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 AAML NJ Blog


  • 20 Dec 2022 11:53 AM | AAML NJ Administrator

    Written by Ronald Lieberman, Esq. | Adinolfi, Lieberman, Burick, Roberto & Molotsky, P.A., AAML New Jersey Fellow

    A prenuptial agreement is a binding, written document (contract) signed by two people before their wedding to control their rights and obligations in ways which may be different than what the law would compel on those topics. This contract protects assets and sets forth spousal support or maintenance obligations in case of a divorce. There are some things to know before signing a prenuptial agreement.

    CHILDREN ARE NOT A PART OF THE AGREEMENT

    Regardless of the desires of the parties, a prenuptial agreement cannot dictate anything having to do with children (such as child support or child custody), whether born before or after the wedding. But, you can dictate financial considerations for children from previous relationships.

    AN ATTORNEY IS CRITICAL BUT NOT REQUIRED

    You can enter into a prenuptial agreement without an attorney but going down that path can lead to complications. Your attorney understands the details of the law and will ensure you have fair representation in your prenuptial agreement. The attorney will work to make sure the prenuptial agreement is as “ironclad” as possible by detailing everything out in a way that protects your rights and your assets.

    FULL DISCLOSURE IS REQUIRED OF INCOME, ASSETS, AND DEBTS

    The purpose of a prenuptial agreement is to keep assets and debts separate and to dictate spousal support/maintenance in case a marriage fails. So, without a full and complete disclosure of all sources of income (earned and unearned), assets, and debts, the prenuptial agreement will likewise fail and assets and debts could end up being divided.

    By disclosing income, assets, and debts, you are protecting them. Such full financial information is important for a healthy relationship and essential for the agreement's validity.

    AGREEMENTS IN NEW JERSEY MUST BE FAIR AT THE TIME OF THEIR ENTRY

    In New Jersey, a prenuptial agreement must be fair at the time of its entry, which may be different than how the agreement will be interpreted at the time of a dissolution.

    Fair does not always mean there must be a proportionate division of assets and debts, or spousal support/maintenance in line with New Jersey law. But fair will mean a full disclosure of income, assets, and debts, and a relatively equal bargaining power between the parties. The timing of the signing of the prenuptial agreement compared to the date of marriage will also be important in determining fairness.

    CONSIDER ENTERING INTO A PRENUPTIAL AGREEMENT WELL IN ADVANCE OF MARRIAGE

    One of the worst ideas is to enter into a prenuptial agreement close to the date of marriage. But you will need to hire an attorney, and to discuss the issues with him or her. You will need to compile the information about income, assets, and debts. Your attorney may not be able to provide “laser focus” on your matter because of their obligations and commitments to other clients. So, you should be entering into a prenuptial agreement sooner rather than later compared to the wedding date is the best policy.

    PRENUPTIAL AGREEMENTS ARE NOT COERCIVE

    You can control the division of assets and debts, and whether and how spousal support/maintenance will be paid. You cannot dictate the behavior during the marriage of your soon-to-be spouse or limit him or her in any way as to how they live their lives during the marriage. You cannot mandate children be born or adopted, or similarly preclude that option. Any such action will lead a judge to invalidate your prenuptial agreement.

    Are you looking for more guidance on prenups? Contact one of our Fellows

  • 6 Dec 2022 4:34 PM | AAML NJ Administrator

    By Christine Fitzgerald | Seiden Family Law, AAML NJ Fellow

    Children are the most important consideration in any family law matter, in which the parties have children in common, and sometimes, even when they do not have children in common.  When potential clients come in for a consultation, they often have an idea of what they want for parenting time or the custodial arrangement.  But they often are missing key issues or have a misunderstanding of the law or of custody and parenting time in general.  These are seven of the numerous things to know about custody arrangement in New Jersey:

    1. One Size Does Not Fit All: Every family is unique 

    Every custody arrangement is unique.  You and your coparent can craft a custodial arrangement and parenting time schedule that works for YOUR family.  

    2. Legal And Physical Custody Are Different 

    Clients often come in and say I want full custody.  In New Jersey, we have legal custody and physical custody.  Legal custody is who will make the major decisions for the children, such as educational decisions, medical decisions, and religious decisions.  Physical custody is who will be deemed the Parent of Primary Residence of the children and what is the parenting time schedule. 

    3. Preference For Joint Legal Custody

    In New Jersey, there is a strong preference for joint legal custody whereby the parties have to consult, confer and cooperate with each other to make major decisions affecting the best interest of the children together.  

    4. Designation of Parent of Primary Residence

    There does not have to be a designation of Parent of Primary Residence in every case, even when one party has more parenting time with the children than the other parent.  The designation is, however, in cases of 50/50 parenting time when the parties live in different school districts to determine where the children are going to attend school.

    5. You Do Not Need To See The Future

    Custody and parenting time are always modifiable if there is a substantial change in circumstances.  When your children are little, you do not need to anticipate every decision or every possible change that could occur.  You have the option of reviewing and modifying custody and parenting time so long as there is a substantial change in circumstances warranting a modification of the custody and/or parenting time. 

    6. Best Interest of the Child Rules

    The standard that a Court will be considering your custodial arrangement, parenting time, and/or modification of either is what is in the best interest of the child.  You should consider what you are proposing or requesting in those terms. 

    7. Holiday Parenting Time

    Coparents often make the mistake of not thinking about how the holidays will play out in real life.  If both coparents have families that live far away and far from each other and both coparents want to spend holidays with their respective families, then splitting the actual holiday (such as Thanksgiving Day or Easter Day) is not practical. Instead, consider alternating holidays so that one party gets Thanksgiving with the children in even years and the other in odd years.  Think about your traditions and what makes most sense for you, your coparent and, most importantly, the children. 

    As number 1 above makes clear, there is no right way to craft your custodial arrangement. You have to determine what works for your children and your coparent.  Your children are the most important part of your matter so creating a practical arrangement in their best interest is never wrong. 

  • 1 Dec 2022 10:11 AM | AAML NJ Administrator

    By Alex Krasnomowitz, CPA, CVA, MBA | Smolin | AAML NJ Gold Sponsor

    Divorce can be a stressful and time-consuming process. Following the end of divorce proceedings, family law attorneys may find that estate planning is the last thing on their clients’ minds. Still, it’s vitally important that clients update their estate plans to reflect their new situation.

    As an attorney, you may not be the one working on those estate plans, but part of the divorce process is looking to secure long-term security for your client—and that includes solutions for financial success in the future. 

    It is crucial that estate plans are considered when going through a divorce—but it can be a challenge to find the right person to help your client through the basics of estate planning. To set clients up for success in all areas of their divorce, you may have to refer your client to an estate planning attorney, either in your firm or outside your practice. 

    By thinking proactively about solutions for your client, you’ll be helping to protect and control their assets while building valuable referral relationships. Below, we discuss a few key considerations for long-term financial planning that might be indicators your client could benefit from speaking with an estate planning attorney.

    Using trusts to control assets

    Since divorce usually extinguishes an ex-spouse’s rights under a will or other trusts, it is unlikely that a client's property will be directly inherited by an ex-spouse. However, it is still possible that an ex-spouse could have more control over their wealth than they would prefer, especially if they have minor children.

    When a minor inherits property, that property is generally held by a custodian until the child reaches the age of majority—either 18 or 21, depending on the state. A surviving parent (including an ex-spouse) may act as the custodian in some cases, which could allow them to make decisions about how assets in trust are spent or invested until the child comes of age. 

    Creating a trust (or several trusts) for the benefit of your client’s children is a good way to avoid this situation. Trusts allow the grantor to appoint a trustee with the authority to manage the trust’s assets and make distributions. Since the grantor is able to choose this trustee, your client will be able to ensure that assets within the trust will not be controlled by their ex-spouse.

    Different types of trusts to consider

    All of the following trusts may play a valuable role in the estate planning process for individuals who have recently divorced: 

    Revocable living trusts

    Revocable living trusts allow grantors to arrange for the transfer of specific assets to designated beneficiaries. These trusts are commonly used to complement a will, as they allow the assets they contain to avoid the probate process. 

    Irrevocable life insurance trusts (ILIT)

    Irrevocable life insurance trusts (ILIT) allow the grantor to remove the proceeds of their life insurance policies from their taxable estate by transferring ownership of the policies to the trust. An ILIT also allows the grantor's family to pay estate costs using the life insurance proceeds from the trust.

    Credit shelter trusts

    Credit shelter trusts can allow the grantor to maximize the benefits of the estate tax exemption and are particularly useful in cases where the grantor has children from a previous marriage but also wants to ensure a new spouse’s financial security. 

    Qualified terminable interest property (QTIP) trusts

    Qualified terminable interest property (QTIP) trusts may be helpful for clients that have divorced and then remarried. The surviving spouse will receive income from the QTIP trust until their death—after which the beneficiaries are entitled to the remainder.

    Making the right estate plan revisions

    All of the above strategies may allow your clients to exercise greater control over their estates following a divorce. If you have further questions about any of these strategies and how they may be able to help your clients, contact our experienced accountants at Smolin Lupin at any time. 

    And remember—involving an estate planning attorney during the divorce process can be crucial to the long-term success of the divorce agreement. Divorce requires holistic solutions, and the right partner can help you achieve them with the best interest of you and your clients in mind.

  • 8 Nov 2022 10:36 AM | AAML NJ Administrator

    Panel discussion facilitated by Sharon L. KleinExecutive Vice President and Head of National Divorce Advisory Practice | Wilmington Trust | AAML NJ Bronze Sponsor

    In a three-part video series hosted by Family Lawyer Magazine, Sharon Klein moderated a discussion among Cary MogermanMaria Cognetti and Peter WalzerThis powerful team provides insights on notable changes in the family law arena and offers their predictions on how the future of the practice may unfold. 

    Watch the videos to learn what family law firms need to do to evolve, adapt and prosper in the future.

    Link to the videos here

    For more information, reach out to Sharon L. Klein at 212-415-0531 or sklein@wilmingtontrust.com.


  • 1 Nov 2022 10:13 AM | AAML NJ Administrator

    By Carolyn Daly, Esq. | Daly & Associates | AAML NJ 2022 - 2023 President

    You have made the decision to seek a divorce, or to at least get advice about getting a divorce. You have the names for potential lawyers, but what do you ask them?

    There are certainly more than six questions that you will want to ask, but these are a good start to help you in making a decision.

    1. Do you specialize in divorce cases and what credentials do you hold?

    When getting divorced, you want someone who has a lot of experience and hopefully specializes in divorce, particularly if you have complex custody or financial issues. You don’t want someone who is practicing in several different areas of law as they likely lack the depth of knowledge needed to handle your issues.

    You also want someone who understands divorce is emotional so that they will work with you on emotional issues. They can also probably understand the emotions occurring on the other side of the case to navigate how issues are approached with them.

    2. How will my case be handled in the office?

    In some offices, one lawyer will be the only one working on your case. However, in most offices multiple attorneys and other legal staff (e.g. paralegals) will also work on the case. You want to be comfortable with your legal team and know who is working for you. Will the lawyer you consult with be at all court appearances? Is someone else going to handle scheduling or day-to-day questions so that you aren’t billed at the highest rate? Who will be drafting and reviewing documents? You will want to understand how the office works and, if you want the lawyer you are consulting with to be the only one appearing in court, you need to say that in the consult.

    3. How do I communicate with the office and receive information on my case?

    If you retain a smaller law firm, it may be that the lawyer or one secretary is handling all communications. In other firms, there may be specific communication guidelines – you may not be able to simply “walk in” to meet your attorney, but will need to schedule an appointment, or you may need to work with a paralegal or associate to try to resolve minor issues in your case. You will want to know who you can and should e-mail, text (unlikely), have a phone call with or come in person for a meeting. You also need to remember your attorney is handling other cases, so you should know the protocol for how quickly communications are answered. Having good communication with your lawyer will keep you de-stressed and will also help you clarify and define your goals with your lawyer.

    4. How long does it take to get divorced and are there alternatives that might save time and money?

    Most people ask this question multiple times during their case, but it is very hard to answer, especially post-COVID with the very significant shortage of judges that we currently have.

    While the court’s “goal” is to have your divorce complete (including any trial, if necessary) within a year, that is definitely not the norm at present. In most counties, trials take well over two years, and some trials are paused completely. Knowing that, you will want to ask about what alternatives there are that might assist in getting the case, or certain issues, resolved sooner, such as mediation, collaborative divorce and arbitration to name a few. Find out all your options.

    5. What is your retainer amount, the hourly rates for people working on my file, billing cycle and what happens when my retainer is exhausted?

    Divorce can be very expensive so you want to understand what you need to pay to get started. And the “cheapest” lawyer may not be the best choice. You also need to know what each person working on your file charges per hour so that you can try to decide who you may need to speak to, or work with, at different stages of the case. You also want to know how often you will get bills so that you can keep track of your retainer and charges. Finally, you want to know what you will have to pay when the retainer runs out so that you can plan ahead. 

    6. Now that we have talked a little about my case, how would you approach it?

    This person is going to be representing you and working with you to get you what you hope to achieve in the case. So, you want to know that the way they would approach your case, or certain issues aligns with your goals and approach. You may want a very aggressive lawyer, or one who takes the high road, or one who can be either, when necessary. You may be willing to compromise on certain issues to achieve favorable results in others and you will want to know if the lawyer would agree to approach it the way you do, or, if not, why not? You want to gain some insight into the lawyer and what it will be like working with them so that you can decide if that is a person you want to work with for the next year or more.

    There is no right answer to any of these questions, but hopefully the answers help you make a decision on the lawyer you want to represent you as you navigate the difficult, often emotional issues in divorce. And it is why you should always consult with a lawyer before retaining them.

  • 17 Oct 2022 11:43 AM | AAML NJ Administrator

    By Jonathan Blinken | Strategies For Wealth, AAML NJ Bronze Sponsor

    Getting divorced can be a painful process. For many it can mean starting over. Unfortunately, that may include starting over financially. This can mean different things to different people - if one spouse was the primary breadwinner in a long marriage, they may be ordered to give a significant portion of their retirement plan to their spouse who focused on raising the children. This may cause concern over how they will support themselves in their twilight years. On the flip side, one spouse might have put their career on hold to raise the family and are now having trouble making ends meet, securing a job, and developing or restarting their own career. That’s why, from the moment you know you are getting a divorce, creating a viable financial plan is one of the most important things you can do. Of course, you can develop a plan and budget on your own, but it may be helpful to seek out professional advice from a financial advisor or CPA who specializes in helping people create their own financial plans, particularly in light of an impending divorce. 

    Budget Your Way To A Better Future

    One of the first things you should do, once you know you are getting divorced, is create a budget with a focus on savings and investment. Remember, without a second income, you should recalculate your needs, and the ability to meet them, and make a reasonable prediction about your monthly cash flow. This may mean a significant change in lifestyle and habits. If you frequently dine at restaurants, you may need to begin to prepare more meals at home. You might need to explore alternative vacations, or a “staycation”, rather than lavish trips. Learning to live within a new set of parameters can be challenging, but it is crucial for your future financial success after a divorce. Create a budget, and stick to it. 

    Make sure you are aware of all your debts, and work on paying those down as quickly as feasible, particularly high interest rate credit card debt. Then, whenever possible, pay yourself first! Put as much as you can into a savings account for emergencies. Try to contribute monthly to either a retirement plan or an investment account that has well diversified investments to ensure continued and measured growth consistent with your risk tolerance. One of the easiest ways to accomplish this goal is to commit to automate deposits into savings, investments, a 401(k) or permanent life insurance. This eliminates obstacles or excuses that may present itself – or the temptation to spend on the next big thing or bright, shiny object, such as the latest consumer gadget. Building up a good nest egg and emergency fund is a critical step in creating a financial plan after a divorce.

    Records And Reality

    Keep detailed and accurate records of your current spending. This will be important as alimony, or spousal support, is considered. In many states, the amount awarded is dependent on numerous factors, including the needs of both the recipient spouse and the ability of the other spouse to pay for it. Depending on your personal situation, think carefully about how best to protect yourself. It is important to recognize both ex-spouses often end up with a lower standard of living, post-divorce, than they had when married.

    When the division of real property is at issue, be realistic about what you can afford, and pick your assets carefully. Keeping the marital home is often a goal for one or both of the divorcing parties; however, the debt usually comes with it, and if you cannot feasibly afford the mortgage payments each month, you may need to walk away. Think about your short and long-term needs, and make smart decisions. 

    Don’t Make Emotional Decisions

    Try not to get caught up in the emotions. One former client was heartbroken when her marriage to her husband of 30 years ended. The husband offered to give her a generous amount of money for several years as spousal support. She put her emotional pain aside, and sat down with a calculator and her advisors. They analyzed several alternative arrangements, and determined the one that best met her future needs.

    While she was tempted by the initial offer, she negotiated for one-half of the couple’s rental property portfolio. Although she needed to pay property taxes, mortgages, maintenance, and insurance on the properties, at the end of the day this would earn her more than she would have received in spousal support, and ensured that her earnings were indefinite. You must be prepared to think long-term in your financial planning, which can often mean foregoing your initial emotional impulses.

    Be Aware Of The Tax Man

    Many of the financial decisions you make during a divorce can have tax implications. It is important to consult your accountant, or a tax attorney, to ensure that you make wise decisions. For example, it is common for one or both parties in a divorce to have significant assets in their qualified retirement plan. If a qualified retirement plan is divided in a divorce, it is important that the parties do not actually withdraw any money before age 59 1/2. Early withdrawal not only incurs penalty fees (usually 10%) but you will also be taxed at your ordinary income rate for the year that you take out the money, leaving you with significantly less than what you may need during retirement.

    No Extravagancies During Divorce 

    Whatever you do, during a divorce, do not make any major financial purchases. Most states consider anything acquired during the marriage as community property – therefore, you could be forced to repay your spouse for your spending. Additionally, many courts impose injunctions, or orders preventing parties from spending money unnecessarily. 

    Another former client purchased a boat for nearly $50,000 during the divorce and attempted to keep it a secret. He thought he could get away with it, until he parked it in front of his house for a week. His wife got suspicious and asked for his bank records, where she found a monthly payment to a well-known boat dealer. That $50,000 boat cost my client an additional $25,000 in assets, because he wanted to fulfill his dreams before he was divorced. Patience is a virtue – wait until the divorce is finalized. 

    Play By The Rules

    Always follow the court order. If you have been ordered to deliver property or execute documents to convey it, then you need to do so. If you have been ordered to pay attorney’s fees, then you must do so. Failure to follow a court order can have serious financial implications. The court can sentence the offending spouse to jail for contempt of court, which is not only embarrassing and uncomfortable, but could affect your ability to work. Your property may also be subject to a lien, meaning it is now secured by debts you owe to creditors. If you ever need to liquidate your property, the value will be diminished by the liens on top of it. 

    Invest In Yourself Post-Divorce

    After your divorce is finalized, it is a great time to invest in yourself. You are beginning a new chapter in life. Think about what that means to you, and develop concrete personal and financial goals. For some, it might mean going back to school. For others, it may mean starting a business. Maybe you have always wanted a second home to rent out and increase your income. Whatever it is, find out how much it will cost to invest in you, and determine if it’s worth the money. If it is, come up with a financial plan to start saving and go for it.  

    Divorce is hard, no matter how amicable. Setting aside emotions and thinking clearly about your financial future is the most important thing you can do for yourself, and your children. Consult with professionals who are familiar with the financial implications of divorce, develop a financial plan, and have patience in achieving it. You may be starting over, but with planning and persistence you can build a strong financial future. 

    Enjoy this article? Share it with a friend.

    GUEST AUTHOR:

                  

    Jonathan Blinken

    Financial Advisor at: Strategies For Wealth

    120 Broadway

    37th Floor

    New York, NY 10271

    Office:   212-249-9200

    Mobile: 212-960-3105

    Email: Jonathan_blinken@strategiesforwealth.com 

    Web Page: www.Blinkenfinancial.com

    https://www.linkedin.com/in/jonathanblinken

    Jonathan Blinken is a Financial Advisor at Strategies For Wealth. His mission is to educate his clients and empower them to feel more in control of their financial life and decision-making. 

    Connect: www.blinkenfinancial.com 

    Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is an indirect, wholly-owned subsidiary of Guardian. Strategies for Wealth is not an affiliate or subsidiary of PAS or Guardian. 2017-46539 Exp 9/19

  • 3 Oct 2022 1:52 PM | AAML NJ Administrator

    By Our Family Wizard, AAML NJ Bronze Sponsor

    What is birdnesting divorce?

    When birdnesting after divorce or separation, the children stay in the family home—a safe and cozy nest—and the parents take turns living with them.

    When one parent is staying with the kids, the other parent stays at another place, like a rented apartment or a family member’s house. Then they swap, and the other parent stays with the children while the parent who was with the kids before stays somewhere else.

    “A short-term nesting plan is incredibly beneficial to children at the initial stages of a divorce or separation,” explains Elle Barr, an experienced family law attorney and a court-appointed guardian ad litem, or child welfare expert and attorney for children, for nearly 20 years.

    Read the full blog post here

  • 23 Sep 2022 1:36 PM | AAML NJ Administrator

    By LEAP US, AAML NJ Silver Sponsor

    New Jersey family law firms recognize the need to adopt technology to improve productivity, revenue, and overall client satisfaction. However, the legal technology market is growing with multiple offerings that can make it challenging for matrimonial lawyers to find the right solution that will improve law firm business practices. This article is the ultimate guide to legal practice productivity software for New Jersey family law firms and will answer the following questions:

    • What is legal software?
    • What are the benefits of legal software for New Jersey family law firms?
    • What does an all-in-one solution look like?
    What is legal software?

    Legal software helps matrimonial attorneys run and manage all aspects of their family law practice. These law firm software solutions can be a single, comprehensive, and integrated system or a collection of different systems with one goal: to help attorneys manage their law firm business and client needs. For family law firms, this would include centralizing contacts, documents, emails, and more in a single electronic matter and simplifying time recording for more frequent and accurate billing and invoicing. Other functions include managing, automating, and enhancing:

    • Business development and matter creation
    • Document assembly and management
    • Time recording on billable tasks
    • Trust accounting and bank reconciliation
    • Law firm reporting
    • And more
    What are the benefits of legal software for New Jersey family law firms?

    The right legal software will improve law firm productivity, efficiency, and profitability along with several other benefits. New Jersey family law firms that take advantage of legal cloud software technology also experience reduced overhead costs, less manual day-to-day work, better legal client services, and better financial management. Not only do these benefits improve law firm employee output but they also drive higher client satisfaction which improves business development. Additionally, New Jersey family law firms can reduce their risk of malpractice and noncompliance by implementing a solution that ensures the availability of up-to-date legal forms, elimination of data errors from multiple entries, and increased profitability with streamlined timekeeping, invoicing, billing, and trust accounting.

    What does an all-in-one solution look like?

    An all-in-one legal software solution should include everything legal professionals need to run a law firm including practice management, document assembly, legal accounting, and legal publishing. LEAP legal practice productivity solution includes all four aspects to support New Jersey family law firm’s daily operations.

    Practice Management

    LEAP enables matrimonial attorneys to manage their practice whether they are in the office, in court, or on the go and with a secure connection through Amazon Web Services (AWS). Remote accessibility for matter and case management means that lawyers can onboard legal clients, access files and documents, manage legal deadlines, capture more billable time, send invoices, and receive payments from anywhere.

    Document Assembly & Management

    New Jersey family law firms using LEAP can auto-populate forms and documents, with client information and commonly used clauses, with only a few clicks. This document automation starts by pulling details from electronic matters that are then filled into the correct document fields. This eliminates redundant data entry and potential errors that arise when manually keying in information. Update the client details once and use it for all legal documents and forms.

    LawConnect integrates with LEAP so matrimonial attorneys and clients can share large files through a secure portal. Given the nature of family law matters, these extra security layers provide the needed protection to store, access, and share documents. LEAP makes it easy for matrimonial attorneys to collaborate with clients on documents and request e-signatures for filing.

    Legal Publishing

    Access to automated legal documents and matter types helps to reduce time spent on manual tasks and errors caused by duplicate data entry. LEAP offers access to legal forms and pre-built matter types for New Jersey matrimonial lawyers to eliminate hours of administrative work. The LEAP Content team ensures that all forms are up-to-date so that New Jersey firms can rest assured that they are maintaining compliance. Additionally, attorneys have access to the LEAP Clause Library to simplify and expedite the legal drafting process. Matrimonial attorneys can easily find and complete legal forms like Certificate of Insurance Coverage Pursuant to R. 5:4-f (LD-NJ-FAM-0025), Summons (Divorce) (LL-NJ-FAM-0123), Case Management Order (R. 5:5-7) (LL-NJ-FAM-0011), and Confidential Litigant Information Sheet (LD-NJ-FAM-0328). This tool helps save time and reduce potential errors from copying and pasting each clause.

    Legal Accounting

    Office and trust accounting are crucial functions to law firm success and compliance. LEAP makes it easy to generate invoices, manage retainers and trust accounts, and directly capture disbursements in the system to simplify compliance with IOLTA and New Jersey state bar rules with built-in office and trust accounting functionality. Law firm staff can use built-in time recording, legal calculators, and legal billing codes to make it easy for matrimonial lawyers to instantly capture billable time in a timesheet without starting or stopping a timer. LEAP also helps New Jersey family law firms make more invoices with customizable billing templates to create, edit, and send invoices. Additionally, Xero and QuickBooks Online integrate with LEAP to reduce redundant data entry and enable online payment options to improve client experience and get paid faster.

    Conclusion

    Legal technology is no longer optional if New Jersey family law firms want to remain competitive and experience longevity, productivity, and profitability. As the #1 legal practice productivity solution on the market, LEAP Legal Software offers all the tools matrimonial attorneys need in a single, cloud-based solution, including practice management, document management, legal publishing, and legal accounting. New Jersey legal professionals will have access to dedicated support teams, user feedback forums, and ongoing training resources to be up and running on LEAP in as little as two days. To learn more about LEAP and how it can benefit your New Jersey family law firm, schedule a demo today! 

  • 20 Sep 2022 10:59 AM | AAML NJ Administrator

    By Sharon L. Klein, Executive Vice President and Head of National Divorce Advisory Practice, Wilmington Trust, AAML Bronze Sponsor

    Remarriage that results in blended or stepfamilies can come with challenges. As part of Wilmington Trust’s monthly tip series for Family Lawyer Magazine, Sharon L. Klein leveraged the celebration of National Stepfamily Day in September to share key strategies to help blended families live in harmony. Read Sharon’s 6 Top Tips to check your clients’ estate and financial plans reflect their evolving family dynamics.

    Link to the article here

    For more information, reach out to Sharon L. Klein, Head of Wilmington Trust’s National Divorce Advisory Practice at 212-415-0531 or sklein@wilmingtontrust.com.

  • 22 Aug 2022 1:45 PM | AAML NJ Administrator

    By Jonathan Blinken | Strategies For Wealth, AAML NJ Bronze Sponsor

    Divorces are major undertakings. Dividing up jointly owned property and assets, managing custody arrangements for children, and exchanging payments of alimony or child support can all have a significant impact on your life – both emotionally and financially. You should consult a family law attorney for their expertise in divorce matters, however, it is important to recognize that they may not possess expertise regarding tax implications impacting their divorcing clients. Hiring a financial planner in addition to your legal counsel will help you properly address the tax consequences of proposed divisions of property or alimony payments.

    1. Alimony is poised to transform divorces in 2019. 

    Alimony is traditionally fraught with complications and often, resentment. State laws vary widely concerning calculations of alimony, and whether or not one of the parties is eligible. But the federal tax laws have been clear for at least 75 years, easing the pain for at least one party: the paying spouse was allowed to deduct their payments, while the receiving spouse had to account for alimony received as income. But starting Jan 1, 2019, this certainty is gone. The Tax Cuts and Jobs Act, passed in late 2017, has abolished the principle, meaning the payment of alimony is no longer deductible, and the recipient no longer has to pay taxes on it. This makes it more akin to child support payments, where the obligor cannot deduct, and the recipient is not taxed. 

    The law will apply to divorces finalized in 2019, so divorces finalized before that day will be ‘grandfathered' into the current regime. Still, most family law professionals are apprehensive. Previously, at least the paying spouse had the benefit of deducting this payment, which helped push negotiations along. Now, without any incentive, divorces might be messier, longer and ultimately, more expensive. The recipient spouse might be less able to use the alimony money in retirement accounts like IRA’s, which require payments to be made from taxed income. While there are still many questions about the full extent the tax cuts will have on alimony and divorce, a qualified financial planner can help mitigate any problems stemming from the changes in the law.

    2. Know how you will be filing your taxes during and after the divorce.

    Most people assume that if you are married for part of a year, you will have to file taxes as married. But, if your divorce is finalized in that year – even on the last day – then you are free to file taxes as a single person. Additionally, you can still file as a couple, but that often does not make sense financially. If one spouse files as head of household, for example, they might receive a boon in tax savings. But, you would have to live separate and apart at least six months, and pay more than half of the costs to the household. The other spouse would have to file single. 

    3. Understand that the division of assets carries significant tax implications

    Divorcing couples need to worry about the actual value of their debts and assets when they begin dividing up their estate. But many assets can affect the tax liability of each party. First, married couples receive a relative windfall on their principal residence if they decide to sell – up to $500,000 gain on their principal residence without incurring a tax liability. Of course, once divorced, then each party can only realize $250,000.00 in the event of a sale. If one party is awarded the property, then they might be entitled to use the mortgage interest deduction. This is only attractive if the house still has an outstanding mortgage, which might not be the case for long-term couples. 

    4. Lingering taxes after divorce

    Wealthy couples or individuals who are self-employed might have to pay estimated taxes, sometimes resulting in an overpayment of taxes owed. If a couple filed a joint tax return in previous years, and the overpayment of tax was applied to any tax owed the year of the divorce, then any overpayment is equally allocated between the spouses. Each gets to benefit from the overpayment, even if one spouse earns significantly more than the other. The same concept applies to joint tax returns filed during the marriage if taxes are still owed. However, courts do have the discretion to determine whether or not one party is assigned the existing liability during the division of property.

    5. You need to figure out which parent can claim the child’s tax dependency, or you will be subject to the default rules.  

    Only one tax return can claim each child on the dependency exemption. If the divorce decree assigns one parent as the primary custodial parent, then by default, this parent will get to use the tax dependency exemption. Generally speaking, the custodial parent is the party who has had actual possession of the child the longest. Courts will be allowed to approve agreements between the parents who might alternate which parent claims tax dependencies each year. For families with multiple children, some parents might agree, for example, that each parent can claim one child in a family with two children. By claiming the dependency exemption, parents stand to benefit from other benefits, like the child tax credit or various education credits. If you have questions about the implications of a divorce on child tax dependencies, it is best to seek out a qualified financial planner in addition to your family lawyer.

    6. Retirement accounts have some of the biggest tax penalties if handled wrong. 

    For long-term marriages, retirement accounts are often the largest assets to be divided up. If done inappropriately, it can carry a tax penalty as well as an early withdrawal penalty, decimating the account. Therefore, for many retirement accounts, like 401(k)’s, if the parties choose to divide the funds, they must be done through a qualified domestic relations order (or QDRO). These essentially allow one party to ‘roll over’ their retirement savings to another without the IRS treating it as a taxable distribution. 

    If you are in the middle of a divorce, you should seek out expert guidance for every aspect – both legal and financial. Contact a qualified financial planner who can give you comprehensive and competent guidance through the many tax issues associated with a marriage dissolution.  

    Jonathan Blinken is a Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is an indirect, wholly-owned subsidiary of Guardian. Strategies for Wealth is not an affiliate or subsidiary of PAS or Guardian.Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation. 2018-59852 Exp. 5/20.


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