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Child Support – How New Jersey Courts Calculate and Modify Support Obligations

Published on: October 14, 2016 | by James McGlew, II

In New Jersey, child-support is defined as a financial payment from one parent to the other to provide for the needs of their child or children. Child support is the right of every child and neither spouse can waive this responsibility. All parents regardless of their marital status have an obligation to support their children until they are deemed emancipated.

In most instances, the amount of child support to be paid is calculated by using New Jersey’s Child Support Guidelines. Income information is exchanged between the parents and this data is used in combination with factors such as the number of children, percentage of non-custodial parenting time and other prior child support obligations, to determine the amount of child support that is to be paid weekly. The Guidelines take into account the amount of funds necessary between the two parents to cover the basic needs of the children including, but not limited to, their food, shelter, healthcare and clothing expenses.

Child support obligations will remain in place for many years. Child support is not terminated automatically and may continue longer based on extraordinary circumstances such as the special needs of a child. As such, a common aspect of many divorce agreements is an agreement between the parties for the use of a “COLA” which is an acronym for Cost-of-Living Adjustment. This procedure automatically raises child-support awards every two or three years, the specific details of which are negotiated and agreed to before any final divorce judgment is entered. The purpose of a COLA is to keep the child support award’s value current due to inflation. If child support is payable through the Probation Department, parents are often contacted directly regarding the implementation of a cost of living adjustment.

Lifetime Gift Planning in New Jersey

Published on: October 13, 2016 | by David G. Hardin

New Jersey has been widely recognized as among the more onerous states in terms of transfers at death. While federal and state death tax laws have been loosened over the past many years so as to exempt more and more people from estate and inheritance taxes¹, New Jersey has not been among them. New Jersey’s estate tax exemption stands at $675,000 per person. By contrast, the federal estate tax exemption is currently $5,450,000 per person² ; the New York estate tax exemption is currently $4,187,500 (rising to the federal exemption level in 2019); the Connecticut estate tax exemption is $2-million; and Florida has no estate tax at all.

The federal estate tax regimen encompasses both lifetime gifts and death-time transfers. The federal estate tax exemption is reduced by taxable gifts made during lifetime. For example, an individual making a taxable gift of $100,000 in 2016 would reduce his or her federal estate and gift tax exemption by that amount, leaving a remaining federal estate and gift tax exemption of $5,350,000. An individual making a taxable gift during lifetime does not incur a gift tax liability for federal purposes until the entire federal exemption is exhausted. In 2016, that means one would have to make taxable gifts in excess of $5,450,000 before a gift tax becomes payable. This unified estate and gift tax structure for federal purposes does not differentiate between lifetime and death-time transfers, and consequently for gifts of equal value up to the maximum federal exemption amount there is no intrinsic benefit of a lifetime gift over a death-time transfer³.

In contrast to the federal estate and gift tax regime, New Jersey imposes a tax only on death-time transfers. For policy reasons that are not entirely evident, New Jersey does not impose a tax on lifetime gifts⁴. This anomaly between the federal and New Jersey tax structures offers a planning opportunity in a number of situations. An example will illustrate the point. Assume that an unmarried individual has a taxable estate with a value of $2-million and that the beneficiaries are children of the individual. Given the federal exemption of $5,450,000, there is no federal estate tax liability, regardless of the identity of the individual beneficiaries. For New Jersey death tax purposes, inasmuch as the beneficiaries are children of the individual, the New Jersey inheritance tax is inapplicable, and the only tax of concern is the New Jersey estate tax. The New Jersey estate tax on a taxable estate of $2-million is $99,600.

“Pet Trusts”: Providing For Your Pets After Death

Published on: October 12, 2016 | by Lindabury, McCormick, Estabrook & Cooper, P.C.

In today’s society, it’s becoming increasingly common for our pets to be treated as part of the family…but what happens to your pet or pets upon your death when you are no longer there to care for them? In the eyes of the law, animals are considered property…so you can’t leave money directly to your pet. On January 19, 2016, the legislature passed the New Jersey Uniform Trust Code (NJUTC), which became effective as of July 17, 2016. As part of the NJUTC revisions, modifications were made to the rules regarding the creation and use of “Pet Trusts.”

Under the new law:

a. A trust may be created to provide for the care of an animal alive during the settlor’s lifetime. The trust terminates upon the death of the animal or, if the trust was created to provide for the care of more than one animal alive during the settlor’s lifetime, upon the death of the last surviving animal.

Dealing With Digital Assets During Life and After Death

Published on: October 12, 2016 | by Anne Marie Robbins

We live in a digital age. The advent of the personal computer, the rise of social media, online access to financial accounts and commerce, and the development of increasingly efficient programs and applications affording easy access to our finances, shopping, entertainment activities, and communications, have helped to create a world in which each of us likely spends a portion of most days online. The result is often a trove of digital assets that we have created, communicated, and stored. Some of these assets may have substantial inherent financial value (for example, frequent flyer miles and other award programs), some may have value because they are the means of accessing other assets (e.g., your bank account user name and password), and some may have sentimental value (such as your e-mail account holding personal correspondence).

Digital assets can present a challenge for fiduciaries. Items that 30 years ago would have had a physical existence, such as bank account statements, may now only exist in the digital realm. Because digital assets are intangible, identifying them and gaining access to them on behalf of their owners can be time-consuming and often, because this is a relatively new asset class and the rules governing it are still evolving, unsuccessful. Through planning, it is possible for individuals to take steps to protect what matters in their digital lives.

Most service providers include their policies regarding deceased users’ accounts in the terms of service provided when a user establishes the account, including what happens when the account owner dies. However, few people in practice pay attention to the provisions to which they are agreeing. It is sometimes the case that a service provider’s terms of service will cause all access to terminate as a result of an account owner’s death. Service providers are beginning to address the probability that many users would want someone to have access to the content the user has created or stored. For example, Google has an “Inactive Account Manager” function that allows users to determine what happens to the digital assets stored on Google sites after a period of inactivity. The user can request that Google either notify a specified individual and share information with that person, or can request that Google delete an account and its contents.

Restrictive Covenants Can Thwart Development In Some Cases

Published on: October 11, 2016 | by David R. Pierce

But Can Also Be Used As An Effective Tool To Enhance The Desirability And Market Value Of Other Developments

Many people believe that restrictive covenants are antiquities not to be seen in their lifetime, however, a recent unpublished Appellate Division case, Welch v. Chai Ctr. for Living Judaism, Inc., Nos. A-4088-13T1, A-4163-13T1, 2016 N.J. Super. Unpub. LEXIS 1906 (App. Div. Aug. 15, 2016), should serve as a reminder of their effects.

Restrictive covenants are restrictions contained in a deed which run with the land and either restrict the use of the land or prohibit specified uses. Thus, restrictive covenants can have critical impacts on proposed development of the land. On one hand, they can thwart proposed development, as in the Welch case, but alternatively, they can be used to enhance the desirability and market value of some developments, particularly residential developments.

Common Carriers Can Utilize Maritime Lien Law to Enhance Their Creditor Position in Chapter 11 Matters

Published on: September 23, 2016 | by Blake C. Width

In re: World Imports LTD (No. 15-1498)

Recently, the U.S. Court of Appeals for the Third Circuit issued a favorable decision for a secured creditor in the context of maritime liens on the prepetition goods of a Chapter 11 debtor, World Imports, Ltd., et al. The court noted the existence of a strong presumption that the creditor, OEC Group (“OEC”), a provider of non-vessel-operating common carrier transportation services, did not waive its maritime liens in connection with the prepetition goods. The court indicated there was clear documentation that the parties intended such liens to survive delivery of the goods, and evidence of an intention to preserve the lien after delivery. The contract stated that the “lien shall survive delivery, for all sums due under this contract or any other undertaking to which the merchant was party.” In support of the decision, the Court noted the “familiar doctrine” of admiralty courts that enables maritime liens to attach to property substituted for the original object of the lien. Although the lien arose by operation of law, the Court held that the parties were free to modify or extend the existing liens via contract, extending the lien from the prepetition goods to the “current goods” which included landed goods in OEC’s possession and those goods in transit for which OEC was to provide delivery in the near future.

The Court reasoned that the express agreement that OEC would not waive its liens upon delivery, constituted an ex ante agreement that OEC would retain the position already afforded by operation of maritime law. Essentially, the extension of the outstanding liens from prepetition goods to current goods functioned, in the aggregate, as it would have as to individual shipments, under maritime law.

Morristown New Jersey Adopts Paid Sick Leave Ordinance

Published on: September 22, 2016 | by John H. Schmidt, Jr.

As the State legislature continues to debate the merits and the provisions of a comparable state law governing paid sick leave, Morristown has moved forward. Morristown now becomes the 13^th municipality in New Jersey to adopt a paid sick leave ordinance that is applicable to all non-union, non-governmental employers operating within its city limits.

The Morristown ordinance is very similar to one that was earlier adopted by the City of Newark. It provides that all employers who have employees working in Morristown for at least 80 hours in a given benefit year, except any governmental employees or members of a construction union covered by a collective bargaining agreement, are obligated to comply with the ordinance that provides:

Employees accrue one hour of paid sick time for every 30 hours worked.

Deadline Approaching for Real Estate Tax Exemption Filing

Published on: September 21, 2016 | by Roger Mehner

November 1 is an important date for non-profit corporations and associations seeking exemption from real property taxation for their owned real estate. An application for exemption in the first instance with respect to a particular property is made by filing an Initial Statement (on the State prescribed form) with the municipal Tax Assessor on or before November 1 of the pretax year. Under New Jersey law, tax exemption is based on the actual use and ownership of the property on October 1 of the pretax year. In order to be eligible for tax exemption in 2017, property must be owned and actually used by an organization entitled to exemption for an exempt purpose on October 1, 2016. The deadline is a real one; the Assessor has no obligation to honor an Initial Statement filed after November 1.

Once exemption is granted pursuant to the filing of an Initial Statement, the owner must update the filing on or before November 1 of the third year after filing the Initial Statement, and every three (3) years thereafter, by filing a Further Statement (also on a State prescribed form). Again, the November 1 deadline is important and an owner can lose its exemption by failing to meet the filing deadline.

Once an Initial Statement is filed and approved, most Tax Assessors routinely send owners of exempt property a request for a Further Statement every three (3) years. However, failure to receive notice from the Assessor does not excuse the owner from filing. Accordingly, owners of exempt property should take care to diary and keep track of this important filing deadline.

Step By Step Guide For When Your Spouse Files For Divorce

Published on: September 6, 2016 | by James McGlew, II

Whether you have been served with notice that your spouse has filed for divorce, or if you are contemplating filing for divorce yourself, there are important steps anyone facing this scenario should undertake.

The first is to stay calm. This is obviously easier said than done but it is important as many people do or say things while processing this major life change that they later come to regret.

If you have children, take whatever steps necessary to distance them from the proceedings you or your spouse are considering. At this early stage of the process there is no benefit to advise them of the situation and they should not be involved in any discussions between you and your spouse. Children should never be compelled to “choose sides” regardless of their age.

“Inherently Beneficial Uses” Get Favored Zoning Treatment – What Non-profits and Community Organizations Need To Know

Published on: August 30, 2016 | by Roger Mehner

Are you a non-profit or other community oriented organization looking to expand or relocate your facilities? The law may give you a distinct advantage in obtaining the necessary zoning approvals. The dynamics of growth, evolving missions and changing communities can lead to a need for expansion to meet current demand for services; in some cases the organization may need to relocate facilities where there is insufficient room to expand, or when changes in communities make relocation appropriate to continue the mission of the organization.

Non-profit agencies and other community based organizations often have facilities which have existed for long periods of time, predating current zoning requirements. Existing locations often no longer permit the organization’s use, rendering the organization a “prior non-conforming use” under the law. Even if the organization seeks to relocate its facilities, there are often few locations in any town where such uses are permitted, making the availability of such locations limited and expensive.

Whenever a non-conforming use seeks to expand, or where an owner seeks to construct a use not permitted in a zone, a use variance is required under N.J.S.A. 40:55D-70(d). Such variances require a five vote super-majority of the Board of Adjustment to be approved. The applicant must affirmatively prove “special reasons” justifying grant of the variance, the so-called “positive criteria” under the statute. In addition, the applicant must also prove the “negative criteria” under the statute by showing that the variance can be granted without substantial detriment to the zone plan, zoning ordinance or public good.