At times, a court must delicately balance the best interests of the children and their parents with contract rights, religious matters, ethical and social values, and constitutional principles and individual rights. That balance is remarkably reflected in the August 16, 2017 decision in Weisberger v. Weisberger, of the Appellate Division, Second Department. There, the Court concluded:

Courts do not always have the perfect solution for all of the complexities and contradictions that life may bring — the parties must forge a way forward as parents despite their differences.

The Weisbergers were married in 2002. In 2005, the mother told the father that she could not tolerate having sexual relations with men, and that she was sexually attracted to women. The parties were divorced in 2009. The judgment incorporated a stipulation of settlement under which the parties agreed to joint legal custody of the two daughters and one son of the marriage, with the mother having primary residential custody. The father would be with the children for a two-hour period once per week after school (to be increased to twice per week for the son when he turned eight years old, for the purpose of religious study). The father would also have overnight visitation every other Friday after school until Saturday evening for the observance of the Sabbath; for two consecutive weeks every summer; and an alternating schedule for holidays.

Central to the issues raised on appeal, the stipulation contained the following religious upbringing clause:

“Parties agree to give the children a Hasidic upbringing in all details, in home or outside of home, compatible with that of their families. Father shall decide which school the children attend. Mother to insure that the children arrive in school in a timely manner and have all their needs provided.”

In 2012, more than three years after the divorce, at which time the children were nine, seven (the son), and five years old, respectively, the father moved (1) for sole legal and residential custody of the children, as well as final decision-making authority over medical and dental issues, and issues of mental health; (2) limiting the mother to supervised therapeutic visitation with the children; and (3) to enforce the religious upbringing clause so as to require the mother to direct the children to practice full religious observance in accordance with the Jewish Hasidic practices of ultra Orthodoxy at all times and to require the mother, herself, to practice full religious observance in accordance with the Hasidic practices of ultra Orthodoxy.

Continue Reading Balancing the Best Interests of Children with Religious, Contract, and Individual Rights

In its July 5, 2017 decision in Decillis v. Decillis, the Appellate Division, Second Department, recognized, but significantly reduced a credit against a formula child support obligation for the father’s extraordinary visitation travel expenses.

The parties were the parents of a child born in 2003. The mother filed a petition for child support. After imputing annual income of $43,000 to the mother, Suffolk County Family Court Support Magistrate Kathryn L. Coward determined that the father’s formula basic child support obligation would be $572 biweekly (grosses up to income of $94,729 per year). However, after gaving the father a $168 biweekly credit to compensate him for the “extraordinary” expenses associated with visitation, the Magistrate directed him to pay child support in the sum of $404 biweekly.

The Second Department first found that the Support Magistrate properly imputed $43,000 of income to the mother based upon her prior income, her choice to engage in only part-time employment, and her current living arrangement, in which she did not pay rent or related housing expenses.

However, the appellate court found that the Support Magistrate improvidently exercised its discretion in awarding the father a $168 credit against his child support obligation $168 for the “extraordinary” expenses associated with visitation, including $67 for travel expenses.

Continue Reading Travel Expenses Credit Against Child Support Reduced on Appeal

If you were fortunate enough to buy stock in Apple Inc. in early 2009, you might have paid $13 per share. It’s now worth $150.

If you’re getting a divorce holding Apple shares with a substantially lower-than-market cost basis, you must plan your trial evidence or settlement to deal with the embedded capital gains tax exposure. In the example above, the gain would be $137 per share. When sold, under current tax laws, a capital gains tax of perhaps tens of thousands of dollars or more could be incurred.

If you settle this issue, you may negotiate the impact of capital gains on the spouse retaining the shares. It will always be easier, fairer, to simply divide the shares, but care must be taken to divide it “traunch” by traunch; to divide each group of shares purchased at any one time. In that way, the spouses will be assured that not only will today’s fair market value be the same, but so will the embedded capital gains issue.

If you don’t settle, the issue will be far more difficult. The court may not recognize nor account for the potential tax liability incurred if and when the stock as sold. The transfer from one spouse to the other incident to the divorce itself is not viewed as a taxable event. Even if the court computes the transfer using the current fair market value, the transferring spouse reports no capital gains; the recipient spouse keeps the original cost basis. If and when the recipient sells the shares, the recipient will bear the entirety of the capital gains tax, computed on the gain over the original cost basis.

Continue Reading Considering Potential Capital Gains Tax Liabilities in Divorce

In a recent decision of the Appellate Division, Fourth Department, in Holeck v. Beyel, 145 A.D.3d 1600, 43 N.Y.S.2d 816, the court upheld a direction to a disabled father (the non-custodial parent) to apply to the Social Security Administration to change representative payee of the children’s social security disability (SSD) benefits from the father to the custodial mother. The appellate court also upheld the denial of the father’s request for a reduction in his support obligation by virtue of his loss of the SSD benefits for the children.

Generally, when a disabled parent is qualified for Social Security disability benefits, the children may also qualify to receive benefits on the disabled parent’s work-record. Eligible children can be a biological, adopted or stepchildren. Normally, benefits stop when the child reaches age 18 unless they are disabled. However, if the child at age 18 is still a full-time student at a secondary (or elementary) school, benefits will continue until the child graduates or until two months after the child becomes age 19, whichever is first.

Continue Reading Child Support and Social Security Disability Payments Received for the Children’s Benefit

It appears that the tremendous burden placed on the Appellate Division, Second Department, to work through its caseload has often led to opinions which leave you wanting to know a little more of the facts so you can put the case into perspective.

Take the the Second Department’s May 31, 2017 decision in Fiore v. Fiore, where the lower court’s opinion was modified to increase a father’s college obligation and which determined summer camp to be the equivalent of child care.

After nine years of marriage and one child, the parties settled their divorce action by an amended agreement that was incorporated into their 2000 Judgment of Divorce. Included among the settlement’s provisions were that the father would pay $12,289 annually for basic child support; that the parents would each pay their pro rata share of unreimbursed medical expenses; and that the father would pay 58% of the cost of day care.

In 2014, the mother moved for upward modification of basic child support, and other child support-related relief, including contribution toward the child’s summer camp and college expenses. Supreme Court, Nassau County Justice Julianne T. Capetola denied the upward modification, denied summer camp expenses, and limited the father’s obligation to pay college expenses to $5,000 per semester.

On appeal, the Second Department upheld the denial of an increase in the basic child support obligation. The mother had failed to meet her burden of proving that there had been a substantial, unanticipated, and unreasonable change in circumstances resulting in a concomitant need, or that the settlement was not fair and equitable when entered into. This was the required burden as the amended stipulation of settlement was entered prior to the effective date of the 2010 amendments to Domestic Relations Law §236(B)(9)(b)(2), when the burden was lessened.

Continue Reading Appellate Court Increases College and Child Care Expense Obligations

Whether by agreement or court decree, it is common for divorced parents to be obligated to contributed to their child’s college education tuition, room and board expenses. How is that obligation computed when a child receives financial aid?

Cases have held that scholarships, grants and aid for which the student has no repayment responsibility are to be subtracted before computing the parents’ obligations. First, the total cost of attending college should be calculated. Next, a court should determine the percentage of that total cost which is covered by financial aid. That percentage is applied to the separate tuition and room and board portions of the total expense. Finally, the parents’ shares of each portion, after deducting the pro rata financial aid, is to be calculated based upon each parent’s share of of responsibility.

For example, if tuition is $12,000 and room and board is $8,000, totaling $20,000, and financial aid is $15,000, or 75% of the total college cost, the net tuition after pro rata financial aid would be $3,000. The father’s pro rata tuition obligation should then be applied to that amount to determine his contribution to tuition. Matter of Yorke v. Yorke (2011).

The question remains what forms of financial aid get subtracted. In Yorke, the Appellate Division, Second Department, held that Stafford loans should not have been subtracted. Stafford loans (Direct Subsidized Loans) are federal student loans borrowed through the Direct Loans program that offer undergraduate students a low, fixed interest rate and flexible repayment terms.

In determining the parents’ respective obligations towards the cost of college, a court should not take into account any college loans for which the student is responsible. Therefore, any loans for which the child is responsible should not have been deducted from the college costs prior to determining the father’s pro rata share of those costs. As held in the Second Department’s decision in Matter of Rashidi v. Rashidi, (2013):

A parent’s share of college expenses for a child should be based on the total cost of tuition, room and board, college fees, and books and miscellaneous expenses as estimated by the university attended by the child, less only the sum of all nonrepayable scholarships, grants, and work-study payments or credits.

In its June 7, 2017 decision in Mons Pinto v. Pinto, the Second Department made the waters a little murkier when holding that Supreme Court, Westchester County Justice Janet C. Malone correctly determined a parent’s share of the children’s college expenses, as well as the credit towards his basic child support obligation to which he was entitled, based on “the total aggregate cost of tuition and room and board, less the sum of scholarships, grants, and federal subsidized loans.”

The appellate court did not indicate whether the issue of student loans was, in fact, involved in the case. However, the language used by the court appears to be a departure from prior decisions.

Annette G. Hasapidis, of South Salem, NY, represented the father. Lawrence B. LaRaus, Buonamici & LaRaus, LLP, of White Plains, represented the mother.

The words Welcome Home written on a old brown diary paperThe divorced couple’s child moved out of the mother’s home when he was 18, established his own residence, and began paying for all of his own expenses. Thereafter, the father’s petition to terminate his support obligations was granted.

In September 2013, the child returned to the mother’s home. The mother sought to reinstate and modify the father’s support obligation, alleging that the child’s returning home constituted a change of circumstances.

After a hearing, Richmond County Family Court Support Magistrate Janele Hyer-Spencer determined that the child’s unemancipated status had been revived. The Magistrate calculated the father’s child support obligation based upon an imputed income of $103,310, awarding arrears totaling $29,752.92.

The father filed objections that were denied by Family Court Judge Arnold Lim. The father appealed.

In its June 14, 2017 decision in Monti v. DiBedendetto, the Appellate Division, Second Department held that the Support Magistrate had properly determined that the child was no longer emancipated.

Emancipation of the child suspends a parent’s support obligations. Children of employable age are emancipated if they become economically independent of their parents through employment, and are self-supporting. A child’s unemancipated status may be revived provided there has been a sufficient change in circumstances to warrant the corresponding change in status.

Here, the record supported the Support Magistrate’s conclusion that the child was no longer economically, nor constructively emancipated. The evidence demonstrated that the child, who was enrolled in and attending college, voluntarily returned to the mother’s home in or around September 2013. Although the child was employed part-time and received an annual sum of $30,000 from a personal injury settlement, the evidence also demonstrated that the child was saving that money for future use and was not utilizing any of that money toward his own living expenses. The mother paid for all of the household expenses and food, as well as for the child’s car insurance, cell phone service, clothing, and personal items.

As a result, reinstatement of the father’s support obligation was proper.

Matthew S. Zuntag, of Staten Island, represented the father. Pamela Seider Dolgow and Elizabeth I. Freedman of the office of Zachary W. Carter, New York City Corporation Counsel, represented the mother.

Keep a secret

The failure of a spouse to disclose a material change in facts that occurred during settlement negotiations may result in an invalidation of the related settlement provisions.

So held the he Appellate Division, Third Department in its May 11, 2017 decision in Flikweert v. Berger, invalidating one paragraph of a divorce settlement separation agreement and remanding the matter to address the appropriate equitable distribution of the funds in issue.

The parties were married in 1997 and had one child. In June 2014, the wife commenced this action for a divorce. After extensive negotiations, the parties executed a separation agreement on September 15, 2015 that addressed issues including equitable distribution, child support, custody and spousal maintenance.

Paragraph 21 of the separation agreement concerned the wife’s ownership interest in her employer, a privately held company. The wife began employment with the company in February 2012. In August 2013, the wife was awarded unvested equity incentive units by the employer. By September 2015, half of the units were vested.

Continue Reading Keeping Secrets During Divorce Action Partially Invalidates Settlement

Egyptian MarriageWhat happens when cultural and religious traditions clash with the presumptions underlying New York’s Equitable Distribution Law, negating the concept that a marriage is an economic partnership? To what extent should those traditions impact New York Law affecting long-term marriages?

In the March, 2017 case, Yehia v. Goma, the parties had been married in 1977 in Egypt in both civil and religious ceremonies, and resided in New York since 1992, (although the wife returned to Egypt between 2008 until 2011). They had three adult children.

During the trial, the parties entered into two stipulations: one resolving the isues of properties held in Egypt; the second addressing the division of the sale proceeds of the marital residence in New York, and the wife’s claim for counsel fees. As a result of the two stipulations, the issues left open for decision included equitable distribution of pension and 401(k) Plan assets, maintenance, and credits against Equitable Distribution.

Westchester County Supreme Court Justice Victor G. Grossman recognized that a significant issue affecting the claims of credits arises from how the parties managed their economic spheres during the marriage. He noted that the parties both remained Egyptian citizens and had led a devout life and marriage in accordance with Islamic Law. Both parties’ actions had been consistent with their religious and/or cultural traditions.

Continue Reading Should Religious and Cultural Traditions Impact Equitable Distribution?

1% sale high resolution renderingDivorce cases are supposed to have an ever-increasing set of rules. Last week’s decision of the Appellate Division, First Department, in Campbell v. Cambell demonstrates that while a judge must follow the rules, the judge still has many tools to accomplish an equitable result. Perhaps the most powerful is discretion.

In Campbell, the parties were married in 1973. After living together as husband and wife for only 52 months, the husband vacated the marital residence in 1978. The parties’ minor son remained with the wife. For the next 37 years, the parties lived separate and apart, the husband providing no economic or non-economic support to the wife and child.

In 2011, the wife retired from her job at Lincoln Hospital, where she began working in 1973, the same year as the marriage. She is now collecting $4,241.95 per month in pension benefits.

In 2013, the wife commenced this action for divorce. The wife’s pension was the parties’ primary marital asset. Supreme Court, Bronx County Justice Doris M. Gonzalez awarded the husband 50% of that portion of the wife’s pension that was accumulated during the 52 months the parties lived together. The husband appealed.

Continue Reading Husband Who Left Wife and Child Awarded 1% of Wife’s Pension