NJ Divorce Lawyer Blog

Common Ways Spouses Hide Assets During a Divorce ( Ouch!)

No one wants to believe that their spouse is capable of something as sneaky, unethical, and potentially illegal as hiding assets, which are or which could be divided in a divorce…. But some actually do exactly that. Here are several of the most common tactics used:

Stashing Cash in a safe deposit box or in a safe in the office.

When a spouse has access to large sums of cash and is likely to hide it, it’s most likely going to end up in a safe in his personal office  or in a safety deposit box at the bank where his  business account[s] are located or in a safety deposit box near the home, office or the paramour’s home. Even though some people will hide cash, they tend to select a place that is convenient for them to get to it in an emergency or convenient for then to off and pick up, if cash is needed on an emergency basis. Consider having counsel serve subpoena’s upon those institutions as part of the discovery process to determine if there are any safety deposit boxes at any of those institutions.

Transfer Stock, bank and brokerage accounts into the names of family members, business partners, or D/B/A companies

Look back at the last 3-5 years of tax returns to determine where accounts were held and in the divorce discovery process, make sure that the lawyer gets the account records for each of those accounts to trace the monies in each account through to the present. If an account was reflected on the personal tax return 3 years ago and no longer shows up on the current return or the interest or dividend income is materially less than previously reported, track the account statements backwards to see if monies were moved from the account elsewhere. If moved, get the underlying record from the new institution to see where it was moved to and whether it was disclosed by the other party in the financial disclosure documents.

Custodial Accounts or Accounts in the children’s name.

Setting up accounts, using the children’s social security number to make the account hard to find or to create the appearance that the funds belong to the children and are not marital monies to be divided in the divorce. Check to see when the account was established and where the funds came from. If the funds were transferred into the child’s name at or around the time of the divorce filing, a court may have the right to view the transfer as improper and pull those funds back into the marital pot, especially if the other spouse was unaware of the transfer of marital monies into that account.

Overpay the IRS for future tax payments.

The IRS will gladly accept the over-payment of taxes but sometimes that over-payment of taxes when a divorce is pending may be to ensure that those funds are not available for use in the divorce or not available for division purposes.

Under Report Income on tax returns & financial statements.

If it’s not showing up as income, then it will not be used to determine total compensation for support and asset division purposes. Believe it or not, some people will file false tax returns with the applicable taxing authorities and provide those false returns to the other side in the divorce or post-divorce matter…. And then, immediately thereafter file “amended” tax filings to correct the errors in their returns. But by not inquiring as to the whether any amended tax filings took place, a spouse can be relying on incorrect financial information by the other side. Always consider requiring the other spouse ( where the parties are filing separate tax returns ) to sign an authorization in favor of the taxing authorities so that a determination can be made as to whether there were any amended returns filed and whether the amended returns materially alter the financial information provided to you.

Create Phony Debt with family members & friends.

Whenever there is a claim of a “debt” owed to a parent, sibling, business partner or friend, ask to see the underlying account records from that person to see the money leave their account and trace it into your spouse’s account / joint account, to ensure that loan truly occurred or was provided for the purpose claimed ( ie payment of a specific tax liability to the federal government for that parties 2016 tax deficit). Also, too many times, a parent will make a “gift” to the marriage and now that the parties are getting divorced, the spouse wants to view that money as a “loan” with an obligation for repayment. The fact that the spouse now wants to view it as a loan, does not make it a loan and there are telltale signs of whether it was a loan or a gift to look for. Was there a writing at the time that the money was provided, confirming the loan nature of the transaction? Did you sign that documents? What were the repayment terms and if so, were those terms honored and have payments been made back?

Deferral of Salary, Delay in implementing New Contracts, and Holding back receipt of  Commission income until a future date.

Believe it or not, some people will ask their bosses or partners to hold back payment of their commission income and bonus monies into the 1st quarter of the following year to create the appearance of generating less monies in the prior year. As a result, it is important to look at movies received in the 1st quarter of the following year to determine if those funds were generated as a result of work performed the prior year or relate to work performed in the new year. If the money paid in the 1st quarter was for work performed in the prior year, match up the same time frame for the earlier year to see if he did the same thing (deferring payment into the new year) or whether this was a “one time” deferral. The same is applicable for “new contracts” and whether they are delayed to create the appearance of a lower income setting or whether it is a ongoing type practice. Lower revenue for a business is relevant to its valuation and relevant to the issue of alimony and child support.

Business or Personal purchases out of the ordinary course.

This is where a business reflects an expense that appears legitimate but is simply a way for the owner to hide assets. A common example, is the dentist, whose books reflect the purchase of a quantity of gold or silver. Yet, a closer examination of the records for those purchases shows that a portion of the purchase was for investment gold and silver instead of gold or silver used for filing cavities. Sometimes also when a party offers to provide his quick book records instead of his actual bank and brokerage account statements, a reason maybe that one or more of the entries are not truthful. Yes, believe it or not, sometimes entries for landscaping expenses ( as an example)  when matched up against the actual underlying canceled checks might show that a 7,500 landscape bill was actually a purchase of a gift for a paramour that the party was trying to hide.



10 Signs You May be Heading for a Divorce


Wedding Fury Couple Yelling, Relationship Difficulties: Wedding couple relationship difficulties. Angry woman man yelling at each other. Portrait fury bride groom. Face to face.RED FLAG #10: If your spouse no longer wants to have sex with you, you may be heading for divorce.
While there are a million reasons why parties may be tired by the time they hit the bed, sex is an integral part of a healthy marriage.
It provides a way to connect with your spouse on an emotional as well as physical level. Sex is good exercise and promotes healthy well-being.
If your spouse no longer shows sexual interest in you, it is imperative to try to find out why and work on the issues. Often lack of sex leads one spouse to resent the other spouse over time.
While having young children and being working parents are not the best combination for a healthy sex life, sexual contact is critical to a healthy marriage and parties need to talk and work at finding time for intimacy.
RED FLAG #9: If you spouse has gained or lost more than 20% of his or her body weight, you may be heading for divorce.
In every marriage, part of keeping the passion alive is maintaining the physical presence that attracted the two partners to the other in the first place.
When one spouse no longer cares about his or her appearance or radically changes his/her physical appearance, that physical change can be a sign that he/she no longer is interested in you.
RED FLAG #8: If your spouse is donning a whole new wardrobe or sexy new underwear all of a sudden, you may be heading for divorce.
If your spouse makes a drastic change in his or her underclothes or clothing style, you have to wonder why. This is one of the all-time biggest signs of an early stage of an affair where your partner is dressing for someone else.
RED FLAG #7: If your spouse is no longer interested in helping out around the house or with family type chores without any sense of guilt or remorse, you may be heading for divorce.
Being married is not a time for laziness. Each partner needs to respect the relationship and do his or her part to share in the household chores. Failure to recognize this responsibility can create resentment by the other spouse and can also be a sign of disconnect.
RED FLAG #6: If your spouse is secretive with his or her cell phone and his/her text messaging or is now locking his or her cell phone, you may be heading for divorce.
In today’s society, it is very easy for an individual to maintain one persona to his or her spouse and another personality type to others, especially through text messaging. Cell phones and computers make that “dual life” easier and can become intoxicating to those participants. Cell phone texting tends to be where the flirting begins.
RED FLAG #5: If your spouse makes you write down everything you spend money on, you may be heading for divorce.
This is a classic sign of a controlling and emotionally abusive spouse. Control is never a healthy weapon in marriage and leads to significant self esteem issues. This issue though is more complicated and needs some real examination. On the one hand, you have a potentially unhealthy “control” issue taking place and on the other hand, you potentially have a spouse who is unhappy with the marriage and seeking to replace that sense of love / connection with possessions in an effort to make him / her feel better.
RED FLAG #4: If your spouse is regularly on Facebook with an “old friend” of the opposite sex, you may be heading for a divorce.
While occasional (rare) contact with a former love interest from the past should not pose any real danger to your relationship, the contact becomes a problem when this communication is substituted for communication with the spouse and/or if this communication is hidden from the other spouse.
RED FLAG #3: If your spouse spends more time on the tennis courts or at softball than spending time with you, you may be heading for divorce. It is very easy for a married person to find him or herself absorbed in the activities of everyday life. In order for a marriage to have a chance at succeeding over time, each spouse has to put the marriage first. Making time on a daily basis to connect with your partner is an absolute must. If you spend more time focusing on other people or other activities, then your marriage is bound to suffer.
RED FLAG #2: If your spouse is out with friends at singles bars after work and you are not invited to participate, you may be heading for divorce. The ‘singles scene’ should have a danger sign posted at every corner bar. If your spouse is constantly going to singles bars without you or is always meeting up with a “friend” at the bar, one has to wonder if he or she divulges their true marital status to the other singles out there and whether he/she is attempting to lead a double life.
RED FLAG #1: If your spouse is constantly flirting with friends / acquaintances of the opposite sex while the two of you are together, you are heading for a divorce.
When the marriage gets to the point where one spouse acts so disrespectful to openly flirt with others in your presence or knowing that you are nearby, it is never a good sign. If anything, it is a sign that he/she is looking for positive feedback from your friend so as to embark on his/her next affair.

Residential Custody awarded to 3 parents in New Jersey Court Ruling

couple fighting

A New Jersey family court judge recently awarded residential custody  to three people—the biological father( Darren), his same-sex spouse( Sam), and the biological mother ( Kitty).

After 19 days of trial, Ocean County Superior Court Judge Stephanie Wauters issued a 67 page decision addressing a unique custody setting involving three people who believed that they were creating a new family paradigm, a tri-parenting relationship where the child was the offspring of a man in a same-sex marriage (Darren & Sam) and a woman (Kitty) who had  been a long time friend to both men, with the intent that all 3 would remain actively involved in raising their child together.

The three began discussing parenthood in 2006, and ultimately—with the help of an ovulation monitor and a turkey baster, conceived, resulting in the birth of a girl in 2009.

After her birth, the child split her time equally between Kitty’s home in Point Pleasant Beach and the Darren & Sam’s home in Manhattan.

All was well until Kitty  met a man with whom she fell in love and she then wanted to move to California to be with him and wanted to take their daughter with her to live.

Darren & Sam objected  to Kitty’s plan to relocate to California with their child and they then filed a complaint with the NJ Court System seeking custody.

After 19 days of trial, the court entered an order awarding all three parents “joint residential custody” of the girl, finding that arrangement to be in the child’s best interests, with the child to spend roughly equal  time with Kitty  in her Point Pleasant Beach home (in NJ) and with Darren & Sam in their Princeton NJ home. The decision thereby precluded Kitty from relocating to California with the child.

In filing the custody complaint, the court noted that Sam also wanted the court to view him as a “legal parent” equal to Darren and Kitty,  but the court held that same was not permissible under the state’s statutory laws. Instead, the court ruled that Sam would be considered  a “psychological parent” to the child with Darren and Kitty sharing legal custody of her, with neither designated as the primary custodial parent.

In rendering her decision, the court also opined that it could not apply the child support guidelines in this matter; instead ruling that all three should share equally the significant costs of raising this child.

Termination of Alimony based on “Cohabitation” under NJ’s “new” Alimony Reform Act – a balancing act between dating and cohabitating for alimony termination purposes.

parents arguingA Superior Court Judge in Morristown must decide that issue in the case of a Mendham Township man who is seeking to terminate his alimony obligation to his former wife. She lives in a separate house in Mendham Township and has a boyfriend, who she says lives elsewhere. Her ex-husband insists they are, in effect, cohabitating as defined under New Jersey’s new Alimony Reform Act.

William and Yvonne Kloehn, both now in their 50s, were divorced in 2007 after 22 years of marriage and he has been paying alimony to her ever since.
Following the enactment of New Jersey’s Alimony Reform Act, William Kloehn has been pressing his battle to terminate alimony, because his ex-wife has a boyfriend and he believes that their relationship constitutes a “cohabitation style relationship” under NJ’s new law and therefore he should no longer have to pay alimony.

Yvonne, says the pair have been dating regularly since 2008 and see each other about three times a week but maintain separate residences and don’t share household chores or finances, so she is not engaged in a cohabitation style relationship and should continue to receive her alimony.

Under the new Alimony Reform Act, the definition of “cohabitation” has been expanded and proof of a cohabitation style relationship include:
1. intertwined finances; which includes payment of expenses by the wife for the benefit of the boyfriend or the payment of expenses by the boyfriend for the benefit of the wife or a combination of both;
2. sharing of living expenses; which reduces the expenses being incurred by the wife and making her less financially dependent on the former husbands support payments;
3. sharing of household chores, which reflect further evidence of a “marital style” relationship;
4. Recognition of the relationship in the couple’s family and social circles. Again, if a couple hold themselves out to the world as if they are married and engaged in a marital style setting, evidence of “cohabitation”; and
5. If the above elements are present, even if the wife and her boyfriend are not living together full time, under the new law, the court can now find that they are still engaged in a cohabitation stype relationship and modify or terminate the alimony obligation.

In the matter pending in Morris County, the former husband claims that his former wife and her boyfriend have held themselves out to the world as a marital type couple and he has produced a public Internet post in which Yvonne Kloehn and her boyfriend announced they had joined the Park Avenue Club in Florham Park together, as a couple, The former husband also claims that photos, emails, text messages and shared vacations further support a claim of “cohabitation” under the new Act.

Wife’s boyfriend has also filed certified statements with the court claiming that he lives with his disabled brother in a separate residence and prefers having his “own space,” and is not engaged in a cohabitation relationship with Wife. And the former wife has filed certifications with the court also stating that she owns her own house, pays all of her own bills and similarly is not engaged in a cohabitation setting.

The lines are clearly drawn and the court is faced with a setting where the former wife says that she is simply dating and that her boyfriend sleeps over on occasion. The former husband says that the relationship is significantly greater and even though they are not living together full time, they are cohabitating under the new statutory definition and his support obligation should end.

What Not to Do in a Custody Battle in the New Jersey Family Court

divorcing couple IV
Unfortunately, it happens. Sometimes parents are unable to agree upon where their children should primarily reside (or which parent their children should live with) when they have separated or have filed for divorce. Sometimes, both sides feel that their children should primarily reside with themselves and that they are the “better” parent. When there is no agreement and the issue of custody/parenting time cannot be settled, litigation ensues. Custody litigation is an emotional process for all involved. How could it not be? It involves your children. But custody litigation is a complicated process. As a matrimonial attorney, I have handled many custody matters and have witnessed other litigants unknowingly make critical mistakes that affect the outcome of their cases. This is my attempt to help those on what NOT to do in a custody battle:

a) DON’T REPRESENT YOURSELF: It is indisputable that custody litigation is complex and costly. Some litigants opt to represent themselves to save money or because they believe they cannot afford an attorney. Self-representation can have disastrous results, especially in a custody battle. There are too many legal nuances that you will not know. You may think you are able to effectively represent yourself, but I strongly recommend that you retain counsel, preferably counsel who has significant experience in trying (and settling) custody matters. You are too emotionally involved and you will not know the procedural or substantive legal issues that are intertwined in every custody matter.

b) DON’T LIE: I have seen parents embellish facts and sometimes lie outright in an attempt to bolster their positions in a custody matter. It always backfires. My advice is simple: Do not lie to the Court. Do not lie to the custody expert. Do not lie to your attorney. If your lie is discovered (and it usually is), your credibility will be forever impacted. You may not be able to repair your credibility in the eyes of the Court. The judge will remember the fabrication, and you better believe the opposing party’s attorney will remind the Court too. Similarly, do not lie to yourself. Are you seeking custody for the wrong reasons? What do you truly believe is in your child’s best interest? Be honest.

c) DON’T VIOLATE ORDERS: The judge always remembers the litigant who violates their order. If the judge is the ultimate trier of your matter, why plant any bad or negative seeds about you or your conduct with them? Do not engage in self-help. Breaching the terms of a binding and enforceable order will only reflect poorly upon you, and the judge will take this into consideration.

d) DON’T KEEP SILENT: If you do not understand the process, ask questions. It sounds simple enough but I often find litigants keep to themselves when they shouldn’t. They bottle up their emotions, become riddled with unnecessary anxiety or let themselves wallow in stress. Instead, they should be talking it out and asking the appropriate questions can help them resolve those concerns. As I always say to my clients, your children need healthy parents, and that includes mentally healthy. Do not be scared to ask questions. You are entitled to answers.

e) DON’T COACH YOUR CHILDREN: .Custody evaluations with forensic experts are commonplace in a custody battle. Each party will have an opportunity to meet with the custody expert to provide their insight and their opinion as to their family dynamic and the reasons for why they find themselves in that position. Children are involved in this process at this point, and often meet with the expert alone, and sometimes with each parent in the presence of the expert. In many states, the Court might also interview the children. I have seen litigants try to prepare their children for either the Court interview or the appointment with the expert. It is one thing to explain to a child that they are going to meet with the expert so they are aware of what to expect and are not scared. But I have seen the opposite extreme: when a parent attempts to fill the child’s head with talking points, including prompting them to speak about all the “bad things mommy (or daddy) did.” Firstly, a litigant should never speak poorly or disparage the other parent to their child. This has a negative consequence for the child. Furthermore, coaching a child on what to say to an expert is obvious and transparent. An expert (and eventually, the Court) will know when a child has been told what to say. Do not do it.

By Ashley Tate Cooper – Family Law Attorney

Issuance of a Domestic Violence Final Restraining Order under New Jersey Law

Fotosearch_px272001[1]Under NJ family law, the issuance of a Domestic Violence Final Restraining Order does not require physical violence nor even the threat of physical violence.

In NJ, there are 14 separate criminal type actions that can give rise to the filing of a domestic violence complaint. Of those 14 actions, “Harassment” is the most commonly used basis for a family part judge  to issue a Domestic Violence Restraining Order.

And, in the family law context, under N.J.S.A. 2C:33-4, a party commits an act of “harassment” (upon the other party) if he or she does any one of the following:
A. With the purpose to harass another, makes or causes to be made a communication or communications in offensively coarse language, or at extremely inconvenient hours or anonymously, or any other manner likely to cause alarm and annoyance:
B. With the purpose to harass, strikes, kicks, shoves or commits other offensive touching, or threatens to do so; or
C. With the purpose to harass another, engages in any other course of alarming conduct or of repeatedly committed acts with the purpose to alarm or seriously annoy such other party.

In a recent unreported decision, the NJ Appellate Division affirmed a trial court’s entry of a final restraining order in favor of the husband and against the wife, based on a claim of harassment because of her excessive texting /telephone calls to her former husband and her threats to harm his career.

According to the trial testimony, in one day, wife made 72 phone calls to husband’s home phone between 8:00 p.m. and 11:08 p.m.; called his cell phone 30 times after 8 pm and sent him numerous text messages that afternoon.

Husband also testified that wife had a history of yelling and screaming at him and being out of control in her communications with him. Husband claimed that all of those actions by wife were intentional and designed to harass him. Critical to husband’s application for a restraining order was his belief that his former wife’s actions were intentional and designed to seriously alarm him and that her actions were unreasonable.

The trial judge found husband’s testimony credible and that  the former wife’s actions (above) were intentional and designed to harass the former husband. Therefore, the trial judge issued a permanent order of protection in favor of the husband barring all future contact and communications by the wife and imposing restraints on the wife’s future contact with her former husband  (and imposing restrictions on her contact with the parties children, all of whom lived with the husband).

After the trial court ruled against wife and entered a domestic violence final restraining order against her, the wife realized the consequence of the court’s actions and asked the court (for the first time) to permit her to get a lawyer. Unfortunately, by that point, she and her  former husband had already testified and the court ruled that her request was too late. The appellate court agreed.