Esq.
“My spouse has stock options at his work, are those considered to be an asset to be divided during our divorce?”
Answer
Although the extent of company’s issuing employee stock options has declined from the levels that existed in the 1990’s, to the extent that a divorcing party has stock options, these are certainly assets subject to equitable distribution in New Jersey. Basically, a “stock option” is “the right to purchase a specified number of shares of stock for a specified price at specified times, usually granted to management and key employees.” The price at which the option is awarded is called the “grant” price; this is usually the market price at the time the options are granted. Black’s Law Dictionary (5th Ed. 1979). See also Treas. Reg. § 1.421-7 (a)(1) (1978); I.R.C. § 1234 (a) (1998). Generally, stock options are incentives to stimulate the efforts of key employees as well as attempts to retain such employees. Generally, there are two basic categories of stock options: (1) incentive stock options (commonly referred to as “ISO’s”) which are qualified or statutory options and (2) non-qualified stock options (which are commonly referred to as “NQSO’s”). Simply put, the difference between the two types of options results from tax compliance requirements at the time of the grant.
Stock Options can be valued using various methodologies, some of which are very complex and go far beyond the space requirements of this short article. One valuation approach is the intrinsic method (i.e., current trading price less strike price). Another valuation method is the Black-Scholes formula (a complex formula taking future risk and volatility into account). Suffice to say that options, like any other asset, can be valued with one party retaining the options and buying out the other divorcing party’s share. Another option is to divide them in kind by way of a Callahan Trust. This refers to the case of Callahan v. Callahan 142 N.J. Super 325 (Ch. Div. 1976).
New Jersey courts, when addressing stock options incident to divorce, emphasize the necessity to balance the “need for definitiveness embodied in the date of complaint rule with the need for flexibility inherent in equitable distribution.” This quote came from the Supreme Court case of Pascale v. Pascale 140 N.J. 583, 612 (1995), which is the seminal case in New Jersey concerning the distribution of stock options.
There is unquestionably a growing trend among the courts of this nation to subject unvested or non-exercisable stock options granted during the marriage to distribution. Further, options may be viewed as income under certain circumstances for purposes of fixing support obligations. As the trend continues, it is critical that litigants be aware of the ever changing case law and that matrimonial attorneys become familiar with these unique types of assets and tailor their discovery demands, negotiation and trial preparation accordingly.
By
Charles F. Vuotto, Jr., Esq.
“My spouse has stock options at his work, are those considered to be an asset to be divided during our divorce?”
Answer
Although the extent of company’s issuing employee stock options has declined from the levels that existed in the 1990’s, to the extent that a divorcing party has stock options, these are certainly assets subject to equitable distribution in New Jersey. Basically, a “stock option” is “the right to purchase a specified number of shares of stock for a specified price at specified times, usually granted to management and key employees.” The price at which the option is awarded is called the “grant” price; this is usually the market price at the time the options are granted. Black’s Law Dictionary (5th Ed. 1979). See also Treas. Reg. § 1.421-7 (a)(1) (1978); I.R.C. § 1234 (a) (1998). Generally, stock options are incentives to stimulate the efforts of key employees as well as attempts to retain such employees. Generally, there are two basic categories of stock options: (1) incentive stock options (commonly referred to as “ISO’s”) which are qualified or statutory options and (2) non-qualified stock options (which are commonly referred to as “NQSO’s”). Simply put, the difference between the two types of options results from tax compliance requirements at the time of the grant.
Stock Options can be valued using various methodologies, some of which are very complex and go far beyond the space requirements of this short article. One valuation approach is the intrinsic method (i.e., current trading price less strike price). Another valuation method is the Black-Scholes formula (a complex formula taking future risk and volatility into account). Suffice to say that options, like any other asset, can be valued with one party retaining the options and buying out the other divorcing party’s share. Another option is to divide them in kind by way of a Callahan Trust. This refers to the case of Callahan v. Callahan 142 N.J. Super 325 (Ch. Div. 1976).
New Jersey courts, when addressing stock options incident to divorce, emphasize the necessity to balance the “need for definitiveness embodied in the date of complaint rule with the need for flexibility inherent in equitable distribution.” This quote came from the Supreme Court case of Pascale v. Pascale 140 N.J. 583, 612 (1995), which is the seminal case in New Jersey concerning the distribution of stock options.
There is unquestionably a growing trend among the courts of this nation to subject unvested or non-exercisable stock options granted during the marriage to distribution. Further, options may be viewed as income under certain circumstances for purposes of fixing support obligations. As the trend continues, it is critical that litigants be aware of the ever changing case law and that matrimonial attorneys become familiar with these unique types of assets and tailor their discovery demands, negotiation and trial preparation accordingly.
Thursday, January 7, 2010
Wednesday, January 6, 2010
Palimony Bill
Please be advised that the palimony bill (A4296) is scheduled for vote in the Assembly on Jan 11.
Over the past nine months, representatives of the Family Law Section have actively opposed legislation which would amend the Statute of Frauds to require that all palimony agreements be set forth in writing. In fact, this Section’s opposition to the legislation dates back to the inception of the legislation in 2004.
In 2004, Assemblyman Michael Patrick Carroll (District 25 -Morris), put forth a proposed amendment to the Statute of Frauds which sought to add, as a non-enforceable agreement, “A promise by one party to a non-marital personal relationship to provide support for the other party, either during the course of such relationship or after its termination.” The express purpose of the legislation was to overturn the ruling in Kozlowski v. Kozlowski, 80 N.J. 378 (1979), which authorized enforcement of a promise of lifetime support by one cohabitant to another in a marital-like relationship, if one of the partners was induced to cohabit by the promise. The court held that the right to such support is found in contract principles and that the contract may be either express or implied. The bill was referred to the Assembly Judiciary Committee on May 10, 2004. On March 6, 2006, identical legislation, A2796, was again introduced by Asm. Carroll and again referred to the Assembly Judiciary Committee.
Over two years passed before Senators Nicholas P. Scutari and Gerald Cardinale introduced S2091 in the Senate on October 2, 2008, reflecting a proposal identical to the prior legislation to amend the Statute of Frauds. The Senate referred S2091 to its Judiciary Committee immediately; the Senate Judiciary Committee released the bill on February 9, 2009 with an amendment to require that written palimony agreements would not be enforceable unless supported by independent legal advice to both parties. Thereafter, Asm. Carroll again introduced the proposed amendment to the Statute of Frauds on (labeled as A3833) on March 9, 2009, where it was again referred to the Assembly Judiciary Committee.
The Executive Committee of the Family Law Section reviewed S2091 on February 19, 2009, voting to oppose the legislation with high priority. The Legislation sub-Committee promptly conveyed the section’s position to the NJSBA. Nonetheless, on March 16, 2009, the Senate passed S2091 with a vote of 21-14. Roll call for the voting can be viewed at http://www.njleg.state.nj.us/bills/BillView.asp.
In April 2009, Edward O’Donnell and Charles Vuotto (then serving as the Chair and Chair-Elect of the Family Law Section, respectively) formed a Palimony Sub-Committee comprised of themselves, Francesca Blanco, Cheryl Connors, Bonnie Frost, Sheryl Seiden, Amanda Trigg and Rebekah Whitmarsh. The Committee undertook the preparation of a comprehensive palimony statute in lieu of an amendment to the statute of frauds. Ms. Connors and Ms. Whitmarsh provided the committee with extensive research on the status of palimony laws throughout the United States, as well as a full recital of the case law in New Jersey which effected palimony claims as of 2009.
On May 6, 2009, representatives from the Family Law Section met with the staff of Assemblywoman Greenstein to voice opposition to A3833. During that meeting, Charles Vuotto, Edward O’Donnell, Bonnie Frost and Amanda Trigg also sought support from Asw. Greenstein for a comprehensive palimony statute in lieu of an amendment to the statute of frauds. At the FLEC meeting on June 9, 2009, members of the Executive Committee were apprised of this meeting and the status of the research by the Palimony sub-committee. Discussions continued at the FLEC meeting on September 8, 2009. At that time, FLEC voted to instruct the palimony committee to draft a statute which reflected the following:
· It shall be a rebuttable presumption that there can be no palimony cause of action without cohabitation;
· A claimant of palimony must establish the claim by a Preponderance of the Evidence;
· The duration of a relationship should be included among the factors for the determination of a palimony claim but it should not be a requirement that the relationship be “long term”;
· Available remedies should include a lump sum payment or periodic payments.
Thanks to the Palimony sub-committee and especially the continued drafting efforts of Cheryl Connors and Rebekah Whitmarsh, in October 2009, the Family Law Section approved a proposed palimony statute to be circulated to the members of the New Jersey Legislature as an alternative to S2091 and A3833. At its October meeting, the NJSBA Board of Trustees voted overwhelmingly to endorse the Section's efforts to develop and present an alternative to S2091 which would add palimony to the statute of fraud requirements. During the course of the discussion, the Board expressed its deep appreciation to the Section for its quick turn around and the quality of the work presented.
Soon thereafter, on November 30, 209, Assemblywoman Linda Stender and Assemblyman Michael Carroll, with Assemblyman John S. Wisniewski as co-sponsor, introduced A4296. Like S2091 and A3833, A4296 sought to require that palimony agreements be in writing and added the additional mandate that “no such written promise is binding unless it was made with the independent advice of counsel for both parties” to mirror the amendment to S2091. The Assembly Judiciary Committee scheduled A3833 and A4296 for review and vote on December 3, 2009.
Senator Scutari agreed to participate in a conference call concerning S2091 on December 2, 2009. During that call, the Senator held firm to his intention to secure the passage of this legislation based in part upon his interpretation that the current case law on palimony actually creates rights tantamount to common law marriage. Since New Jersey law expressly prohibits common law marriage, the Senator opined that the law should likewise prohibit palimony claims and permit only written contracts for support between non-married persons.
In anticipation of the meeting of the Assembly Judiciary Committee on December 3, 2009, where Todd Sidor of the NJSBA and Amanda Trigg planned to speak in opposition to A3833, the NJSBA wrote to members of the Assembly Judiciary Committee to share our proposal for an alternative approach: a comprehensive statute to establish and define palimony claims under New Jersey law which would actually circumscribe the scope of claims, compared to the existing case law.
Assemblywoman Stender presented A4296 to the Assembly Judiciary Committee and asked for its vote to release the bill from committee. The Committee then heard from members of the public who supported the legislation and finally, from the NJSBA. Although the Committee acknowledged that it knew of the existence of the proposed palimony bill supported by the NJSBA, and the members listened politely to the positions that Amanda offered in opposition to A4296, it voted unanimously to release the bill from Committee and then to present the legislation to the Assembly.
As of December 17, 2009, the Assembly’s vote on A4296 had been tabled until January 2010. The Family Law Section, through the NJSBA, continues to advocate for consideration of its proposed palimony statute instead of the drastic amendment to the statute of frauds.
Please be advised that the palimony bill (A4296) is scheduled for vote in the Assembly on Jan 11.
Over the past nine months, representatives of the Family Law Section have actively opposed legislation which would amend the Statute of Frauds to require that all palimony agreements be set forth in writing. In fact, this Section’s opposition to the legislation dates back to the inception of the legislation in 2004.
In 2004, Assemblyman Michael Patrick Carroll (District 25 -Morris), put forth a proposed amendment to the Statute of Frauds which sought to add, as a non-enforceable agreement, “A promise by one party to a non-marital personal relationship to provide support for the other party, either during the course of such relationship or after its termination.” The express purpose of the legislation was to overturn the ruling in Kozlowski v. Kozlowski, 80 N.J. 378 (1979), which authorized enforcement of a promise of lifetime support by one cohabitant to another in a marital-like relationship, if one of the partners was induced to cohabit by the promise. The court held that the right to such support is found in contract principles and that the contract may be either express or implied. The bill was referred to the Assembly Judiciary Committee on May 10, 2004. On March 6, 2006, identical legislation, A2796, was again introduced by Asm. Carroll and again referred to the Assembly Judiciary Committee.
Over two years passed before Senators Nicholas P. Scutari and Gerald Cardinale introduced S2091 in the Senate on October 2, 2008, reflecting a proposal identical to the prior legislation to amend the Statute of Frauds. The Senate referred S2091 to its Judiciary Committee immediately; the Senate Judiciary Committee released the bill on February 9, 2009 with an amendment to require that written palimony agreements would not be enforceable unless supported by independent legal advice to both parties. Thereafter, Asm. Carroll again introduced the proposed amendment to the Statute of Frauds on (labeled as A3833) on March 9, 2009, where it was again referred to the Assembly Judiciary Committee.
The Executive Committee of the Family Law Section reviewed S2091 on February 19, 2009, voting to oppose the legislation with high priority. The Legislation sub-Committee promptly conveyed the section’s position to the NJSBA. Nonetheless, on March 16, 2009, the Senate passed S2091 with a vote of 21-14. Roll call for the voting can be viewed at http://www.njleg.state.nj.us/bills/BillView.asp.
In April 2009, Edward O’Donnell and Charles Vuotto (then serving as the Chair and Chair-Elect of the Family Law Section, respectively) formed a Palimony Sub-Committee comprised of themselves, Francesca Blanco, Cheryl Connors, Bonnie Frost, Sheryl Seiden, Amanda Trigg and Rebekah Whitmarsh. The Committee undertook the preparation of a comprehensive palimony statute in lieu of an amendment to the statute of frauds. Ms. Connors and Ms. Whitmarsh provided the committee with extensive research on the status of palimony laws throughout the United States, as well as a full recital of the case law in New Jersey which effected palimony claims as of 2009.
On May 6, 2009, representatives from the Family Law Section met with the staff of Assemblywoman Greenstein to voice opposition to A3833. During that meeting, Charles Vuotto, Edward O’Donnell, Bonnie Frost and Amanda Trigg also sought support from Asw. Greenstein for a comprehensive palimony statute in lieu of an amendment to the statute of frauds. At the FLEC meeting on June 9, 2009, members of the Executive Committee were apprised of this meeting and the status of the research by the Palimony sub-committee. Discussions continued at the FLEC meeting on September 8, 2009. At that time, FLEC voted to instruct the palimony committee to draft a statute which reflected the following:
· It shall be a rebuttable presumption that there can be no palimony cause of action without cohabitation;
· A claimant of palimony must establish the claim by a Preponderance of the Evidence;
· The duration of a relationship should be included among the factors for the determination of a palimony claim but it should not be a requirement that the relationship be “long term”;
· Available remedies should include a lump sum payment or periodic payments.
Thanks to the Palimony sub-committee and especially the continued drafting efforts of Cheryl Connors and Rebekah Whitmarsh, in October 2009, the Family Law Section approved a proposed palimony statute to be circulated to the members of the New Jersey Legislature as an alternative to S2091 and A3833. At its October meeting, the NJSBA Board of Trustees voted overwhelmingly to endorse the Section's efforts to develop and present an alternative to S2091 which would add palimony to the statute of fraud requirements. During the course of the discussion, the Board expressed its deep appreciation to the Section for its quick turn around and the quality of the work presented.
Soon thereafter, on November 30, 209, Assemblywoman Linda Stender and Assemblyman Michael Carroll, with Assemblyman John S. Wisniewski as co-sponsor, introduced A4296. Like S2091 and A3833, A4296 sought to require that palimony agreements be in writing and added the additional mandate that “no such written promise is binding unless it was made with the independent advice of counsel for both parties” to mirror the amendment to S2091. The Assembly Judiciary Committee scheduled A3833 and A4296 for review and vote on December 3, 2009.
Senator Scutari agreed to participate in a conference call concerning S2091 on December 2, 2009. During that call, the Senator held firm to his intention to secure the passage of this legislation based in part upon his interpretation that the current case law on palimony actually creates rights tantamount to common law marriage. Since New Jersey law expressly prohibits common law marriage, the Senator opined that the law should likewise prohibit palimony claims and permit only written contracts for support between non-married persons.
In anticipation of the meeting of the Assembly Judiciary Committee on December 3, 2009, where Todd Sidor of the NJSBA and Amanda Trigg planned to speak in opposition to A3833, the NJSBA wrote to members of the Assembly Judiciary Committee to share our proposal for an alternative approach: a comprehensive statute to establish and define palimony claims under New Jersey law which would actually circumscribe the scope of claims, compared to the existing case law.
Assemblywoman Stender presented A4296 to the Assembly Judiciary Committee and asked for its vote to release the bill from committee. The Committee then heard from members of the public who supported the legislation and finally, from the NJSBA. Although the Committee acknowledged that it knew of the existence of the proposed palimony bill supported by the NJSBA, and the members listened politely to the positions that Amanda offered in opposition to A4296, it voted unanimously to release the bill from Committee and then to present the legislation to the Assembly.
As of December 17, 2009, the Assembly’s vote on A4296 had been tabled until January 2010. The Family Law Section, through the NJSBA, continues to advocate for consideration of its proposed palimony statute instead of the drastic amendment to the statute of frauds.
Saturday, December 19, 2009
Question (Common Errors):
What are the most common financial mistakes in a divorce?
Answer:
The following represent the ten most common financial mistakes that people make as they proceed in a divorce action.
1. One of the most time consuming and costly aspects of divorce is the process of gathering information and documentation, commonly referred to as “discovery.” This process can be greatly reduced if a divorcing litigant would thoroughly inspect the contents of his or her home and make copies of all documents contained therein. Admittedly, this is a daunting task. Many people do not wish to engage in this task. It is time consuming and costly. However, the time and cost associated with inspecting one’s own home and copying all documents is far less than what will be spent if the same information and/or documents must be obtained through formal discovery in the course of the divorce litigation.
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