D.M v K.M AND COLLEGE EXPENSES IN A NJ DIVORCE

The growth of college expenses and tuition has far outpaced the growth of the average person’s wages. Student loan debt affects the majority of young college students today, and it is no surprise that parents want to help ease the burden for their children. When couples divorce, and college is contemplated for their kids, it can be an issue as to who should be responsible for the costs associated with a university education. In a recent unpublished case, D.M v K.M, the New Jersey courts grappled with college expenses in a NJ divorce.

The parties had been married for seventeen years when they decided to file for divorce in December 2010. They had two children – a daughter, born in 1992, and a son, born in 1996. During the proceedings, the parties signed a property settlement agreement (PSA), which was incorporated into the final order of divorce. The PSA held that the couple would address payment of college expenses at the time their children would be attending, as well as requiring Plaintiff (the husband) to pay $100/week in child support. Each party also agreed to claim a tax exemption for one child each.

The parties’ daughter entered college, and the defendant paid the first three semesters, after which she filed a motion with the court requesting contribution from the plaintiff, as well as payment from him for future expenses. She alleges that Plaintiff contributed money from the children’s payroll checks into a college fund for the children, but actually used the money for his own purposes.  He motion was dismissed, and she appealed. The appellate court held that the trial court improperly denied her motion based solely on the fact that defendant requested reimbursement after she paid expenses. The court remanded, and ordered the trial court to conduct a full Newburgh analysis. The Newburgh factors are used in family cases when analyzing college contribution claims, even though the case was actually a wrongful death action. The Newburgh case asserts that parents have the duty to provide a necessary education for children – even after they have reached the age of 18.

Defendant refused to testify at the Newburgh hearing, and thus, her motion was once again dismissed. Additionally, the court terminated payments of child support by plaintiff, and allowed him to claim tax exemptions for both children after he agreed to pay all college expenses for both of his children. The defendant filed a motion for reconsideration, which was not timely filed. Then, the defendant appealed. She argued that trial court erred in considering the children’s money from the college fund as plaintiff’s contribution, and should not have terminated the child support, and that her motion for reconsideration should not have been denied. The appellate court had to determine whether the college expenses in a NJ divorce had been adequately decided previously.

The main crux of the issue in this case was the role of the children’s payroll checks and the college fund. The defendant claims that plaintiff deposited the children’s checks into the fund in his name, and therefore, the fund should be considered as belonging to the children, and not the plaintiff. However, the PSA in the original decree distributed the college fund to the plaintiff, and therefore, it was his property under the divorce. The appellate court also noted that because the defendant refused to testify at the trial to provide evidence for the Newburgh factors, she deprived the court of its ability to make the necessary determinations to adequately address the issue of contribution for college expenses in a NJ divorce, and the court was forced to dismiss her motion.

The defendant also argues on appeal that the lower court’s decision to terminate child support was based on the fact that the college fund was deemed to belong to plaintiff. The appellate court looked to the trial court’s order, noting that it explicitly referenced the plaintiff’s agreement to pay the remainder of his daughter’s college expenses. The trial court had decidedly not made its decision based on the ownership of the college fund, but rather on the agreement by plaintiff to cover the costs.

The final issue in the matter occurs when defendant appears to try to relitigate the division of property and who should pay college expenses in a NJ divorce contained within the final judgment. The appellate court agreed with plaintiff’s argument that the PSA had disposed of the college fund to him, vis a vis the language that awards each party’s separate bank accounts to that respective party.  Defendant argued that the college fund was never an asset of the marriage, and the PSA should never have distributed it. However, in her original equitable distribution summary, she provided the account, stating that each party was entitled to half the amount within, and distributed the entire account itself to the plaintiff. The plaintiff was clearly in ownership of the account, and had been for seven years.

As for the tax issues and the relationship to the children’s college fund, the trial judge had specifically instructed to submit evidence to support her position, and after reviewing all submissions, the trial judge determined that this was not a new issue, and therefore, reconsideration on the issue was inappropriate. As a result, the appellate court determined that the trial court did not commit any egregious error, and its decision was affirmed.

While this case touches upon college expenses in a NJ divorce, it is also an important reminder that there are procedural rules in place for a reason, and if a party does not follow them and files a motion late, or refuses to testify, the court will not be sympathetic. It also demonstrates the reticence of a court in disturbing prior agreements, even if the current arrangement based on the old agreement is now inconvenient for one of the parties.

If you have questions about how to determine who will pay your child’s college expenses in a NJ divorce, contact the Law Firm of Peter Van Aulen today at (201)845-7400 for a free initial consultation.

 

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