Risa A. Kleiner, Esq.

April 23, 2013

The case: Husband died in 2008, leaving a life insurance policy purchased in 1996 with his former wife still listed as beneficiary.  Although Husband and ex divorced in 1998 and Husband remarried in 2002, he never  changed the beneficiary of his policy.  Current wife sued in Virginia where State law automatically revokes a divorced spouse as a life insurance beneficiary in favor of the widow or widower.  Lower court awarded the insurance proceeds to the widow, but the Virginia Supreme court reversed.  The policy had been obtained through a federal insurance program and the court held that federal law, not state law governs.  Benefits therefore reverted to the original beneficiary – - the ex-wife.

Status: This case is now on appeal to the US Supreme Court.  Widow is arguing that the State, not the federal government, should govern domestic relations issues.  Arguments will be held before the court on April 29, 2013.  Look for a decision in the months to come.

Moral:  NJ has no law automatically revoking the former spouse as a beneficiary of life insurance or any other accounts.  And the moral of the story is clear.  Beneficiaries on life insurance policies, financial and retirement accounts should always be updated after a divorce.  And a new Will should be drafted.  The entry of a divorce should be the catalyst to update your financial life and documents.   Otherwise, the intended beneficiary may not receive the funds as intended.

For more information about divorce or to set up a consultation, please contact Risa A. Kleiner, Esq. at 609.951.2222.

August 17, 2012

There are many reasons why mediation is a great option for resolving divorce issues.  Here are a few:

1. Mediation allows you to design a customized settlement that works for you and your family.

2. Mediation is confidential.  All discussions take place in the mediator’s office and the mediator can never be called to testify about those discussions.

3. Mediation promotes communication.  Talking through divorce issues provides a model for working out issues that may arise after the divorce.

4.  Mediation is faster than litigation.  The couple sets the schedule and often cases are finished in just a few months.

5.  Mediation is cost effective.  With no court apperances, no formal discovery and no waiting for court schedules, clients save on their counsel fees.

6.  Mediation is guided by a trained mediator — a neutral professional who helps clients by suggesting options, alternatives and solutions.

7.  Mediation is voluntary.  If, for any reason, the process doesn’t work for you, you can opt out at any time.

8.  Mediation encourages both parties to get independent legal advice which helps them negotiate their agreement.

9.  Mediation is convenient.  Sessions are scheduled with the mediator on your time schedule.

10. Mediation is less stressful.  With reduced cost and time, a calmer atmosphere and assistance from a trained mediator, stress is significantly reduced.

To obtain more information or to schedule a mediation session, contact Risa A. Kleiner at her Princeton office at 609.951.2222 or by email at Risa@rkleinerlaw.com.

July 26, 2012

Seventy-five percent of Americans close to retirement age in 2010 had less than $30,000 in retirement accounts. According to a New York Times Op-Ed piece from July 22, 2012, if you want to maintain your lifestyle after retirement, you will need 20 times the amount of your annual income in addition to your Social Security Income. These figures do not take into account extraordinary healthcare costs or unforeseen financial catastrophes.  And they assume you will only live for 20 years after retirement!

Those who divorce are often in even more dire financial straits.  The funds they thought they would have to live on in retirement are severely depleted due to the cost of the divorce itself and the fact that assets are divided between the parties in a divorce.  Often, those over the normal retirement age must continue to work to supplement their savings.  But not everyone has the ability or employment opportunities necessary to create a meaningful income stream after 65. 

Late-life divorces are becoming more common.  And the financial impact of a divorce can be devastating since there is less time to make up for depleted assets.  If a divorce is unavoidable, you need to do everything possible to minimize its costs – both during and after the process.  That includes doing your utmost to avoid litigation where the costs are high and the outcome uncertain. 

By using mediation or a Collaborative Divorce process, you have an opportunity to resolve financial issues  for the benefit of both parties and at a lower cost.  By selecting neutral experts, you can avoid paying tens of thousands of dollars for competing opinions and extended testimony.  By choosing an out-of-court process, you avoid long delays and the enormous cost of formal discovery.  You can benefit from your attorney’s legal advice without having to bear the burdensome cost of court time.  

Your goal is to be part of the 52% of Americans who say they will be comfortable in their retirement.  Your goal is not to deplete your retirement funds in a divorce.

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

June 15, 2012

According to a recent article in the AARP Bulletin, while overall divorce rates have decreased, the divorce rate for those over 50 has doubled since 1990.  Even more startling is the fact that 60% of remarriages fail for those over 50.

“Gray divorce” as it’s come to be known means that one of three baby-boomers will be single as they age.  A psychologist at the Fmaily Institute at Northwestern University calls late-life divorce an “epidemic.”  The consequences can be devastating .  Divorcing later in life makes it difficult to recoup the financial impact.  And many wives who have a limited work and earnings history will need to rely on only half of their spouse’s social security income.

On average, 20% of widowed, divorced or never married women experience a high rate of poverty in their retirement years.  Older men do better financially, but not as well socially.  They often have difficulty recreating the social networks they enjoyed while married. 

If you are divorced after a marriage of at least 10 years, you are permitted to claim social security based on your spouse’s wages if you are not entitled to a higher benefit based on your own work.  You can start taking social security at age 62 at a reduced rate, even if your former spouse waits until full retirement age.  There is no impact on the social security benefits of the higher earning spouse if the divorced spouse claims these benefits. 

While there is no one solution to these problems, careful financial planing in a late-life divorce, along with a concern for the future welfare for both spouses, can lessen the financial hardship.  Instead of draining joint resources with a costly litigated divorce, couples over 50 would do well to consider Alternate Dispute Resolution — either mediation or Collaborative Divorce.  Both less costly and less emotionally draining than litigation, mediation and collaborative divorce take both parties’ needs into consideration.   

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

August 15, 2012

For divorcing couples who may not be able to afford the hourly rate of many mediators, the New Jersey Association of Professional Mediators (NJAPM) is offering divorce mediation at a reduced cost.  The program pairs a qualified couple with an Accredited Professional Mediator and an apprentice.  For $150 per hour, about half the usual cost, couples can have their divorce issues mediated.  At the conclusion of the process the couple will have a written Memorandum of Understanding which summarizes the agreement they have reached. 

To qualify for this program, a couple must have a combined annual gross income of less than $120,000 and no history of domestic violence.  Most mediations take between 2 and 5 sessions and cost far less than a litigated divorce.  Issues of custody, parenting time, division of property and support are addressed by the mediator.  Sessions are held in the mediator’s office and are completely confidential.

Applications may be found at www.njapm.org.  Look for the box on the right side of the Home Page that says “Divorce Clinic.”  Or you may call NJAPM at (800) 981-4800 for further information.

November 8, 2011

I recenty heard Dan Ariely, a behavioral economist, speak on the way people make decisions.  Based on his extensive research, it turns out that people only think they are in control of making their own decisions. In truth, the decisions we make are heavily influenced by the environment in which the decision is made. 

So, for example, when asked to “opt into” a 401k plan, most people are apt to stay out.  But, if the choice is to “opt out” of that 401k, they stay in.  Inertia, perhaps.  Or maybe we just assume that the default choice has been selected by someone who knows that it’s really the better choice.  And if there are too many choices, we are likely to make no choice at all.

The irrationality of decision making.  According to Ariely, the irrational way people make decisions is actually quite predictable.  Rome or Paris?  Hard to decide.  Rome without coffee v. Paris  The majority had no trouble choosing Paris.  Was it just about the coffee?  Ariely says that having bad options leads us inevitably to choose another option without really considering the significant merits of the choices.

So what’s the relationship between Ariely’s research and divorce?  He concludes that we should not assume we each make good decisions – especially when we are under an emotional strain, as in a divorce situation.  Ariely says we should develop a healthy skepticism about our own instincts and seek out advice from trained professionals such as attorneys and financial professionals.  And for the professionals who help shape the choices people make — well, creating the right list of options can influence the outcome.

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

July 18, 2011

New York recently became one of the few states to adopt a formula for pendente lite alimony awards.  That is, for alimony to be paid while the divorce is pending in court.  According to a recent New York Times article entitled “Ending the Alimony Guessing Game”, the IRS confirms that former spouses pay about $9 billion each year in alimony.  As anyone who has appeared in family court knows, the awards vary dramatically from county to county and judge to judge.  Should NJ adopt alimony guidelines to make the awards more uniform?

As stated in a prior blog, NJ courts apply a list of factors  to determine what, if any, alimony the higher earning spouse should pay.  How those factors are applied depends on who is doing the calculation.  The above-mentioned NY Times article noted that awards are so vastly different that, when asked how much alimony a lifelong homemaker married to a doctor deserved, judges in an Ohio survey estimated as little as $5,000 per year and as much as $175,000. 

The unpredictability of alimony awards makes negotiation difficult.  The NY Times writer asserts that New York’s law minimizes the cost of litigation by establishing a mathematical formula to calculate temporary alimony.  The formula may be adjusted by each individual judge under special circumstances.  The formula subtracts 20% of the lower-earning spouse’s income from 30% of the higher earning spouse’s income — so long as the lower earner doesn’t wind up with more than 40% of the combined income.  Under this formula, if the incomes were $150,000 and $50,000, the alimony award would be $35,000 — leaving the gross incomes at $115,000 and $85,000 respectively.  Note that taxes are not considered in this calculation.

The ease of this calculation is attractive and would certainly make mediators’ work easier.  The NY Guidelines are intended only for temporary alimony.  But, “temporary” often morphs into “permanent” just by default.  So, the question is whether simplifying the alimony calculation would overlook the many issues:  health, age, length of marriage, earning capacity, for example, that judges in NJ are required to consider.  And “Guidelines” often become rules which judges are reluctant to deviate from and which parties adhere to with strict allegiance. 

In mediation and Collaborative divorce, the parties can adjust the alimony award, if any, to their individual needs.  And, in the end, this should be the goal — allowing both parties to move forward in their lives.

For more information about divorce issues, contact Risa A. Kleiner, Esq. at 609.951.2222 or risa@rkleinerlaw.com

July 8, 2011

New Jersey has an alimony statute that lists 12 factors for the court to consider in awarding alimony in a divorce.  In addition, NJ case law requires that the court consider the marital lifestyle, the dependent spouse’s ability to contribute to his or her own support and the ability of the supporting spouse to pay any shortfall.  Unlike in some other states, there is no formula or guidelines for alimony in NJ, as there is with child support.  The statutory factors can be reviewed at N.J.S.A.2A:34-23(b).

There are four types of alimony in NJ.  First, the court must consider whether Permanent Alimony is warranted.  This usually occurs if the marriage is 15 years or longer and if there is a significant disparity in the parties’ incomes.  But other factors, including the age and health of the parties, the marital standard of living and parental responsibilities for children, also are taken into consideration. 

A second type of alimony is Limited Duration Alimony.  LDA, as it is called, is for a specified period of type and is usually awarded in shorter marriages where permanent alimony is not warranted.

A third type of alimony is Rehabilitative alimony.  This support is awarded to assist a dependent spouse who has a specific plan for improving or increasing their educational or job skills.  It is usually for a few years and may be in addition to other forms of alimony. 

Fourth, there is Reimbursement alimony.  Awarded less often, this type of alimony is intended to compensate a spouse who supported the other party while they were in school or receiving advanced training. 

In a litigated case where alimony is an issue, the parties will testify as to their marital lifestyle and provide documentation to prove income and expenses.  The court will attempt to provide a “reasonably comparable” standard of living for each party after the divorce, although this may not be possible where two households must be supported on the income that previously supported only one.  In mediated or collaborative cases, the parties, with assistance from counsel, try to work out a fair amount of support so that both parents can provide nearly equivalent lifestyles for their children after the divorce.

Although it may feel unfair to some parties that, despite their divorce, they still have to contribute to the income of the other spouse, the State views this as an ongoing obligation.  In fact, it is a way to avoid having a divorced spouse become a public charge because they are left with insufficient funds on which to live.

For more information on alimony and other divorce issues, contact Risa A. Kleiner, Esq. at 609.951.2222 or risa@rkleinerlaw.com

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