Risa A. Kleiner, Esq.

May 31, 2011

On August 15, 2010, Governer Patterson signed into law a no-fault divorce law in New York State permitting couples to get divorced without alleging fault.  Instead, they can now divorce by simply alleging irreconcilable differences, incompatibility, lack of communication or mutual consent in their divorce complaint.  New York is nearly 40 years behind New Jersey in providing couples with a means of divorcing each other without allegations of cruelty, adultery, abandonment  or other fault grounds.  In its 1971 Divorce Reform Act, the NJ Legislature acknowledged the changing times by permitting the parties to divorce without alleging fault if they had been separated for at least 18 months.  And in January 2011, no-fault divorce in NJ was expanded even further by permitting parties to divorce based on irreconciable differences for a 6 months or more.

“No-Fault” divorce does not mean that the parties have no issues to resolve.  While it is true that more than 95% of cases ultimately settle without a full trial and are finalized with a written Agreement, thus making them “uncontested” at least by the time they reach the court, the meaning of “no-fault divorce” applies to the grounds for divorce, not to whether there are issues to be resolved.  In a “no-fault” divorce, couples need not cast stones at each other to convince the court that they do not have to remain married.  The Judge will not need or want to hear testimony on who did what to whom as behavior, unless it rises to the level of egregious and unconscionable acts, will not be an issue.

So, is a no-fault divorce faster?  Not necessarily.  If the parties cannot reach agreement on issues such as custody, child support, alimony and the division of assets, the divorce can be just as contentious and drawn out as a fault divorce.  The ”cause of action” will not be an issue if the case goes to trial, but the judge will have to decide the other issues if the parties are unable to settle them. 

Is a no-fault divorce cheaper?  Again, it depends on whether, through negotiation or mediation, the parties are able to resolve issues without going to court.  One general benefit of filing a no-fault complaint for Divorce is that it does not have to contain accusations against a spouse.  It merely states that the marriage has broken down, cannot be repaired and one party is seeking to end it.  By avoiding negative accusations, the parties are more likely to be a able to put emotion aside and focus on the issues.  While not always easy, this can save the parties thousands of dollars in counsel fees.

For many years, women’s groups actively contested the implementation of no-fault divorce.  They believed that women would be abandoned in droves and their financial status diminished as a reult of the divorce.  But, a 2000 study confirmed that women initiate the divorce in nearly 2/3 of all cases.   Few divorce complaints in New Jersey are now filed on fault grounds.

For more information about handling your divorce, contact Risa A. Kleiner, Esq. at 609.951.2222 or via email at risa@rkleinerlaw.com

May 3, 2011

NJ Divorced parents who help fund a child’s college education are now entitled to see their child’s transcript.  According to a recent trial court case, Van Brunt v. Van Brunt,  a requirement to provide this information does not violate the Family Educational Rights and Privacy Act.  A child or that child’s custodial parent can no longer simultaneously assert that the child is unemancipated (and therefore entitled to support) but not required to prove their status as a full-time student in good standing.

Sadly, parents often refuse to cooperate and communicate with each other after a divorce. The non-custodial parent may not be kept in the loop with respect to a child’s educational status.  In the past, some children and their Primary Parents have refused to provide proof of the child’s academic status, claiming protection under the Act.  The non-custodial parent then remains in the dark, forced to pay child support for a child who may not be attending school on a full-time basis or who has failed to meet academic requirements sufficient to remain in the school.

For parents who are divorced, paying child support and unable to get the requisite information from their child, this is good news – and probably a long overdue decision from the court.  Child support is intended to assist the custodial parent in housing, feeding and clothing a child until his or her “emancipation.”  When  a child is no longer in school full-time, the court (and often the parties’ Marital Settlement Agreement as well) define that child as “unemancipated.”  At that point, the legal obligation to support a child terminates and any support is entirely voluntary on the part of the parent.  In many states, such as Pennsylvania, emancipation occurs upon a child’s graduation from high school.  In NJ, emancipation does not occur until a child has completed an undergraduate college degree, so long as the child is diligently pursuing that degree on a full-time basis. 

It stands to reason that a child who is relying on his or her parents for support should keep them informed of their educational status.  Good communication between the parents will foster good communication between the child and both parents.  Divorced parents who resolved issues through mediation or Collaborative law recognize the importance of working together as co-parents. Unfortunately, parents who went to war with each other, neeed the court to teach this lesson to their children.

For more information on Mediation and Collaborative Law, contact Risa A. Kleiner, Esq. at 609.951.2222 or risa@rkleinerlaw.com

April 26, 2011

Following up on the previous blog entitled “Divorce – What Does it Cost?” here are some suggestions to keep the cost of a divorce down.

• Avoid Unrealistic Expectations.  After a divorce, everyone is poorer.  That’s because all the assets have to be divided and the incomes that supported one household now have to support two.  While you will gain control over your finances in a divorce, it is almost a certainty that you will have less money to control.  Be prepared and avoid a costly battle over issues you are unlikely to win. 

• Choose Your Battles.  You can’t hit a home run on every issue.  Get good advice from an experienced Matrimonial attorney and pursue the issues that are most important to you and on which you have the strongest position.  

• Be Willing to Compromise.  Compromise is not a sign of weakness; it is a recognition that  every settlement requires both parties to be flexible on their positions.  Spending all of your resources to “win” a particular issue is usually ill-advised.  Courts are likely to give each party some, but not all, of what they ask for.  Keep that in mind during settlement negotiations or mediation.

• Look toward the Future Instead of Re-Living the Past.   Divorce – whether mediated or litigated — cannot make up for what went wrong during the marriage. You’re getting a divorce because the marriage didn’t work.  Since you can’t change the past, it makes sense to focus on making the rest of your life better for you and your children.

•   Communicate, communicate, communicate.  Share your concerns with your attorney and listen to his or her advice.  Keep talking to your spouse — no matter how difficult.    You’ll need those communication skills in the future to continue to co-parent your children.  In the meantime, you’ll keep the cost of the divorce down if every issue doesn’t have to go through the attorneys. 

• Consider Mediation or Collaborative Divorce.   Avoiding litigation will also help keep costs down.  Both Mediation and Collaborative Divorce are forms of Alternate Dispute Resolution that avoid formal disovery procedures such as Depositions and costly court appearances.  Attorney time is more limited. Eperts are retained jointly, thereby avoidng duplication.  And, in the end, you as the client, have greater input into the final resolution of your case.

You can expect to pay your attorney a retainer from which hourly fees and disbursements will be deducted as they accrue.  You are entitled to clear and regular invoices with detailed explanations of what is being charged and what work is being done.  Review these invoices and discuss any concerns with your attorney promptly.  Keep the lines of communication with your attorney open, but take time to consolidate your questions and avoid multiple contacts over small issues since each and every contact will usually result in a charge. 

For more information on Mediation and Collaborative Divorce, contact Risa A. Kleiner, Esq. at 609.951.2222 or risa@rkleinerlaw.com

April 19, 2011

One of the first questions that a prospective client asks his or her matrimonial attorney is:  what will this divorce cost?  The answer is almost always, “it depends.”  So what are the factors that drive the cost of a divorce?

• Process:  Litigation is the most expensive way to get divorced.  It involves extensive attorney prep and court time, extensive preparation and review of documents. All or most of the communication between the parties is conducted through attorneys.  With the hourly clock running, this is costly.  Mediation is likely to be the least expensive process since the parties consult their attorneys on an as-needed basis and meet with the mediator on their own.  Collaborative Divorce is likely to fall somewhere in the middle.  Extensive prep and court time are avoided; discovery is more informal; but attorneys and other team members meet with the parties throughout the process.

• Complexity of the Issues:  Are there pre-marital assets? Is custody an issue?  Have there been issues of  domestic violence, invasion of privacy, abuse, dissipation of assets?  Is there an unique issue of law that may require a judicial determination?  Any or all of these and other legal issues can complicate the divorce and increase the cost.

• Emotional issues:  Even without complex legal issues, the emotional state of one or both parties can create obstacles to settlement which prolong the divorce and increase its cost.  Anger, resentment, feelings of betrayal, unstable personalities — these and other emotional responses can lead to a more expensive divorce.

• Use of Experts:  Some cases require experts and they can be costly.  Perhaps  a business valuation needs to be done by a qualified accountant; or one party is unemployed and an Employment expert is needed to determine their earning ability; or a home needs to be appraised and an appraiser must be hired; or a cash flow analysis is needed to determine actual income and lifestyle; or pensions need to be valued or divided by an actuary.  There can also be a need for psychologists who specialize in custody evaluations or a Parenting Coordinator to assist with parenting arrangements.  All of these issues may require the parties to retain experts.  In a litigated case, each party may have his or her own expert, while in Collaborative and mediated cases, the parties will retain joint experts.  Costs will  vary accordingly.

• Ability of the Parties to Communicate.  If all issues have to go through the attorneys, the divorce will ultimately be very expensive.  Phone and email time, correspondence between each party and their attorney and between the attorneys will be charged at the attorneys’ hourly rates.  Each issue will require multiple contacts.  Even a few phone calls or emails each week can quickly add up to hundreds of dollars. 

The cost of a divorce can range from a few thousand dollars in a very simple case where there are no children and most issues are resolved by agreement up to tens of thousands of dollars where every issue is fought to the bitter end in a trial.   A recent Forbes Magazine article posted on MSN Money Central places the “average” cost of a divorce between $15,000 and $30,000 and mediated divorces in the range of $5,000 to $10,000. Add to that the higher cost of living in New Jersey.   See http://articles.moneycentral.msn.com/CollegeandFamily/loveandmoney/10keystoatrulycheapdivorce

 For more information on mediation and Collaborative Divorce, contact Risa A. Kleiner, Esq. at 609.951.2222.

March 23, 2011

In New Jersey, the parties to a divorce are not permitted to cancel or alter their life insurance while the divorce is pending.  In fact, when a Complaint for Divorce is filed, the filing party (plaintiff) must certify that no changes have been made to their health, life, auto or home insurance coverage or beneficiaries during the preceding 90 days.  If any changes were made during that time, the plaintiff must explain them.  When the defendant files a responding pleading with the court, he or she must also certify as to the status of their insurance. coverage and must notify the court if any subsequent changes are made to the coverage while the divorce is pending.  This rule was established to avoid having one spouse remove the other from their insurance coverage (life, health, automobile or home) without their knowledge.    

Life Insurance is often used as security for alimony or child support following a divorce.  If a husband is obligated to pay spousal support after the divorce, but dies pre-maturely, the former wife will be left without the funds on which she relied to pay some or all of her expenses.  Life insurance proceeds are intended to cover the shortfall.  Similarly, with child support, life insurance proceeds fill the gap to provide child support and cover one parent’s share of college and other expenses that may occur after their death. 

Often, spouses/parents have life insurance through their employment rather than private coverage.  This can create a void if there is a loss or change of employment.  Therefore, parties are often expected to obtain private life insurance policies that will remain with them regardless of any change in their employment status. 

Divorcing parties need to understand the difference between the “owner” of a policy and the “beneficiary” of the policy.  The owner of a policy usually pays the premiums and receives all important updates and information on the policy and may make changes to the coverage and the beneficiary.  In a divorce, it is a good idea to provide that the beneficiary will receive updates on any changes to the policy and will have access to policy information directly through the insurance company to confirm that premiums are up to date, no loans have been taken against the value of the policy (if it has a savings component) and that the beneficiaries have not been altered.

Life insurance may also be held in an insurance trust.  In that case, the proceeds of the policy are deposited into the Trust upon the death of the insured.  The Trustee then disburses the proceeds as the Trust document directs.  It is helpful for the parties to a divorce to review their insurance policies and to consult both their attorneys and a life insurance specialist about these issues.

For further information about Mediation and Collaborative Divorce, contact Risa A. Kleiner, Esq. at 609.951.2222 or risa@rkleinerlaw.com

3.4.11

Collaborative divorce is an innovative team approach to divorce.  Its goal is to transition the family through a difficult life change with the least negative effects on the children and the family.  In collaborative divorce, both parties are represented by collaboratively-trained attorneys.  A team is formed with any joint experts (financial, custodial) that may be needed. Parties and their attorneys commit in writing that the issues will be resolved out of court or the parties will start over with new litigation counsel.

Discovery (exchange of documents) is handled informally in collaborative divorce.  There are no interrogatories, formal requests for documents or depositions.  Nonetheless, complete and full exchange of documents and information is required.  Parties must commit to an open and honest exchange of information.  Handling the exchange of information in a less formal manner saves time and money.

In a collaborative divorce, each party is encouraged to speak for him or herself.  Lawyers support and advocate for their clients but, unlike traditional litigation, they do not control the dialog.  The parties, with assistance from counsel, set the agenda and explain their concerns and interests in the team meetings.  The primary focus is on what is best for the children and the family while still meeting the financial and emotional needs of the parties.  Open communication is encouraged so that the parties can continue to work together in the best interest of the chidren after the divorce.

Collaborative divorce is less expensive and faster than a traditional litigated divorce.  There is no waiting for a judge to decide your case and you don’t have to worry that the court’s decision may be incompatible with your needs.  Collaborative divorce is confidential. It is also supportive.  Instead of increasing the stress, the process is intended to lower anxiety. Collaboratively-trained child specialists, forensic accountants and divorce coaches can all be included in the team where the parties agree that these professionals can be helpful.

For further information about Collaborative Divorce, see my website, www.rkleinerlaw.com or call my office at 609.951.2222.

January 31, 2011

Did you know that you can negotiate the dependency exemption for a child as part of a divorce agreement?  While Head of Household filing status can only be claimed by the parent who has custody of the child more than 50% of the time, the dependency exemptions for children can be allocated or alternated in a divorce.  For example, a couple with two children can agree that each of them will claim the dependency exemption for one child.  Or a couple with one child can alternate claiming the exemption.  The dependency exemption is $3,650 and the actual tax savings is the % of that amount which reflects your actual tax rate.  So, if you are paying taxes of 25% to the IRS, your benefit from claiming each dependency exemption is 25% of $3,650 or $912.50.

Children under 19 can be claimed as dependents.  Children over 19 and under 24 can also be claimed if they are full-time students and their income is less than $3,650 for the year.  There is also a child tax credit up to $1,000 for each child under 17 that applies for some lower income parents who claim the child as a dependent.  You should consult your tax preparer for more information on this credit.

For 2010, there is also an expanded tax credit for parents who adopt a child.  The maximum credit is now $13,170.  The credit is related to the reasonable and necessary expenses related to a legal adoption, including fees, court costs, attorney fees and travel expenses.  

Parents with lower incomes may also be eligible to claim the Earned Income Tax Credit.  The maximum family income cannot exceed $48,362 to claim this credit.

The American Opoportunity Credit can provide some relief from the cost of higher educaton.  An expanded version of the Hope credit, this credit is now a maximum of $2,500 for the cost of tuition and other higher education expenses.  Students must be enrolled at least half-time.  The credit is available for each student in a family.  This credit, like others, phases out for higher income families.  If the family doesn’t qualify for the Opportunity Credit, they may qualify for a newly enacted deduction of p to $4,000 for tuition and fees for higher education.  Again, consulting with your tax preparer will provide the answer for your specific situation.  Because Congress just passed this deduction in December, the IRS needs time to update its systems to accommodate it.  As a result, tax returns claiming this credit cannot be filed before February 15, 2011.

The above is intended as general information only.  Contact your tax professional to confirm the credits that apply to your individual situation.  For more information on mediation and collaborative divorce, contact Risa A. Kleiner,Esq. at risa@rkleinerlaw.com or by calling 609.951.2222.

December 9, 2010

A recent article in the NY Times discussed the rise of companies who provide loans to cover counsel fees in a divorce.  In return, the company takes a percentage of the settlement.  In one example, the firm loaned a divorcing wife $200,000 to “bankroll” her case. 

While not every litigated case costs upward of $200,000 in legal fees for one spouse, the sum is not unheard of.  In a hotly contested case involving high-priced attorneys and numerous court appearances, fees can explode, often to the astonishment of the parties.  It costs money to fight over the issues, regardless of how limited the marital finances may be.  Litigants often fail to heed the warning about weighing the cost-benefit of litigating.  They are just plain angry at their spouse and they want “justice.”

Unfortunately, the adversarial process is not only expensive, it has no guarantee of success.  What is guaranteed is that spouses will be unable to communicate after the divorce and their children will often suffer as a result. 

Mediation and Collaborative Divorce allow the parties the opportunity to discuss their needs in a confidential and peaceful environment.  Both mediation and collaborative divorce are designed to keep the lines of communication open and, as a result, to protect the children and keep divorce costs down.  Instead of squandering marital assets on divorce costs, the parties and their children are better served if they can preserve assets for college and retirement.  Alternate Dispute Resolution (ADR) processes such as mediation and Collaborative Divorce promote these goals.

For more information about mediation and collaborative divorce, contact our office at 609.951.2222 or by email at risa@rkleinerlaw.com.

November 16, 2010

I was recently reading an article about trial stategy.  The attorney’s advice included suggesting ways of causing “distress” and “surprise” to the adverse party.  Words such as “tremendous stress and anxiety” were used to describe the intended affect of preparing a case well.  “Jolting the opposition” was cited as a goal to “jumpstart settlement negotiations” with the “hostile party.”  Causing “shock” to the client’s spouse was also promoted as being part of the strategy.

And to think these parties once fell in love and tried to build a future together.  And that they still may have children to raise after their divorce.  After they’ve been “shocked” and “jolted” and put under “tremendous stress and anxiety” by their former husband or wife’s attorney.  What a lovely way to start a future as co-parents.

Reading this article reminded me of why I left litigation behind and chose to guide my clients to the future through mediation and collaborative divorce.   Divorce was never meant as a punishment.  It was intended to give parties a fresh start – and hopefully, with their dignity and some financial resources remaining.  Mediation and Collaborative Law permit attorneys and mediators to put down their swords and put on their problem-solving hats.  These alternate processes allow clients to use their energy to split up their assets and transition to separate lives — and hopefully, to do so in a less stressful way. 

Putting your spouse through the wringer of a trial is guaranteed to put you through a wringer too.  And to drain your emotional and financial resources along the way.  Divorce is not a war.  It is a life-transition.  And you can choose the way you make that transition and what your future will look like when it’s done.

For further information on mediation and collaborative divorce, contact Risa A. Kleiner, Esq. at 609.951.2222 or risa@rkleinerlaw.com.

November 10, 2010

Mediation is a cost-effective process for resolving divorces.  The mediator serves as a neutral faciliator.  While the mediator may be an attorney, he or she does not provide legal advice to either party.  Instead, the mediator encourages the parties to express their concerns, goals and issues. Often, the mediator will suggest options and alternatives for settlement, but the parties must decide for themselves what solutions will work for them.

In order to be better prepared to identify optimum solutions and understand your legal rights, you as a participant in mediation are encouraged to consult with an attorney.  Your lawyer’s role will be limited to providing you with advice outside of the mediation sessions and later, with filing a Complaint for Divorce and finalizing the divorce.

Not every mediation client consults an attorney and you are not obligated to do so.  However, before you reach a final resolution of custody, property and support issues, it is wise to know what the likely or possible outcome would be if you had the issues decided by a court.  That knowledge helps you understand the alternatives if mediation breaks down.  It also helps you know how likely you are to prevail on certain issues.

Clients who have at least one consultation with a mediation-friendly attorney are usually more satisfied with the outcome of their divorce.  They understand the divorce process better and can see how mediation can assist them in reaching their goals.  It is important to select an attorney who is familiar with and supportive of the client-directed mediation process.  If the attorney is inclined to litigate divorce cases, he or she may be less open to the individualized solutions that mediation clients often create for themselves with the help of a mediator.

For more information or to set up a mediation session or consultation, contact Risa A. Kleiner, Esq. via email at risa@rkleinerlaw.com or by phone at 609.951.2222.