Equitable Distribution of Stock Options in Divorce

M.G. v. S.M. is a post-judgment divorce matter where the marital coverture share of a stock award vesting after the filing of the divorce complaint was sought by the Defendant. The parties married in 1998. Every August, from 2003 through 2010, the Plaintiff received a stock award from his employer which would vest in stages thereafter, beginning in 2011. On July 28, 2014, Plaintiff filed the divorce complaint. By that time, M.G. had been granted eight stock awards but only three had fully vested with the remainder to vest annually thereafter, each August. The company’s policy was reviewed and specifically stated that employees were granted stock to compensate them for long-term contributions to the company’s success and that the stock awards “represent the future right to receive shares…when a vesting requirement is satisfied.” According to the Plaintiff, the stock awards are a way for the employer to retain employees and give them reason to drive the stock higher through personal performance. Plaintiff did agree to share the vested stocks with the Defendant but maintained that any non-vested stock would vest only if he continued to perform at higher levels following the filing of the divorce complaint. The trial judge found that S.M. was entitled to one-half of all stocks awarded before or near the date of the complaint. In his opinion, the trial judge found Plaintiff to be credible and Defendant non-credible. In his written opinion, the judge went on to include that the stock awards of 2014 were based on the Plaintiff’s past performance, which was rendered during the marriage. The Plaintiff filed a motion for reconsideration with which he submitted documents from his employer spelling out the fact that post-award changes in employment status, hours, leaves, disability, and otherwise “shall” affect the employee’s rights in stock awards in support of his argument that the non-vested options did not belong, in part, to the Defendant. The motion was denied. Plaintiff appealed to the New Jersey Appellate Division. In Pascale v. Pascale, 140 N.J. 583 (1995) and Reinbold v. Reinbold, 311 N.J. Super. 460 (App. Div. 1998), the court held that options and other incentives earned during the marriage, even if distributed later, are subject to equitable distribution. The trial judge misapplied these cases to stock awards that would be earned after the marriage. In Slutsky v. Slutsky, 451 N.J. Super. 332, 344 (App. Div. 2017), the court held that “reversal is warranted when the trial court’s factual findings are ‘so manifestly unsupported by or inconsistent with competent, relevant and reasonably credible evidence as to offend the interests of justice.” In Clark v. Clark, 429 N.J. Super. 61, 71 (App. Div. 2012), the court determined that a family judge has wide discretion in the distribution of assets which are subject to equitable distribution, however, in the within case, the trial judge’s findings were not supported by credible evidence and controlling legal principles pursuant to the terms of Gonzalez-Posse v. Ricciardulli, 410 N.J. Super. 340, 354 (App. Div. 2009). In Pascale, the Supreme Court upheld its earlier decision from Landwehr v. Landwehr, 111 N.J. 491, 504 (1988), wherein the court held that when equitable distribution is sought for assets received post complaint, the touchstone becomes whether the asset was acquired as a result of efforts during the marriage, in which case the asset is subject to equitable distribution, or post-complaint in which case it belongs to the spouse who still must earn the asset. The N.J. Appellate Division panel determined that the trial judge was incorrect in his decision. The matter was reversed and remanded to the trial judge for findings pursuant to applicable case law and N.J.S.A. 2A:34-23.1. If you are considering divorce or have been served with divorce papers, you should consult with an experienced family law attorney in order to insure that your rights are protected. For more information about divorce, post-judgment motions, equitable distribution or other family law matters, visit DarlingFirm.com. To schedule a consultation, call us today at 973-584-6200. This blog is for informational purposes only and not intended to replace the advice of an attorney.

NJ Alimony Reform

On September 10, 2014, after three (3) years of political and legislative back and forth, New Jersey Governor Chris Christie signed into law an alimony reform a bill that went into immediate effect and alters the state's existing alimony law, N.J.S.A. 2A:34-23. The new law creates durational limits and enumerates particular factors that concern the modification process and termination of alimony. It is important to note that the new reform law does not apply to alimony awards that have already been established and will only affect alimony awards proactively. Specifically, the law "shall not be construed either to modify the duration or alimony ordered or agreed upon or other specifically bargained for contractual provisions that have been incorporated into: 1) a final judgment of divorce or dissolution; 2) a final order that has concluded post-judgment litigation; or 3) any enforceable written agreement between the parties." Therefore, the new law will only apply to divorces that are currently in proceedings and all future divorces. The law will also apply to all future applications for the modification of alimony obligations based upon changed circumstances. First, the most significant alteration to the current laws regarding alimony is that the term "permanent alimony" has been replaced by "open durational alimony." From now on, for any marriage which lasted less than twenty (20) years, the total duration of alimony shall not exceed the length of the marriage, except for situations of "exceptional circumstances." Some of these circumstances include: the ages of the parties at the time of the marriage and at the time of the alimony award; the degree and duration of dependency of one party on the other party during the marriage; whether a spouse has a chronic illness; whether a spouse has given up a career or a career opportunity or otherwise supported the career of the other spouse; and others. This change to the law garnered additional support following the 2013 decision of Gnall v. Gnall, 432 N.J. Super. 129 (App. Div. 2013), which a marriage of fifteen (15) years was considered a long term marriage warranting permanent alimony. The new law effectively erases the legal import of that decision because it directs that a marriage of less than twenty (20) years is not a "permanent" alimony situation. Next, the court is required to consider how long interim or pendente lite support was paid during the proceedings in determining a final alimony award. This may deter a payee spouse from causing delays in divorce proceedings as a means of continuing to receive interim monthly support because he or she believes it will not have an impact on the final alimony obligation. With respect to retirement age, "full retirement age" is now defined as the age at "which a person is eligible to receive full retirement benefits" from Social Security. The new alimony reform law contains other more complex changes to the ways in which alimony will be awarded in the future. If you anticipate that you will be filing for divorce or may want to petition the court for a post-judgment modification of your alimony it is critical that you seek out the advice of an experienced attorney before moving forward. For more information about alimony, post-judgment modification, divorce, child support, or other family law matters in New Jersey visit HeatherDarlingLawyer.com or click here to e-mail us. This blog is for informational purposes and in no way is intended to replace the advice of an attorney.

Emancipation Is Presumption At Age 18

Emancipation of a minor is triggered by age or certain events. In 2012, a father made a motion to emancipate his 2 daughters, modify support accordingly and terminate his alimony obligation. The daughters turned 18 in 2002 and 2008 respectively. The NJ Appellate Court decided that the fact the daughters remained dependant after the age of 18 did not provide a reasonable basis to deny the father's motion without any further review. At a minimum, if either or both were to remain unemancipated but over 18 and not attending college while living at home the child support would need to be recalculated. In Ortiz v. Ortiz, the father was the parent of alternate residence and the mother was awarded primary custody of the children in 2002. The father had been living in California and was now on disability, the older daughter had married in 2004 but continued in college until 2008 and the younger daughter was attending college. The father clearly met the burden of showing changed circumstances based on the children's ages, marriage, his disability since the divorce and the younger child's entry into college. Clearly the older daughter was no longer within the "sphere of influence" of her parents and marriage is one of the reasons the legislature considers grounds for emancipation. As to the other child, upon reaching 18 there is a presumption of emancipation which shifts the burden to the other parent to show an ongoing need for support thereafter. Full-time attendance of post-secondary education is a basis for continuing support after the age of 18 and in some cases parents will also be required to pay for college. The academic record of the child is a factor the court will consider as well as the parents' agreement to support the child during post-secondary education contained if one accompanies the judgment of divorce. The mother offered no proof of the older daughter's need for continued support. She presented proof of the younger daughter's attendance at college but nothing showing the cost thereof. At a minimum, the father was entitled to further discovery from the plaintiff mother as well as a recalculation of child support in regard to the older child based on the factors in N.J.S.A. 2A:34-23(a), pertaining to child support, or the child support guidelines if the younger daughter continues to reside at home while attending college. If you are seeking or opposing emancipation, modification of child support or custody you should contact an experienced family law attorney immediately to protect your rights. For more information on emancipation, child support, custody, alimony, dissolution, divorce or other family law matters in New Jersey visit HeatherDarlingLawyer.com. This blog is for informational purposes only and not intended to replace the advice of an attorney.