Strich Law Firm, P.C.

Many divorce settlements center around the alimony provisions.  Alimony provides a spouse with the means to keep their quality-of-life post-divorce. There are multiple factors that determine the amount and length of alimony. However, these agreements are not set in stone. Under New Jersey law, alimony can be modified or even terminated if there are significant circumstances that affect the financial situation of either party.

The case of J.D. v. C.D. emphasizes important elements Judges consider when assessing requests for alimony adjustments. In this case, the payor, C. D., was discharged from his high paying job ($750,000 per annum) and had a hard time trying to find comparable employment. He argued that his financial situation had drastically changed, and sought to terminate his permanent alimony obligation. After reviewing the details, the court agreed, considering the loss of his high paying job and the consequent financial impact, which changed the conditions compared to when the alimony was created.

This brings up the question, when can alimony be modified or terminated? One situation in which alimony can be modified or terminated is when the payor loses his/her job and their new salary is drastically different. This is seen in J.D. v. C.D. where the payor lost his high paying job and alimony was terminated. The payor must demonstrate that he made reasonable efforts to find comparable employment. In J. D. v. C.D., reasonable efforts were made by the payor after he was discharged. He was able to generate an income of around $130,000 by teaching finance courses at colleges and revenues from books he authored. While doing this, he used the help of a re-employment expert to find comparable employment. C.D. made over a thousand phone calls to banks and other financial institutions in search of a job. This helped the court understand his efforts and led to the termination of alimony.

In addition, the wife’s situation changed from a low wage situation of about $30,000 to a nurse position of about $100,000.

Before getting married, many couples consider getting a prenuptial agreement (“prenup”) with their partner to protect assets that they owned before the marriage in the event of a divorce. If you and your partner are asking the question: Should my spouse and I get a prenuptial agreement before getting married? Well, the answer is, it depends. A prenup is an effective way to fairly split assets that appreciated in value during the marriage and in protecting someone’s assets that were acquired before the marriage in the event of a divorce. A prenup is especially important for individuals with businesses that were started before the marriage or for individuals with a large number of financial assets. Prenuptial agreements, however, are not necessary for everyone. If you and your partner don’t own any business or don’t have a large amount of assets, a prenup can be a complicated and expensive process that isn’t necessary for you or your partner.

               Prenuptial agreements can be accomplished in two main ways, through mediation or through negotiation between two lawyers. In my opinion, the mediation of a prenup is the superior option for a number of reasons. One of the biggest ones is that it encourages honest financial understandings and open dialogue between two partners. A mediator does not take sides and instead has both of the individuals' interests in mind. Mediation seeks to come to a favorable solution for both individuals and is a less adversarial process as opposed to negotiation.          

Many baby boomers had the traditional arrangement of one of the parties staying at home and managing it, mostly with primary parenting responsibility.  If this is your situation, there are some protections for you in the divorce process in New Jersey, including:

1.      Consideration for your reduced ability to earn income, given your time out of the workforce; and

2.      Alimony or spousal support is commonly appropriate; and

3.      You will get about one-half of all of the assets and liabilities obtained during the marriage.

If you have a disabled child that requires ongoing care, it may be appropriate for you to continue to stay at home providing such care.  Alimony/spousal support would be provided without requiring you to work outside the home.

However, in most cases, the stay at home spouse/parent will be required to go to work full-time. Since there is no slavery in United States, no one will hold a gun to the stay at home spouse to force them to work. Instead, there will be a determination or agreement as to what is reasonable for the at home spouse to be able to work, given education, skills, age, experience and time out of the work force. This theoretical income is called imputed income (income not earned but assumed) and it will be used in determining spousal support/alimony and child support.

It is my advice to a young person considering staying at home to reconsider such a decision and at least maintain a part-time presence in the workforce.  As a practical matter, it is my experience that it is almost impossible to make up for lost work time in a career and earnings.

In some states, a value is assigned to the contribution of a homemaker.  This is not the case in New Jersey.  However, life insurance is required for both parents and the amount of life insurance is partially determined by how much insurance is needed to replace each parent.

Each situation is multi-faceted and unique.  A consultation with a seasoned family lawyer can help you understand your individual situation and how to best position yourself in a divorce.

Call us at 609-924-2900 if you have a possible case or visit our web site at www.strichlaw.com.

The Secure Act of 2019: Setting Every Community Up for Retirement Act

More than 45% of Americans over the age of 55 have no retirement savings or pensions!!! If you have to rely on social security, you will be living in poverty.

 The SECURE Act passed in the House (federal) with a 417-3 winning vote. The Senate’s bill (RESA) has not had much movement. SECURE is not a law yet.

 SOME POSITIVES (DEPENDING ON YOUR INDIVIDUAL SITUATION):

The Act changes the maximum age for IRA contributions from 71 ½ to 72 years old. Currently, everyone who reaches the age of 70 ½ must take a certain percentage of their retirement assets as income (Required Minimum Distribution or RMD) and pay tax on this income.  Under SECURE, your fund will continue to grow tax-free longer, with 72 years as the new RMD age.

The Act will require employers to permit long-term (2 years or more) part-time employees to be able to participate in 401(k) plans.  Currently, employers are allowed to exclude part-time employees from their 401(k) plans.

 Small businesses would be able to join together and create group plans

 Parents will be able to withdraw up to $5000 from retirement accounts penalty-free within a year of a child's birth or adoption for qualified expenses, and they will be able to withdraw up to $10,000 from 529 plans to repay student loans.

Would allow employer-sponsored 401(k) plans to add annuities as investment options on the menu

SOME NEGATIVES

 The Act appears to provide that any inherited retirement money, even non-taxable (Roth retirement monies), will be taxed as income to the beneficiary (except spouses and children).

Your children will not be able to stretch the period for RMDs to their estimated lifetime. The stretch IRA will be gone! Your children’s inheritance of retirement monies will be worth less because of the taxes due under the proposed SECURE Act.

Call us at 609-924-2900 if you want an appointment to discuss this or estate planning as relevant to your situation or visit our web site at www.strichlaw.com.

Governing the practice of law in New Jersey is a set of Rules of Professional Conduct. In June, three committees of the New Jersey Supreme Court joined in issuing an opinion that a legal service called Avvo has been violating these ethical rules. Avvo Legal Services is an online client-matching service that pairs clients seeking legal assistance with lawyers in their geographical region and desired area of practice. Lawyers are rated on Avvo on a scale of 1-10 based on client and peer reviews. If the client is matched with an attorney, the client pays $39 for a 15 minute consultation. The attorney gets that $39 in their account and $10 is subtracted from that amount by Avvo for marketing services.

Under the Rules, lawyers are permitted to pay for advertising and marketing services so long as the advertisements are not false, misleading or deceptive. They are not, however, allowed to pay non-lawyers for “recommendations.” The New Jersey opinion asserts that Avvo creates implicit recommendations of the lawyers through their rating system and “satisfaction guarantee” for their service. By matching clients to the “right” lawyer based on the substance of their issue and the lawyer’s own experience, Avvo implies an endorsement of the lawyer’s qualifications. For these reasons, the New Jersey ethics committees believe that the “marketing fee” Avvo charges its lawyers is an impermissible referral fee.

Many other states have already issued similar opinions deeming Avvo’s practice to be unethical, including Ohio, South Carolina, and Pennsylvania. Quick to follow New Jersey’s lead was New York, with the State Bar Association issuing an opinion in agreement that Avvo’s practice violated the Rules, though their reasoning was somewhat different. However, North Carolina Bar was more favorable to Avvo’s practices and has proposed an amendment to their rules to accommodate the Avvo program.

The New York State Bar Association made a point of describing how legal services such as Avvo could operate within the boundaries of ethical rules. They state that as long as the service selects lawyers in a transparent and unbiased method, does not explicitly or implicitly recommend any lawyer, and complies with advertising restrictions, they may operate without legal or ethical issue. It seems legal services such as Avvo may need to reform as states crack down on enforcing ethical rules.

Comments: Avvo reacted to the opinions of the New York and New Jersey committees by claiming that the committees focused too heavily on the “marketing fees”, rather than ensuring that lawyers and the public are given the protection they are due under the First Amendment. The chief legal officer of Avvo, Josh King, believes that the ethics committees applied the standards too “narrowly.” The Bar associations that are finding Avvo’s practice unethical are focusing on misleading consumers, whereas Avvo is relying on First Amendment rights.

The North Carolina amendment that is referenced above would address Rule 5.4 regarding the Professional Independence of a Lawyer. The amendment would create an exception to the fee-splitting prohibition in the Rule and states the following: 6) a lawyer or law firm may pay a portion of the legal fee to a credit card processor, group advertising provider or online platform for identifying and hiring a lawyer if the amount paid is a reasonable charge for the payment processing or for administrative or marketing services, and there is no interference with the lawyer’s independence of professional judgement or with the client-lawyer relationship.

Call us at 609-924-2900 if you have a possible case or visit our web site at www.strichlaw.com.

Courts consider a wide array of factors in awarding alimony and equitably distributing the assets of parties in divorce cases. Often, a question arises about whether an asset should be used to determine alimony or whether it should be subject to equitable distribution—or both. Awarding a portion of an asset from the same source in alimony and in equitable distribution is referred to as “double dipping”.  Interestingly, New Jersey law prevents double dipping only when the issue concerns pension or retirement benefits.

The rule preventing “double dipping” originated in the 1982 case of D’Oro v. D’Oro. In this case, the court ruled that a pension cannot be counted as “income” for the purposes of determining alimony if it has already been considered under equitable distribution. The court upheld this rule in the landmark case of Brown v. Brown in 1990. Here, the ex-wife of a retired naval officer claimed to be entitled to an equitable distribution of her ex-husband’s retirement pension. The Mississippi Supreme court rejected the plaintiff’s claim on the grounds that the distribution of such an asset constituted “double dipping”. The court agreed with the logic of D’Oro v. D’Oro, stating that it would be inequitable for the pension to be counted both as a share of equitable distribution and as a cash flow determination for alimony.  

The case of Steneken v. Steneken in 2004 raised the issue of whether “double dipping” applied to the distribution of business-related assets. The defendant had appealed a court decision that gave his ex-wife both a share of his business and a monthly alimony based on his salary from the same business. However, the court argued that the present value of a business, based on its past earning, can be considered entirely separate from the earnings it would provide a shareholder in the future. In other words, a business can be both an asset for equitable distribution and a source of income used to determine alimony. The precedent allowing double dipping to occur in non-pension or retirement benefit cases continues to be upheld by New Jersey courts today.

Comments: Numerous courts around the country have since expanded the “double dipping” rule to protect business-related assets from being distributed twice. However, New Jersey courts continue to uphold that the “double dipping” rule applies only to pensions and retirement benefits. Whether or not this statute is unfair to business owners is widely disputed.

Call us at 609-924-2900 if you have a possible case or visit our web site at www.strichlaw.com.

A new standard for workplace harassment was established in a recent decision by the US Court of Appeals for the Third Circuit. The plaintiffs in Castleberry v. STI Group, two African employees of staffing agency STI Group, claimed that their supervisor threatened to fire them if they “[N-word]-rigged” the job of clearing a fence. The employees reported this comment and were terminated two weeks later without explanation. Claiming harassment, discrimination and retaliation, the two workers filed suit against their employer. The case reached the Third Circuit after a trial judge in Pennsylvania’s Middle District dismissed the plaintiffs’ claims of harassment.

At the onset of this case, workers needed to show that their employer’s behavior was “severe and pervasive” to be considered harassment. In other words, treatment had to be both seriously offensive and repeated to constitute a viable harassment claim. However, the Third Circuit judge in Castleberry v. STI Group believed that this standard was vague and inconsistent. He clarified that the correct standard to determine workplace harassment was that treatment had to be “severe or pervasive”. This meant that behavior did not have to be both serious and repeated to be harassment, but could rather be viable if one or the other created a hostile work environment.

The Third Circuit judge in Castleberry v. STI Group ruled that the supervisor’s use of the N-word together with a threat of termination made his behavior “severe”. The application of this new standard reversed the trial court’s decision and allowed the plaintiffs’ claim to stand as harassment.  Thanks to this new standard, employers will likely face a greater responsibility to act respectfully in the workplace and employees can expect wider protection from offensive treatment.  

Comments: Clarification of the harassment standard in this case is very useful to both employers and employees.  The new standard is more logical:  I agree that threat of termination and subsequent termination after complaining of harassing or discriminatory language is severe and should be considered harassment and/or discrimination.  I believe that this will be a landmark decision in employment law.

Call us at 609-924-2900 if you have a possible case or visit our web site at www.strichlaw.com.

A recent case in New Jersey, Ricci v. Ricci, raised a number of questions about the duty of divorced parents in supporting their child’s education. The parents of the child, Caitlyn, had been divorced since she was 4 years old. She lived with her parents throughout high school and enrolled part-time in a community college after graduation. However, upon having issues with her parents, she left her mother’s home at the age of 19 to live with her grandmother. Her parents agreed that she was emancipated and sought to end their child support responsibilities.

Caitlyn legally objected to these efforts and compelled her parents to pay for the cost of her community college education. Though a judge initially approved her intervention and required her parents to pay, Caitlyn then committed to attending a four-year out of state university and sought to make her parents to pay for the cost of this tuition as well. The issue became whether Caitlyn’s parents could be held responsible for paying these costs.

The first consideration in Ricci v. Ricci is whether Caitlyn was legally emancipated upon moving out of her mother’s house. Generally, child support automatically terminates when the child turns 19. However, children can be emancipated before this age upon request by the parents. A child can also request for their support to be extended past the age of 19 if they are enrolled in a higher education program.

If Caitlyn was found to be unemancipated, the second issue was then whether her parents could be held responsible for the cost of her education. The court takes two factors into account in determining whether parents should be held responsible. First, they consider whether it is equitable for the parents to pay the costs. Second, they consider whether the parents have the means to contribute financially.

The court examined the details within this case closely and determined that the facts surrounding Caitlyn’s potential status of emancipation were too contradictory, and remanded the case (sent the case back to the trial judge for a hearing on the facts). If the trial court decides that Caitlyn was unemancipated, it will then consider whether the parents have an obligation to pay. This complex case establishes the principle that parents must be involved with their child’s education decisions to a certain extent in order to be held responsible for their costs and that a child must be unemancipated before parents have an obligation for advanced/technical education.

Comments: New Jersey is one of only a few states that holds parents responsible for advanced/technical education, potentially up through graduate school. The responsibility is, however, limited by whether the child meets emancipation criteria, whether the child and parent/parents are estranged, and if so, whose fault it is, the involvement in the choice of college, the ability to pay for college or technical school related cost, the parents’ education, the child’s ability and other factors (see Newburgh v Newburgh).  Here, the Court makes it clear that the emancipation or lack thereof of the child must be determined before there is any obligation or the degree of obligation by the parents for advanced education.

Call us at 609-924-2900 if you have a possible case or visit our web site at www.strichlaw.com.

A recent decision in a New Jersey court affirmed the privacy rights of individuals diagnosed with HIV/AIDS in the case of Smith v. Datla. The New Jersey law addressing the privacy of individuals diagnosed with HIV/AIDS is called the AIDS Assistance Act. First implemented in 1984 to address the spread of AIDS, this Act requires that all diagnosed cases of HIV/AIDS and information regarding diagnosed individuals be reported to the Department of Health. In addition, the law states that any information about the individual and their diagnosis is confidential and can only be released for purposes defined by the Act. The confidential information can be obtained if prior written consent exists or can be accessed by individual’s executor, spouse, or primary caretaker only if the individual is legally incompetent or deceased. But for this latter provision, the executor, spouse or primary caregiver could not get medical information without permission from the court as part of a guardianship order.

The AIDS Assistance Act also allows individuals against whom this Act is violated to seek actual damages, equitable relief, reasonable attorney’s fees and court costs, and punitive damages if the violation shows wanton recklessness or intentionally malicious conduct.

In Smith v. Datla, the plaintiff, Smith, was under the medical care of Dr. Datla for kidney failure. During a consultation, Datla disclosed the information that Smith was HIV positive to an unidentified third party who was also in the room without prior consent. The plaintiff brought suit against Datla for invasion of privacy by public disclosure of private facts, medical malpractice, and violation of the AIDS Assistance Act. The plaintiff argued that his claims of personal injury should be subject a two-year statute of limitations. Statute of limitations are laws that place a maximum amount of time after an event occurs in which legal proceedings must be initiated. The defendant argued that the plaintiff’s claims fell instead under the realm of defamation and should be subject to a one-year statute of limitations.  However, the defamation cause of action requires that the publicized information be false; it was true here.

The court sided with the plaintiff in ruling that the defendant’s disclosure of the plaintiff’s HIV-positive status constituted an invasion of privacy, medical malpractice, and a violation of the AIDs Act, and agreed that the two-year statute of limitations applied. The precedent established by this case should allow more individuals to seek protection under this act and ensure that their rights to privacy are protected.

Comments: Strich Law Firm PC will initiate actions for defamation, violation of privacy and violation of the AIDS Assistance Act.  If you, a family member or a friend need legal assistance in these areas, please call Strich Law Firm PC at 609-924-2900 or email us at [email protected]. But for the AIDS Assistance Act, families of patients with AIDS would be limited in getting medical information without the applicable Power of Attorney or Guardianship. Also, the AIDS Assistance Act has “teeth” in it for enforcement.

Call us at 609-924-2900 if you have a possible case or visit our web site at www.strichlaw.com.

Recent legislation has made the automatic termination of child support a reality in New Jersey. Effective on February 1st, 2017, this new law raises the age of effective emancipation for children receiving child support from 18 to 19. Automatic termination applies to all child support orders, including medical and financial obligations. The termination of child support occurs automatically when the child reaches the age of 19, unless the child dies, marries, joins the military, or a court order specifying a different age at which support will terminate exists. Individuals receiving child support through Probation will be notified of the upcoming termination.  

Child support can continue if a request for continued support is filed and approved by the court. Acceptable reasons for continued support include if the child is a full time high school student or enrolled in a full-time secondary education program; is a full-time college student or is pursuing a post-graduate education; or has a qualified mental or physical disability that existed before the age of 19. When requesting continued support, a new date for termination of child support must be proposed. This date must fall before the recipient’s 23rd birthday. If parents wish to continue aiding their child financially for items such as educational or medical expenses when the child is 23 or older, they may apply for another form of financial maintenance outside of the child support program.

If a previous Judgment of Divorce or child-support order exists that specifically provides for child support to continue past the age of 19, it may be used to override automatic termination. However, support will automatically end at the age of 23, even if the order specifies otherwise. Another basis to respond to automatic termination is if the child is receiving support in an out-of-home placement through the Division of Child Protection and Permanency after the age of 19. In this situation, child support will terminate when the child is no longer in his/her placement or when the child turns 23.     

Call us at 609-924-2900 if you have a possible case or visit our web site at www.strichlaw.com.

New Jersey law operates under standards of “equitable distribution” in determining how marital property is to be distributed in case of a divorce. The court takes a number of factors into account in determining what is a fair, equitable and just division of the assets and liabilities of the parties.  This differs from “community property” states, in which property is split 50/50 between the spouses.

Marital property includes everything that is acquired and legally owned during the course of a marriage, and consists of both assets and liabilities. It does not matter whose name or money was used in the acquisition of such property, though some exceptions do apply. Examples of marital assets and liabilities, as well as non-marital exceptions, are found below:

Marital Assets include:

Stocks, bonds, cash and savings accounts

Individual retirement accounts, pension plans, 401K's and other retirement funds

Cash value of life insurance policies

Real estate

Cars and other vehicles

Furniture and other house fixtures

Business(es) owned by one/both spouses

Marital Liabilities include:

The mortgage balance on your home

Debts owed to banks, savings and loan association, or any lending institutions

Car loans, school loans (if not premarital), home improvement loans, any money borrowed during the marriage and that has not yet been paid back in full 

Loans owed to relatives/friends

Unpaid bills at the time of the hearing (department stores, credit cards, doctors, etc.)

Non-marital exceptions include:

Anything acquired (or incurred) by either party prior to the marriage

Any gift or inheritance acquired during the marriage that is not from the other spouse

Income generated by non-marital assets during the marriage (excluding income used as a marital asset or in a joint account)

Any assets or liability specifically excluded from being determined as marital by a valid written agreement of the parties (such as an ante-nuptial/pre-nuptial agreement or a post-nuptial agreement)

Gifts between the spouses prior to the marriage, including engagement rings

Call us at 609-924-2900 if you have a possible case or visit our web site at www.strichlaw.com.

Many parents wish to remain involved in the medical and financial decisions of their children after they turn 18. However, once a child reaches the age of majority, he or she becomes a legal adult with new rights to control their private property and medical care. Parents are prevented from accessing their health care information and financial accounts unless they are given legal permission, and it can become very costly and time-consuming for them to help in times of need.  Normal children can provide permission with a properly drafted power of attorney to their parents.  While such a power of attorney is the best way to accomplish getting needed information and decision making power, a young adult may not want to grant such broad powers.

Parents of disabled children should file for guardianship to continue to manage their disabled child’s personal property and medical care after they turn 18. Disabled children with mental limitations cannot sign a power of attorney or health care proxy because they do not have capacity. While able-bodied children likely do not require this same level of care, there are a number of important steps they can take to ensure that they can receive parental help when needed.

The health records of a child become private under the Health Insurance Portability and Accountability Act (HIPAA) when the child turns 18. Information regarding their medical history, current conditions, and future health care cannot be accessed by a parent unless a HIPAA release form is signed.  The young adult can choose to sign the waiver on a case by case basis. This waiver gives a parent access to the child’s private medical information and must be signed by the child voluntarily. If a child is incapacitated before this form is signed, parents cannot easily receive information about their child’s medical state.  Even if the young adult has signed a HIPAA release, the parent cannot make medical decisions for the child without a health care proxy (a power of attorney limited to health care decisions) or a full power of attorney.  Becoming a health care proxy with a HIPAA release form allows parents to continue to support their children in times of emergency even if the child does not have the privacy to make medical arrangements.  

If a young adult is hesitant to grant a health care proxy or power of attorney, they can make it conditional on the young adult’s disability as defined by the state of their residence.  The difficulty with this option is that the parent’s will have to prove disability to the health provider’s satisfaction, though there are times when the disability is self-evident.

A child’s finances also become private when they turn 18. To give a parent access to their accounts, a child can grant them a durable power of attorney. A durable power of attorney allows an appointed individual access to the financial accounts of another when they are incapacitated or when other circumstances, such as traveling, prevent them from handling the accounts themselves. In the alternative, the parent can be listed on the young adult’s accounts as a joint account owner.

In the tragedy that a child predeceases his/her parents, their funds may be subject to probate and will likely be passed on to their heirs. A Will grants a child greater control over to whom their property is given and helps parents avoid making difficult decisions in times of grief. Parents should strongly consider how a health care proxy and/or durable power of attorney and Will can better prepare them to help their children after their child is over 18.

Call us at 609-924-2900 if you have a possible case or visit our web site at www.strichlaw.com.

Individuals with disabilities in New Jersey will soon have access to a new type of savings account through The Achieving a Better Life Experience (ABLE) Act. Signed into federal law by President Obama in 2014, the ABLE Act establishes an alternative to special needs trusts with unique provisions and limitations. To be eligible for an ABLE account, individuals must have a documented disability before the age of 26. Any individual, including friends and family, can contribute to an ABLE account. However, individual contributors are limited to annual sums of $14,000. Individuals with an ABLE account remain eligible for SSI benefits if the sum within their ABLE account does not exceed $100,000. The individual does continue to be eligible for Medicaid if the account exceeds this amount until the state’s permitted maximum amount for a 529 account is reached. In New Jersey, this limit is $305,000. Individuals are additionally restricted to establishing only a single ABLE account.

The funds within an ABLE account can be used towards a wide range of expenses related to the individual’s disability. These expenses include education, housing, transportation, employment training and support, assistive technology and personal support services, health, financial management and administrative services, legal fees, funeral and burial expenses, and other expenses.

The ABLE Act was signed into New Jersey state law on January 11th, 2016 by Governor Chris Christie. Although it was intended that the program would be up and running by the end of the year, the State has yet to finalize the details regarding its implementation. It’s likely that this hold-up is due to cost of implementation, though twenty three states have already been successful in implementing ABLE programs. Hopefully, this number will soon increase to twenty four.

Call us at 609-924-2900 if you have a possible case or visit our web site at www.strichlaw.com.