Family Law

HOME SWEET HOME: DEALING WITH REAL ESTATE AND DIVORCE IN AN EVER-CHANGING MARKET

March 11, 2022 | Kevin M. Mazza, Esq.

For most people going through a divorce, their interests in real estate are often the primary assets that need to be divided. Whether it is the marital home, a vacation property, or commercial real estate, most litigants question how they are addressed in a divorce. Like all other assets acquired during the marriage, the law requires that they first be identified and then valued, after which the court (or the parties by Agreement) can effectuate their “ equitable distribution”. However, dealing with real estate in divorce has become more challenging given the ever-changing market. This blog post will attempt to briefly address some of these issues.

The first task is to identify those real estate holdings that may be subject to equitable distribution. To be subject to equitable distribution, they usually need to have been acquired “ during the marriage”, which is generally defined as between the date of marriage and the date the divorce complaint is filed. However, as with most things in divorce, there are some exceptions. Real Estate acquired “in contemplation of marriage”, often the marital home, may be considered subject to equitable distribution even though purchased prior to the date of marriage, if certain elements are established ( a topic for another blog post perhaps). Furthermore, sometimes real estate may change in value, not due solely to market forces, but through the “active” efforts of the owner or financial contributions towards improvements. If those “active” efforts or contributions occurred during the marriage, even if the property itself was originally acquired prior to the marriage, any change in value attributable to same may be considered a marital asset subject to equitable distribution.

Once marital real estate assets have been identified, they need to be valued. Often the parties may decide that they want to simply sell the real estate and divide any “net proceeds” in some fashion. In this case, the property may not need to be valued as the market itself will establish its “value” when it is sold. However, in other instances, real estate may not get sold either because one or both parties want to retain it (i.e. the marital home) or it may not be amenable to be sold ( i.e. commercial property housing a business). In these instances, its value will need to be established by way of appraisal done by a professional real estate appraiser. Sometimes to save the cost of an appraisal, the parties may go to a local realtor for a CMA or Comparative Market Analysis. This is not the same thing as an appraisal but is usually just an estimate based upon recent listings or sales in the area to support a possible listing price. Hence, courts generally do not accept CMA’s as proof of value. That is not to say that parties may also attempt to“stipulate” or agree as to a property’s value, but in today’s market that can be a challenging task. And frequently parties have different motivations concerning the disposition of the property which may lead them to either want to minimize or maximize its value in a case. While parties may also secure competing appraisals, discrepancies are usually small and generally reconciled between the appraisers or during discovery or at trial.

Proving Cohabitation Just Got Officially Easier

June 30, 2021 | James P. Yudes, Esq.

Attached is the Decision in Temple v. Temple. I previously wrote about the importance of this decision in which this office created a new and easier standard for a payor of alimony to prove a claim of cohabitation. Although not originally published many prominent attorneys, as well as the American Academy of Matrimonial Lawyers, wrote to the Committee on publications asking that the case be published. If you have a cohabitation case we would be happy to review it and discuss your rights. Since in this area as in many issues involving Family Law, “We made the Law.”

REGULAR OPINION (OPN-REVERSED IN PT REMANDED IN PART)

Can You Save Your Marriage: The Cultural Divide….

June 18, 2021 | James P. Yudes, Esq.

Let’s talk about polarization, which can now be considered a commonly used catchphrase. We see the destructive effects of it everywhere in our culture. Conservatives against liberals, Democrats versus Republicans, Pro-choice versus Pro-life. The list is endless but the rhetoric is similar, “we are right they are wrong,” “we have God and free will, and with that comes the right of humanity, which is on our side, and those who do not agree are just plain evil.” No one recognizes merit in the other’s thoughts, words, ideology, or position we have become quick to jump to the conclusion if you don’t see it my way you are in the wrong.

The attitude and conclusions mentioned above can be seen on an amplified platform through news channels, specifically through Fox vs CNN, which is only contributing to the slow but steady pulling our Nation apart. This concept that there is only one right view or approach to a problem or a way of life is not just political it has seeped into our culture. From movies to video games, sports to ballroom dancing we pit groups against each other take sides and cheer for our team. Unfortunately in marriage, this idea of right or wrong, my way or the highway is poisonous. Unlike in politics or a Rambo movie, marriages only work if there is compromise. I am frequently asked at events what is the biggest cause of divorce to which I respond marriage and move on. No one really wants a dissertation on the problems of our society with their martini.

Looking back over the decades of divorces numbering in the tens of thousands I would say the primary reason people get divorced is a lack of communication. That same rigid preconception that I am right and you are wrong that infects our public discourse often infects the more intimate discussion between spouses. The idea that there is one right way and that way is mine may work in the Senate ( not really ) but it does not work in the bedroom or for that matter in the kitchen. Marriages that work have open communication a sharing of ideas and goals and the flexibility to see the other side and make room in your brain and your heart to consider the alternative.

Getting A Hearing When Your Spouse Cohabits Just Got Easier

June 17, 2021 | James P. Yudes, Esq.

In a previous blog, I promised that the Appellant Division was going to revisit the proof required to be presented before one could obtain discovery of a dependent former spouse’s social and financial circumstances; as of today June 17th, 2021, the case has been decided although not yet approved for publication.

Temple v. Temple ( A-0293-20) is an important decision for anyone seeking to terminate their alimony obligations based on their former spouse’s cohabitation. In Landau v. Landau, the appellant court indicated that before one was entitled to discovery or a hearing, regarding issues of cohabitation the proponent of this change in circumstance needed to prove evidence of said change. The problem with Landau was that it did not address what proofs were needed in order to meet the requirement and move forward with the discovery phase.

The Trial Judge on Temple found that to be successful on an application one needed to prove all six factors set forth in the statute as things to evaluate when determining if a prima facia case was established. The Appellant Court accepted our argument that one needed not to prove all six statutory factors to establish a prima facia case but must only establish sufficient evidence so that the trier of fact may conclude that the parties have “ undertaken duties and privileges that are commonly associated with marriage or civil unions.”

Proof Needed to Prove Cohabitation will soon be Clarified….

June 11, 2021 | James P. Yudes, Esq.

On June 8th, I argued a case of significant importance in the Appellant Division. Although I have not received a decision as of yet, I am still of the belief I was heard. The case involved an application from the supporting spouse to terminate alimony based on the cohabitation of his former spouse. Although I did not represent my client at the trial level I believe that my predecessor made the necessary arguments allowing me to present the important issues to the higher court. The Trial Judge had misread the recently decided, Landau decision, believing that the fact in Landau created a litmus test as to what constituted a Prima Facia case allowing discovery and a plenary hearing as to the issue of cohabitation. In fact, Landau provides that before one is entitled to discovery and a plenary hearing one must establish a prima facia case.

A prima facia case is one where the court is to consider the issues presented by the proponent of a proposition in the light most favorable to said, petitioner. In considering the assertions of the petitioner the defenses offered by the opposition are not to be given weight. Since the opposition is not required to give evidence, their election to give selected evidence is should not be considered as the issue is not ultimately a success on the merits but rather the sufficiency of the assertion to justify a full examination of the issue.

The idea of a prima facia case as an entry ticket is based on the privacy right of the dependent spouse who ought not to be forced to divulge intimate details absent the presentation of more than innuendo. In my case, there was significant proof including a private investigator’s report, statements by the paramour of the closeness of the relationship, and some economic proof. The initial problem was that the Trial Court had misread the law, this error of the law was compounded by the trial courts weighing the defenses of the dependent’s former spouse and finding her explanations more credible.

MONEY CAN’T BUY ME LOVE

May 14, 2021 | Kevin M. Mazza, Esq.

In the midst of the continuing global Covid pandemic, escalating tensions in the Middle East, the humanitarian crisis at our southern border, rising gasoline prices and hacking of pipelines, among other events, there was one news report which trumped them all: Bill and Melinda Gates were getting a divorce! Bill Gates, the co-founder of Microsoft, and his wife, Melinda, have been married for 27 years and have three children. They have an estimated net worth of approximately $124 billion, making them amongst the wealthiest people in the world. In announcing their divorce, they simply indicated “We no longer believe we can grow together as a couple in the next phase of our lives”. The Gates’ divorce comes on the heels of the recent divorce of another of the world’s wealthiest couples, namely Jeff Bezos, the founder of Amazon, and his wife Mackenzie. The Bezos’ divorce in 2019 after 25 years of marriage and four children resulted in Mackenzie receiving an estimated $37 billion settlement, largely made up of Amazon stock, out of a total net worth estimated to be $137 billion. It is noteworthy that the Gates’ did not enter into a prenuptial agreement at the time that they married in 1994 at which time Bill Gates was already believed to be the richest person in the United States. To the extent to which the Gates’ will follow the lead of the Bezos’ and reach an amicable, quick, yet lucrative, divorce settlement is to be determined. However, what these divorces demonstrate is that despite having all of the wealth in the world, as the Beatles so prophetically sang “Money Can’t Buy Me Love”.

Since its inception, the law offices of James P. Yudes have handled countless divorce cases involving high net worth couples. These types of cases often present unique issues and challenges which our over four decades of experience enable us to address. Sometimes, resolving these types of cases can be relatively simple and straightforward. The assets of the parties may be readily identifiable. Determining their value may be as easy as looking at a bank or investment statement or obtaining appraisals. In certain instances, just like Bezos and Gates who own publicly traded companies, their value is a function of the market price of the stock. It can then just be a matter of how best to divide this marital estate fairly and equitably, while enabling the parties, whether from utilizing those assets or other income streams, to enjoy a lifestyle reasonably comparable to that of the marriage. While the marriage may not have worked out, the hope is that in these sorts of scenarios, just as with the Bezos’ and Gates’, both parties will be able to move on with their lives, and share in the success that they had accrued during the course of their marriage.

Unfortunately, not all high-net-worth divorces proceed so amicably. In many instances, there are businesses involved. However, most of the time these businesses are privately owned, and not publicly traded. Usually, it is one spouse who owns and/or runs the business. If the reasons for the parties splitting up is not very “amicable”, the level of anger, if not hatred, between the parties fuels a level of mistrust, leading to disputes as to what may be going on with that business’ “value”, and the income generated therefrom. As a result, these matters can result in a hotly contested litigation, involving extensive discovery, competing financial experts, and the possibility of a trial to have the issues be decided by the court. Even in situations where there is not a level of animosity between the parties themselves, honest differences of opinion as to the value of businesses or other marital assets, the level of income, or the nature of the marital lifestyle may still exist requiring discovery, expert assistance, and financial expertise to resolve those issues. Yet the ultimate goal remains the same, and whether achieved by way of a mutual settlement or by a determination of the Court, that there is a fair and equitable division of the marital estate and an ability on the part of both parties to move forward with their post-divorce lives. Indeed, that is this firm’s goal in every divorce case we handle, and not just high net worth cases.

We Just Made the Law regarding Mid-Marriage Agreements

May 3, 2021 | James P. Yudes, Esq.

Consistent with our firm’s position of being a leader in the field of Family Law, we have just received a decision on one of our appeals, meaning it is now law that will be binding for trial courts. The case is, Steele V Steele, and it was approved for publication today as I write this on, April 30, 2021.

This case analyzed the types of contracts that engaged and married couples can enter into. It makes clear that contrary to unreported decisions that premarital agreements are creatures of statute and that judges are bound by the statutory scheme and can not vary it. In the Steele case, the trial judge erroneously found that an agreement entered into after the marriage was a prenuptial agreement under the act because the husband had expressed an intent to have such an agreement.

The case then goes on to discuss when and if a marital agreement can become enforceable. Recognizing that divorcing adults are susceptible to entering into agreements that are enforceable because they are adverse to each other. It should also be stated that those with marital trouble on the potential path to divorce can contract so long as the agreement is fair at the time it was entered into and at the time enforcement is sought. In Steele, the wife had just conceived a child and was breastfeeding when she entered into the agreement. Unbeknownst to her, the husband had been preparing an agreement even before the parties were married changing the way he valued assets; ignoring some assets and sources of income altogether. The court indicated that for the post-marital agreement to be enforceable the agreement needed to be fair and equitable. Meaning that the dominant partner needed to make a full and complete disclosure of all assets and income without exception. In the Steele matter the husband who admitted to being worth at least 9 million dollars at the time of the agreement, did not decide to play fair and disclose all assets and used inconsistent means to value assets choosing in each instance the valuation technique that yielded the lowest monetary value. In this matter, the husband did not disclose all sources of income and ignored significant income-producing assets held in trusts. Another condition of enforcing such agreements is that they must be fair and equitable when the agreement is reached as well as when enforcement is sought. In this matter, a home selected and purchased after the parties’ marriage was excluded from property to be shared upon divorce and in the event of the husband’s death, his wife and young child would be left destitute as in the document the wife had waived any claim against the husbands’ estate. The overreaching of the husband is well documented in this exquisitely crafted appellant decision.

BUT IT’S THE LAW!

April 16, 2021 | Kevin M. Mazza, Esq.

This happens with regularity. A new and sometimes even an existing client will tell me about a divorce case involving a friend, relative, or acquaintance that had issues “similar” to theirs’s, and that the judge, in that case, had decided those issues this way or that. They expressed a belief that how the judge decided those issues “must be the law”, and therefore, they would expect to have a similar result in their case. Why I certainly thank them for the information, they are then surprised and disappointed when I tell them that every divorce case is different and that how one judge may have decided the issues is not necessarily determinative on what will or shall happen in their case, and/or that the decisions of a judge in a different case are in no way binding upon the judge handling their case. The other judge’s decision may be the “law” in their friend, relative, or acquaintance’s case, but is not necessarily the law in theirs.

Before discussing the “legal” reasons for this, there are some very practical reasons why it is unwise to compare what may have happened in one divorce case with any other. The first reason is very simple. Just like no two people are exactly the same, neither are any two marriages nor the issues arising from the dissolution thereof. A primary breadwinner may “earn” the same amount of money, but one is a W-2 employee with a long-standing steady job and the other a small business owner whose income is based on many variables and creates a whole different set of considerations. The parties may be married for the same number of years but in one both parties have been gainfully employed, while in the other a party may have given up or deferred a career to raise children. In another, the parties may each have had two children, but in one the children are relatively healthy and doing well academically, but in the other, a child may have special needs or behavioral or educational deficits. The parties may have enjoyed the same family income, but one lived frugally and the other beyond their means. You get the point. As much as one may see similarities, no two marriages are alike. No two life stories are the same.

When a divorce case comes before a judge, there are certain legal authorities that the judge is to apply in deciding the issues in that case. There are statutes which have been enacted by the Legislature. There are Court Rules which have been promulgated by our Supreme Court. There are published decisions, which have been rendered by the courts in which they have interpreted, implemented, and/or applied those statutes and rules to a given case. A judge applies that legal authority to what it finds to be the facts and evidence in the case and renders a decision. However, since the facts and evidence are never exactly the same and vary from case to case, the resulting decision, even applying the exact same law, will vary as well. That, plus the fact that much of the law governing divorce matters is not based upon any sort of simple “formula”, but upon a multitude of factors a court is to consider, and which afford the court with a great level of discretion in determining. This ability to exercise discretion necessarily leads to different results depending not only upon the facts and circumstances of the case, but the weight of the evidence, the credibility of the testimony, and the “feel” of the case itself, so the judge can make a decision which is fair and equitable.

Who’s The Boss of Your Divorce?

April 5, 2021 | James P. Yudes, Esq.

The care and feeding of the lawyer you hire is an important aspect of divorce husbandry. Too often I hear a litigant complain that their lawyer made a deal or a concession without consultation of the client. Some divorce lawyers take a paternalistic role in the responsibilities of their client, which can be a good thing when not taken to the extreme. The extreme occurs during non-emergent situations when the lawyer makes an agreement that affects a substantive right. Unless you have given the lawyer authority in advance, they should never do something that impacts your economic or custodial rights without your permission. Often in conferences with the court concessions can be strongly suggested by a judge or pushed by an adversary, because of this a lawyer can feel cornered. A good lawyer will always back off reminding the participants that they themselves (the lawyer) can not make such a concession without first discussing it with their client. I have never been in this position when that simple reminder did not cause the court to immediately back off. Judges want cases to move and they want the parties to settle but they are aware that litigants, not lawyers make deals and that lawyers should not make concessions without their client’s authority. The problem that arises, is that lawyers have what is called “apparent authority” meaning if the lawyer agrees to something the law assumes they had the authority to do it. If your lawyer has made a substantive concession without consulting you document it. Send the lawyer a letter or an email indicating the date you were advised of the concession and that you were not consulted and do not agree. Insist they reverse the agreement and that they admit they made a mistake. If they refuse… run. Get another lawyer quickly and fix it. Waiting could be viewed as agreeing to the terms.

Note that I have been talking about substantive issues. Substantive issues, for example, deal with; parenting time, the level of alimony or child support, the payment of fees, and the sale or distribution of property. Lawyers usually do not seek their client’s consent when dealing with calendar issues unless the issue involves the client. If you are being deposed or if the deposition of a witness is being scheduled you have a right to be consulted about your availability however if the calendar does not concern you, the lawyer may rightfully resolve the timing of things.

I often analogize my role as a family law attorney to that of a captain of a ship. When on the high seas and an emergency occurs that requires an immediate decision that is up to me as well as direction and strategy. But ultimate decisions are made by the shipowner ( the client). The relationship between a lawyer and his client is interactive and symbiotic. The need to work cooperatively should be a consideration when choosing your lawyer. Objectives should be discussed and parameters established to reach those objectives. The lawyer develops the strategy to accomplish those goals. During the process, open communication is important looking at the objectives but always with the understanding that the ultimate decision is always the clients, although that decision may be informed by the lawyer.

HAVE NO FEAR

March 26, 2021 | Kevin M. Mazza, Esq.

During one of my recent commutes, I heard a commercial on the radio for a New York law firm talking about people’s “fear” of the divorce process. When I hear the term “fear”, it brings to mind the phrase uttered by FDR to the effect that “the only thing we have to fear is fear itself”. I believe that this expression rings true when it comes to divorce. When I consult with a prospective client, one of my most important jobs is to reassure that person that there should be nothing to fear from the divorce process and of making the leap of moving on from an unhappy, unhealthy, and/or destructive relationship.

Perhaps fear is too strong a word. Apprehension. Trepidation. Nervousness. Embarrassment. Concern. Ignorance (i.e. a lack of knowledge). These seem to better reflect the range of feelings and emotions that I see from most of my prospective clients when they first meet with me. Whether these consultations are conducted in person, virtually, or over the phone, my experience is generally the same. Regardless of whether the person is a man or a woman, their voice is full of emotion. Their voice may crack. They have trouble finding the right words or even getting the words out. They may tear up. Often they feel the need to apologize. But no apology is needed. I assure them that what they are feeling is real, is normal, and to assure them that I am there to help them and to listen to what they have to say. Gradually, those acute emotional feelings begin to subside. They become more comfortable in opening up as to what is going on in their lives and why they are considering the possibility of divorce. After having done this work for almost 40 years, the reasons why people are considering divorce are often similar; however, everyone’s life story is personal to them and is entitled to respect and understanding. It is not only important to hear but to listen. And when someone senses this, a client will not only lose their apprehension in speaking to whom only minutes ago was a perfect stranger, but will be receptive to answering the questions us attorneys must ask to learn exactly what the issues are in a given case and to provide the appropriate advice and knowledge to the client to move forward with whichever course of action they may want to pursue.

When it comes to divorce, fear can be a most negative emotion. Fear can be paralyzing. Fear can cloud one’s judgment. Fear can lead to rash and imprudent decisions. Fear can lead to harm to oneself or others. This destructive side of fear can arise at any time. Hence my job is not only to temper it at the outset but to prevent it from infiltrating my client’s psyche throughout the process. At the outset of a representation, it is important for a client to know that they have someone that listens, that has explained the law, their rights, and the divorce process. However, as the disputes surface, and the reality of the marriage’s end arise, an attorney’s job is to provide a constant state of assurance and not allow one’s emotions to take over. Being there, listening, explaining, and advocating hopefully serve as an antidote from destructive emotions such as fear overrunning a case.