The Importance of Accurately Reporting your Income and Financial Status in Divorce
Docket No. A-3315-18T3
Decided June 9, 2020
Submitted by New Jersey Divorce Law Firm, Hark and Hark.
In a recent unpublished decision the Appellate Division reviewed a trial judge decision to force defendant to pay part of her child’s college expenses, reduce the child support she was receiving, and make her pay $10,000 of plaintiff’s attorney’s fees, despite defendant earning only $71,000 and plaintiff earning $500,000.
In Troncoso, the parties divorced in 2009 following a nearly fourteen-year marriage. Pursuant to the parties’ Matrimonial Settlement Agreement (MSA), plaintiff paid defendant $2166 per month in child support from January 2009 to January 2011, based on an agreed upon gross income of $500,000 for plaintiff and no earned income for defendant. Thereafter, in accordance with the MSA, plaintiff agreed to pay defendant $3000 per month in child support from 2011 to 2016. This sum was based on plaintiff’s gross income of $500,000, and an agreed upon imputed income for defendant of $45,000. The MSA stipulated the parties could apply to modify child support after January 2011 based upon a substantial change in circumstances.
The MSA further provided for the parties to pay their children’s post-secondary education expenses relative to respective incomes and pursuant to Child Support Guidelines. Such payments shall include all necessary charges for application fees, pre-admission standardized tests, tuition, room, board, activity fees, lab fees, books and supplies, transportation, etc., as governed by the factors as set forth in Newburgh v. Arrigo, 88 N.J. 529 (1982).
The parties’ son enrolled at Rutgers University beginning in Fall 2017, and in September 2017 plaintiff moved to enforce the college contribution provision of the MSA and modify child support due to the son’s residence on campus. Defendant cross-moved to deny the motion and compel plaintiff to pay the college expenses in full and continue paying her $3000 per month in child support. Alternatively, defendant sought an increase in child support if the court determined both parties were to contribute to college, arguing the parties’ son would be home 177 days during the school year.
The trial judge conducted a three day plenary hearing, and ordered the parties to pay their respective share of college expenses according to income, reduced child support, and for defendant to pay $10,000 towards plaintiff’s counsel fees. The Judge reasoned that defendant exaggerated her cost of living expenses, had conflicting accounts on her Case Information Statement (CIS) claiming expenses that were already paid by plaintiff, and claiming that she only earned $29,000 per year when really her true salary was approximately $71,500. The Trial Court found that these financial misrepresentations constituted bad faith, and ordered for defendant to pay part of plaintiff’s counsel fees as a result.
The Appellate Division affirmed the trial court’s decision, finding no abuse of discretion.
Most family matters are resolved with agreements including custody agreements, visitation schedules, alimony and child support amounts, property settlement agreements (PSAs), Matrimonial Settlement Agreements (MSAs) and civil restraints. The agreements, especially PSA and MSA, can be reviewed years later, and are upheld with the exception of significantly changed circumstances or unconscionability. Therefore, you have to make sure that the agreement is in your best interests.
You also want to make sure that you report your income and financial status accurately at all times during child support, alimony, divorce, post-matrimonial, or any other situations involving money. This includes making sure your Case Information Statement (CIS) shows your true living status. If you fail to report income accurately, you can suffer harsh consequences like the defendant above. Make sure you hire an attorney that guide you , protect you, while getting you the best result possible.
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Michael J. Collis, Esquire