Attorney Brad Micklin discusses what to know before filing a child or spousal support modification.
Today’s topic is why every doctor needs a lawyer during a divorce. I believe that everybody needs a lawyer during a divorce, but doctors in particular have unique issues and can benefit from the objectivity an attorney provides.
This information works not only for the doctors that may be representing or hiring us, but I think also if you are the spouse of a physician, you may want to listen in reverse to what I’m suggesting. I say that because in my practice, I still see more men that are doctors and physicians while their wives are stay-at-home parents or work a different job.
Probably the first and most important issue in dealing with any divorce, but especially if you are a physician getting divorced, is child custody and parenting time of your children. And when I speak about custody and parenting time, I’m generally speaking from sort of teenagers and younger. We will touch on college a bit and the unique issues that come with that. But parenting children in a divorced family usually gets easier as the children get older. So I’m generally thinking of younger children so that you can prepare for the issues that you’ll face.
The first thing I think physician parents need to know is to build in flexibility to ensure that the demands of your career don’t interfere with spending quality time with your children. We always hope that parenting schedules are flexible. Most can do that. Not everybody can, some people need a rigid schedule. In my experience, the doctors and physicians that I’ve represented often don’t have the greatest ability to dictate their schedule, and they need to have flexibility to make changes. I generally recommend flexibility works both ways so that the other parent, the non-professional parent or the non-physician parent, should also have the same flexibility. You know, you always have to give and get, but the flexibility you want to have is to add or change your times. You want to try not to lose the amount of parenting time you have.
Many think it’s more important to have more frequent or more constant contact than longer contact. So what that means is maybe a dinner on a Wednesday, Friday, and Sunday may be just as good as having a single overnight because you’re getting more frequent contact, but that may not always work. So additionally, you want to build in opportunities for makeup parenting time. If you’re called away on an emergent issue and you lose a weekend, or you have to go away for a conference and you lose maybe a whole week, you want to have built in, in advance, a way to make up that time. Now again, in my experience, the best way to do that is to allow reciprocity to the other parent, to have the same kind of flexibility, but they may not need that. But it’s important that you try to incorporate that for yourself.
Next, we have extended vacation time. This is obviously important for all parenting schedules, but again for physicians and professionals, especially those that are running their own practice, because they may not always have the easiest vacation schedule. They may not always have a fixed time when they vacation, but you want to have it built-in where you can have extended vacation time, especially if you are likely to miss out on some parenting time throughout the year because of the demands of your practice and of your business. One thing to also keep in mind for extended vacation time, and this really goes for anybody having vacation time with their children, is to consider whether or not child support will continue over vacation time.
Depending on how long your vacation time is going to be, you could consider whether or not to suspend child support. Now, the support guidelines we’ll talk about a little later do not suspend child support for extended vacation time, which is customarily about a week or two, because the non-vacationing parent still has the expenses of the household: the utilities and the healthcare and things that will continue even over vacation. But if for some reason you happen to have a month-long vacation time in a block (or even over the course of a year), it is something you could consider doing because you will be absorbing a lot of expenses. If you have children over an extended period of time like that, that’s something to consider when you’re building in your plan.
So let’s get into more custody and parenting issues, and let’s talk about sort of the nitty-gritty, day-to-day things. Two things I almost always recommend considering are a provision called the right of first refusal, and then the ability to obtain your own childcare without having the right of first refusal. The right of first refusal is really similar to a real estate term or a contract term, but we use it in family law to suggest that if one parent who’s supposed to have the children doesn’t have time for the children because of an obligation or a conflict, the other parent gets to have the right to have the children during that time. Meaning if you’re going away for work and you’re supposed to have the children that weekend, the other parent should be able to get the children then as opposed to leaving them in some kind of daycare with a family member. Now you may want to have that, or you may want to have the right to obtain your own childcare. That’s something you need to consider.
There are benefits to each circumstance. It is more common to have the right of first refusal and not to get your own childcare during that period, but you may want the flexibility. So for instance, if you have the children for the weekend, but you have a seminar on one of the days, you may want to have a family member, friend, or babysitter watch the children so that when you return you’ll have the balance of your parenting time. Now, you also may be able to get that with the right of first refusal by having the other spouse or the other parent agree. It’s hard to say without knowing the circumstances, but it is something you want to consider. It is a very common term to incorporate into custody parenting time.
The next thing to consider in some cases, especially if you’re going to have young children going back and forth between parents, is change of circumstances. You want to contemplate how circumstances are going to change in your future and how that’s going to impact your ability to spend time with your children. For example, you may be building a practice. You may be in a specialty that is becoming more popular, or your career may be about to take a change that may change your schedule in the years to come.
You should look to see how the changes in your life will impact your ability to have your parenting time in the future. If you can identify things that will happen or changes that will occur and how, and you can identify how that will impact your schedule, you may want to build that in now so that you don’t need to go to court and prove a change of circumstances and file papers and get into a battle. If you can foresee it now, you should include it.
Along with that concept, if you do anticipate having to make changes or experiencing conflicts in the future, you want to consider a mandatory mediation – and possibly arbitration- provision. I recommend a mandatory mediation clause at a minimum, but arbitration is something you can consider.
Mediation is where you have a third person, it could be a lawyer, judge, social worker, or anybody you want, and that person is supposed to help facilitate your discussions and potential resolution of any conflict. I’m not a huge fan of mediation because many mediators that I’ve dealt with, while good-hearted and meaningful, they don’t mediate in the way that I feel you’re supposed to. Mediation is supposed to be the two of you coming to an agreement, and the mediator’s supposed to help you to reach that. That’s very challenging in family law because of the emotions and the significance of the topics; we’re talking about your children and your precious time with them. It’s not so easy to be patient and wait for the two of you to reach a reasonable accommodation, so mediators often just tell you what it should be and suggest and point you in that direction. While that may be helpful for many, if not, most, it’s not how it’s supposed to be. So I’m just not a fan of it being done that way. Nonetheless, I do still recommend it because it’s much better than filing papers and going to court and taking months and thousands of dollars to get to the same end.
Next we have arbitration. I am a fan of this approach because it’s a binding decision. You put your information to the arbiter, like a judge, social worker, or lawyer. In arbitration, you’d be coming to an agreement afterwards that would be binding. In the event that mediation isn’t right for you, arbitration is something you can consider. However, I’ve never seen a binding or a mandatory arbitration clause. That may be a little restrictive because you do give up some significant rights in arbitration. I’m not going to go into them at length here, but we have done several webinars and posts on the website that go into more detail.
So let’s wrap up custody and parenting time and move onto another significant issue in divorces, and that is navigating the division of your substantial assets. I don’t want to be biased and suggest that all doctors are making a lot of money and have substantial interests, but this article is geared towards that type of practice, where the client is in a moderate- to long-term marriage with young children, so that you will likely have acquired substantial assets. And there may be alimony considerations, which we’ll talk about in a minute.
The first thing you need to consider when you’re talking about assets is the appraisals and valuing them. You can either get a joint appraisal, which is you and your spouse together, and you have one opinion or one appraiser. If you’d prefer, each of you can get your own appraiser. Otherwise, you can also have a joint appraiser that’s appointed by the court, but it’s really not much different than just having your own joint appraiser.
So there are obviously a lot of considerations about how you want to do this and which option is better. And you know, there’s no one answer to that. Generally speaking, if you have an accommodating spouse as opposed to a potential high-conflict case, and if there’s good accommodation and communication, then you can do a joint appraiser. It’s faster and obviously less expensive than having two. Joint appraisal is good because you are not bound by that. If you get an adverse appraiser or an adverse result, you each still reserve the right to obtain your own individual appraiser. But the point of starting with a joint is to facilitate the litigation by getting one opinion and to keep the cost down. Sometimes it’s also being done to reserve your right to get a second opinion later. But from my standpoint, it’s best in most cases if you get a joint.
If you are looking to streamline litigation, individual appraisers may be a good or bad decision. It’s good that you get your opinions and can move forward on the litigation more quickly. The bad thing is that you’re bound by that. If you get an appraiser and you get an adverse report or valuation, you’re kind of stuck with it. In some circumstances you can seek to get another appraiser before you exchange that report, but you’ll likely be required to disclose the fact that you had a different appraisal that you’re not relying upon. And you’re likely to have to present that to the other side. It may impact the credibility of your subsequent decisions or appraisers because it’s going to look like you went shopping for the best number, and you don’t want it to be laid out in your paperwork that way.
The next issue that we’ll turn to when it comes to evaluating assets is comparative market analysis. This is generally for real estate. While an actual appraiser or appraisal is always the best option, some people elect to get a comparative market analysis, or a comp analysis as they’re referred to by agents and people in the real estate business. That’s a less formal valuation of real estate based on other properties of a similar makeup that have sold recently. It’s very common in residential real estate, and you could do it for commercial property. The problem in commercial is that it’s harder to find comparable properties in the same locale. If you own your home, the chances are that homes in your same street and town are very similar to yours. So, a comp for a house that’s sold next door to you is going to be very helpful. But if you own a multi-unit residential complex in Hoboken, it may be hard to find one that’s similar to yours in Hoboken that’s sold recently. So it’s more common for residential real estate, but it is certainly available for commercial assets.
There will often be pension and retirement accounts. These are not as difficult to appraise. Simply speaking, there’s two types of accounts when it comes to pension and retirement. One is what I’ll call a cash based account. Its value is based on the assets in the account. Another is based on longevity or how long you’ve been working with the company. There are companies that will appraise both types of accounts if need be. If it’s a cash account, like a 401k, for instance, it’s really just a division and a rollover for tax purposes. If it’s more complex than that, or there are premarital interests, there are companies that we as divorce attorneys use to help analyze and divide as well as rolling over and transferring the documents necessary to handle retirement accounts.
Next in a lot of cases, you’ll have, um, valuable personal property of artwork, collections, precious metals, and more. During your divorce, you want to figure out what you have and how you’re going to get it appraised. And along with this, you want to take inventories of the property. You can also have it held somewhere for safekeeping like we did with the coins, because they’re easy to throw in your pocket, and all of a sudden they disappear.
In cases of valuable assets, especially if there’s going to be storage or transportation, I usually recommend working with someone like a former law enforcement agent, and a lot of courts and judges have people that they can recommend. If you are dealing with a divorce practitioner that’s been around for a while, they will also have people that you can count on.
If you have a medical practice that you need to be evaluated, remember that there’s likely going to be both premarital interests and marital interests. First thing that you want to do is talk to your lawyer early in the process to find a forensic accountant who’s a good fit for you, your staff, and your attorney. Evaluating a medical practice involves issues that are unique to this kind of practice and are very important. They’re very difficult, and you don’t want to have your divorce and the strain and difficulty impact your ability to run your practice or impact your staff members. When you have lawyers making phone calls and accountants coming in to review documents, you want to make sure that the people that you’re working with are going to work well with you and your staff. You don’t want them to get nervous about their job or the strength of your practice. You certainly don’t want to scare away any patients or potential purchasers. If you’re actually looking to sell your practice in the future, you may also have other partners that you’re working with. So the point is to take all this into consideration early so that you can make sure the people you’re working with are good fits for all the people that are involved.
Another thing I often recommend to the doctors I represent is finding a staff member that you trust to be sort of your go between person for your attorney and for your forensics. It takes the burn off of the practitioner. If you’re going into a surgery, the last thing that you want on your mind is anything about your divorce. When you’re meeting with patients, the last thing you want is anything about your divorce on your mind. You want to be able to focus on your practice, keep it running, and survive through this. So having a trusted staff member that can take some of this burn off of you will help a great deal as you go through this process.
Let’s go a little more into appraisal of a medical practice. Some of the tips that you want to do, whether you’re in a divorce or if you have one looming in your near future, you always want to first organize your records in advance. Doctors and professionals are often very good at what they do. However, that doesn’t guarantee that they’re good business owners. Many are and many aren’t; it’s the nature with any profession. So, make sure that your records are organized so that when people do come knocking on your door for evaluations, questions, discovery, you’re not fishing to put it all together. To avoid delays, you should have it and make sure it’s ready to go. You’ve reviewed it so that it’s in its perfect form.
You want to provide the information documents to the business early on, and that is to your attorney or to your appraisers. Don’t be in such a rush to turn it over to the other side; let your lawyer guide you on how that is to be done, but you want your people to have it in hand as fast as possible. Next, most important for doctors is to consider the need for nondisclosure confidentiality agreements and to absolutely make sure that you are in strict compliance with HIPAA and your doctor/patient privilege requirements. Now, I have never represented a doctor that had any less than the best understanding of his obligations for his clients or his patients and his practice. But you need to make sure when you start handing over information to other people, like your staff members, forensic accountants, and attorneys, that these have been considered. You will usually need a protective order signed by all the people that will be touching these documents: your professionals, your lawyer, your accountant, the court, the other party. So you need to make sure that this is contemplated and done in advance before anything leaves your office.
While we’re still talking about your medical practice, here are some of the things that you want to consider as far as its valuation. First, ask your attorney about the momentum of marriage to minimize exposure to equitable distribution claims. What that means is that the value of a business in divorce will often be valued by the change over the course of your marriage. So let’s say you opened your practice five years before you got married, you were in your marriage for 10 years, and your business value quadrupled over the course of your marriage. Many will argue that that was the momentum during the 10 years of your marriage, where it may have been the first five that really built your office and where it really took off. So, the momentum of marriage is what judges rely upon to make sure the other spouse gets the best or fair share of the business evaluation that may not in fact be the right analysis.
If you are going to have a business that was premarital, you want to start contemplating what you’re going to need to do to establish that value and how that value was the momentum that caused a significant increase during your marriage and not necessarily the contribution of the other spouse. And I’m not saying that this is a bright line for all cases. It may have been the contribution of the other spouse that allowed the practice to take off; many physicians agree and want their spouse to share in that momentum. But on average, in my experience, most physicians and spouses alike don’t want to part with their assets in a divorce. But when I’m talking about valuation, I don’t want to sound like I’m trying to suggest, you know, stick it to your spouse and don’t get them the fair share. But even though they helped you grow the business, I’m saying, look at it and make a determination. If it was the marital contribution that increased the value, the momentum of your marriage, then your spouse should share in that. If it was the pre-marital business that really just grew over time, then they shouldn’t.
Along those lines, you also want to ask your attorney what’s going to help you minimize that claim. If it is in fact your position, that it should be minimized. You want to discuss early on the level of detail that is needed for the appraisal and throughout all the phases of your discovery.
Another issue that I won’t go into in depth, is that the law is very archaic in the valuation of practices. It does not adjust for lack of marketability, meaning if you’re just a one-man shop and nobody would buy it from you unless you ran it, there’s no adjustment. If you own a small share of a big practice that you can’t really sell, so there’s no marketability for it, there’s no discount for that. So the principles that would normally govern what we call arms length sale of a business, when you’re just selling yours to some other person – some investor, another doctor, whatever it may be – don’t always apply in a divorce. So in many cases, the valuation of your share is going to be much greater than it realistically is, and you may need to buy that out. So you want to work to minimize that. And that’s what these topics are all geared towards.
Now, let’s turn to the other, probably most dreaded topic in divorce, and that is alimony and temporary support while the matter’s pending. I always talk about temporary alimony and permanent alimony. And when I say permanent alimony, I don’t mean you’re paying it forever. I mean that it’s after the divorce. So, actually I should call it final alimony. So let’s talk about issues with alimony.
As I mentioned earlier, my practice and the clients that I see, especially the doctors I see, are more often traditional. By that I mean that there is one person running the practice and one person staying home, raising the children – or at least that person may be working in the practice to keep the books and work with patient relations, but not necessarily full-time. So the first topic that a traditional physician needs to consider is imputation of income to the spouse. Most people in a divorce are going to be considered to have the ability to earn some level of income, whether or not they have education, whether or not they have work experience, regardless of their age, they’re going to have some level to earn. Now, that’s going to be drastically different on a case-by-case basis. So the first thing you need to do is realize that this is an issue and start investigating it with your attorney.
The most important issue inside of that consideration is an employability expert for that spouse. You can’t go in and say, I think they could make this much money. You can’t go and say, the department of labor stats tell me that they could make this kind of money. You can’t even necessarily say, they made it in the past, so they’re going to make it again. That may not necessarily be true. An employability expert or somebody will come in, administer certain tests, measure capabilities, and give a report and an evaluation of what potential earnings that spouse could receive. That is going to be crucial in minimizing your alimony.
Now, here’s one thing you can consider, because employability as with all experts in a divorce can be costly in a divorce with a physician, especially if there’s a private practice. Sometimes I try to reach an agreement on what imputation of income will be. It’s not that hard to truthfully figure out how much a spouse is likely to earn when he or she enters the workforce. We look at past experience, past education, the marketplace, parenting responsibilities, and you can get a sense whether they’re going to make $25,000 or $125,000. So sometimes it saves time and money to sit down and figure out what we think it really would be and make an agreement to that, because that’s not the only issue when it comes to alimony. There are at least 14 different criteria.
After you’ve considered imputation employability, you next want to consider some of the issues that are going to come out in your temporary support. You may be in a divorce for one or two years. There are requirements that the administrative offices impose upon judges to move cases expeditiously, but that doesn’t always work. And when you have issues like real estate evaluations, business evaluations, and employability experts, it’s just sometimes hard to get it done inside that time. So your temporary support may run for a long period of time.
I always ask for certain things to be granted in the beginning, whether we’re doing this by an agreement and setting temporary support, or if we are going to court and a judge is deciding it. First is mandatory job searches.I never want the spouse who’s receiving support from my client to be able to sit back and not do anything for a year or two. You want them to be able to prove and present the efforts that they’ve been making to get jobs. First, it’ll show that they’re taking responsibility and looking for a job. It’ll also give you a sense of what jobs are available and the likelihood that they will obtain one of these so that you have a sense for the needs for alimony that will later be decided.
Another thing I always want to get is a trigger for automatic review of support. Again, this may be sitting for a year or two, and nothing’s happening. In the meantime, your business could take a dive. In my experience, I know a lot of successful physicians and business owners who believe that they’re always going to be successful because they always have been successful. And while we always hope for that, it’s not always the case. You need to be able to plan that it may not be. So you want to be able to review support. You also want to have the other spouse have an obligation to be planning for the future. If support can be adjusted, and they aren’t complying with mandatory job searches, or they don’t show a genuine effort to get a job, they know it may be adjusted. And then it’s better for everybody involved.
Another issue for temporary and final alimony is cohabitation. There’s often cohabitation during a divorce. Sometimes it’s because partners have moved on and entered new relationships. Sometimes it’s because of financial need. They move in with a partner, a friend, or family members. This is going to impact their needs, and it may impact the support you’re paying, which is usually for the better for you. So you want to make sure that you’re watching for cohabitation. You want to make sure there are provisions that prevent it, and if it does occur during your payment, you want to have cohabitation as a trigger to review and or modify.
Now, you may find this out by having a private investigator. That’s a tricky topic that there are some issues with. First of all, with GPS devices and things like that – stay away from it. It often can be considered unlawful, and in many circumstances it can be considered domestic violence. So sometimes having a private investigator do this takes that risk off of the client, because the client’s not the one doing it. It’s the private investigator doing it. And they have a different purpose for seeking this information, as opposed to a spouse. So speak to private investigators, and speak to your attorney if cohabitation is likely to be an issue. You want to make sure that you do it properly and that it in no way compromises your case.
Next are some considerations for when you’re looking towards negotiation. Believe it or not, most divorces are resolved in that way. Everybody thinks they end in ugly court battles. Most of them are not; they’re settled at a table with a couple lawyers and some negotiation. One thing you want to find out, and this goes back to the earlier part of this webinar, where we talked about the division of assets, you want to be sure to avoid a double dip in between alimony and equitable distribution. And what that means is, if your spouse is going to be taking substantial assets and generating substantial interest income, you want to make sure that you understand how that impacts the calculation for alimony now, and in your future, depending on the length that you will be paying and the amount. You want to make sure that you understand the relationship between the assets and the income from the assets that they’re going to receive, as well as the alimony that you will pay.
Another thing to consider when discussing alimony with your attorney is whether or not there’s a buyout of alimony. In some circumstances it’s good and in others, it’s not. A lot of people that I deal with, especially the positions I deal with, come from a position of not wanting to have anything to do with their spouse afterwards, for whatever the reason is. And they want to just give a lump sum of money and be done with it. And that’s good in the sense that you’re usually getting a reduced value because they’re getting the present use of the money and the future interest of the money. So you’re going to pay less, whether it’s slightly or significantly, which is a good thing. One of the bad things is if the spouse should unfortunately pass or remarry the day after you make the lump sum payment, you don’t get any of it back, which is likely to be different if you were paying a traditional alimony payment over a period of time. So these are the kind of considerations you want to consider and discuss with your attorney, figure out, which is best for your circumstances, and make sure that you’re just well informed of all of these aspects.
Now, the next support issue to look at is child support and college. So child support and college support are fundamentally different in New Jersey, and they can often be different fundamentally for a doctor or physician practice type of divorce. So first to understand is that New Jersey has a child support guidelines, which is determined based on several factors, but largely the combined income and New Jersey’s belief of how much of that income is needed to support a child. You plug the incomes into these child support guidelines, and you get a fixed number that gets paid for child support. Now, the New Jersey child support guidelines go to a combined net of $187,000. In many, if not most divorce cases that I’ve had that involve a doctor or a physician, they are beyond that $187,000 gross. So in those cases, New Jersey has what’s called a high income addition, which is when we run the child support guidelines, and we see the cap ceiling of the number you plug into the full income, but it only gives you up to what would normally be the $180,000.
Now we have to figure out based on the needs of the child now and in the future, how much more should be added on top of the child support amount to make sure the child’s needs are going to be met. Now here, I’ll make a mention of the phrase “a child doesn’t need three ponies.” And what that means is if you are making $10 million, it doesn’t mean that your child support should be $1 million or $10 million. It doesn’t mean your child support should be a million dollars. It doesn’t mean that a child needs to have every benefit because of a high income earning family. There’s a level or a cap where it’s excess. So what the courts do to determine this is they look at the underlying child support custody factors to determine what special needs or abilities or education the child has and will have in the future and build in what would be an extra payment to meet these needs. Now that’s important. So along those lines, always speak to your attorney regarding that because the important thing when it comes to high income addition, is you need to make sure that you understand what needs are being factored into this high income, because as the needs change, your support’s going to change and may increase or decrease.
If you have a child with a special propensity in an area or special talent or a medical issue, you’re going to be paying extra to meet those needs. If the child loses interest in that hobby or goes in a different direction or his or her health improves, those expenses are no longer going to be incurred. You want to be able, if you feel the need to, to change the support level and eliminate those expenses. Conversely, as a new need arises, you may need to review and add to support. So you want to make sure that you’re clear what’s going into it and what may be added to it later. And you only can get that largely from speaking to your lawyer. So consult with him or her before other issues around child support.
We talked a little bit about modification when it comes to parenting time, but modification of support obligations and reunification counseling are just a lot of issues to touch on. Again, in my experience physicians that have a hectic work schedule, they’re often absent or have been for a period of time. A lot of times when they get divorced, the other spouse starts to alienate a child, intentionally or unintentionally. I’m not here to accuse. I’m not here to throw out the buzzword about alienation, but it does happen. Like I said, sometimes it’s intentional and sometimes it’s not, but it does happen. You want to be prepared for counseling and experts that could assist you if that does happen. It could have happened even while you were married. If you were busy building your practice, strengthening your profession and your skills, you may have had to put your family on hold with the goal of having time later in life. And then the divorce came up and changed those plans. So just be aware that, just like when it comes to parenting time, think about what’s going to happen in your future. What changes may occur financially for you and your children build in provisions about modification, if you have been or expect to have problems with spending time with your children, or if you have a spouse that may frustrate that, talk to your attorney about reunification counseling and therapy, as well as experts for that.
Now, along with child support is college contribution. A lot of families have started their college contribution before getting divorced and they may have a 529 or other college savings set up that will usually be maintained with the chosen benefit. But if you’re going to be talking about contribution after the divorce, either put it into your own separate 529 or own separate college savings because in some cases. The reason to have it is so that you can make sure that your post divorce contributions are considered your contributions for college. I had a case that came to me post-judgment, meaning after the divorce was over, where they agreed to continue to contribute to the 529. The physician that I was representing had been contributing significantly more. And there was an ambiguity as to whether or not the doctor was going to get credit for the entire contribution, or whether or not that was going to be put on top divided equally and they would contribute afterwards. So fortunately it was resolved favorably on our side that the excess contributions counted towards the doctor’s contributions and it didn’t get divided equally where he would then have to contribute more – but that doesn’t mean it’s always going to work like that. So you want to make sure to address it in your resolution or at the trial court level and keep your post divorce contributions separate.
The next issue for college and support issues is what in New Jersey is called the Rutgers Rule and also the graduate school contribution. So the Rutgers Rule is basically saying that the child could go to college anywhere, but your contribution is limited to what it would be if they went to Rutgers or a state school. So even if they go to Harvard and they’re spending five times the amount, you can agree in advance that your contribution is going to be limited to what it would’ve been.
Now, agreements for children are always subject to review by the courts now and in the future. So if you make an agreement that’s going to harm your children in the future, courts are going to change it. And I say that with regard to the Rutgers Rule, because in your “average” divorce, you usually have modest incomes, and you may have modest levels of education. The courts are not likely to overturn an agreement that says I’m only going to contribute to a Rutgers level because that’s what I would’ve done if we were together. Now, if you’re a high income physician and you make an agreement that says you’re going to limit your contribution even though your children may have the ability to go to a much better school, courts are likely to change that or to modify it. Now, it’s not hard and fast that the court will, but just be prepared that if you are going to make that kinda limitation, make sure you have very clear, specific language about why it’s being done, the changes that you’re making and the concessions that you’re providing for that agreement, so that it is less subject to modification by court later. And when it comes to grad school contribution, a parent doesn’t have to worry about being court ordered to contribute to graduate school. As a caveat, the lead case Newberg versus Rico in New Jersey that discusses the child support of a college bound child was actually a graduate school case. But it’s only been used one time to support contributing to a grad school program. That was a unique circumstance, and that wasn’t my case. I just knew the judge who did it. I’ve never seen it since then, but just be aware because a physician will have obviously had significant grad school education, so it’s foreseeable that a judge would think that he or she would want the same for his or her child.
Another thing when it comes to college contribution, and this really is applicable to all cases, but physicians do need to also be mindful, is adjusting child support when the child goes to college. It doesn’t mean child support’s eliminated because you’re paying for college; you sometimes pay for both. But the child support that was set by the guidelines with the high income addition, that usually gets modified, but not eliminated. It’s modified because some of the expenses that were being paid for the child are being paid through college, like room and board and food. But the custodial parent still has expenses that they’re incurring for the child, like keeping a room for them. They’re likely keeping the same home. So their mortgage or rent payment remains the same. Their utilities are the same. They’re still providing healthcare. So there’s usually going to be a child support component and a college contribution component. But the point is that child support can and should be modified downward. Usually when a child goes to college, other things to look after college contribution support are what I call extras: automobile, car insurance, cell phones, preparatory classes, computers, iPads, whatever may or may not be foreseeable. You want to sit down and think about it and decide, are you agreeing in advance to contribute to it or not? Because you don’t want to wait until later when you’ve agreed to a child support amount, you’ve agreed to a high income addition and you’ve already agreed to college for instance, or you’ve been ordered. And now all these things come up and now you have to address whether you can pay it or not. And sometimes you don’t have the choice. Sometimes it’s going to be ordered to do it. So contemplate it at the divorce level, contemplate it when you’re discussing parenting time and child support. It’s likely to be upheld later when you are post-divorce and actually addressing the issues of a child going to college.
Next, let’s talk about some issues that you’ll need to deal with when it comes to your attorneys and other experts on a more personal level when getting divorced. Divorces are often very difficult and can be challenging and traumatic enough as-is. But one of the first things you need to consider when you’re getting divorced is estate planning. If you are a prominent or successful physician and you have a practice and you have assets, you want to have a new will drawn up as soon as possible – even before you get divorced. Under New Jersey law, what would normally happen is that if you’re contemplating divorce, what your will says happens. So you may leave all your assets to your spouse. You can draft a will before getting divorced that says differently that could possibly exclude your spouse.
If you draft the will while you’re married, saying my spouse gets nothing, that’s not necessarily going to be the outcome, but it will still limit what your spouse may get. You could also get some advice on how to structure the assets to remove them from your estate or from what’s called probate so that your spouse would get less. And also, know that when you file a divorce, the law revokes the will that you had. So at that moment of divorce filing, you technically don’t have a will. Which means that your spouse may or may not get everything. And you may not want that.
You most likely don’t want that. Even if you want it to go to your children, and you think it’s going to go to your spouse and then your children, that may not be the case. Your spouse may remarry, your spouse may decide your children don’t need that. Nonetheless, just know when a divorce is filed, you don’t have a will. You should draft one at the time of filing, and you may want to draft one at the time of final resolution because the asset structure will likely have changed. Estate planning is a crucial issue to discuss with your lawyer the day after you retain him or her in a divorce if you’re a physician and you have substantial assets.
First we talk about death, and now we’ll talk about taxes, the two certainties in our life. You always want to consult with an accountant for tax implications of your support and equitable distribution, settlements, both for current and future. Now your divorce attorney should be able to help you with these topics, give you some general guidance about when and where and how alimony is, or is not taxable; the tax consequence of the transfer of your assets; and things like that. But a divorce attorney cannot give absolute tax advice. They’re not a tax attorney, and most of the time they won’t be as well-versed in taxes as a tax lawyer would be, or as an accountant. So you certainly want to speak to a professional tax attorney or accountant for that advice.
One quick thing I want to mention: a physician going through a difficult divorce is going to have a lot of challenges. Because of the need to make sure mental capability stays strong and you treat your patients, I always recommend taking some time for your mental health: get a therapist or talk to a counselor. Obviously it’s confidential. I think everybody going through a divorce, if it’s a difficult divorce – I guess there’s really little easy divorces for most people given what you’re going through – I would say go to talk to a therapist, go to a counselor, or at least have one set up that you have interviewed so that if you don’t think you need it right off the bat, but later find you need one, at least you have one and you don’t have to start the search. You can also attend a support group to address some of those difficult issues.
One final piece of advice: speak to a lot of lawyers before and during your case. Lawyers are usually very flexible. We try to be convenient and helpful to our clients. We do understand the nature of divore and its difficulties. Now that we’re emerging from COVID, there’s been a lot of changes. We have virtual meetings and things that are less disruptive to a schedule that we didn’t have years in the past. And in my experience, both with my clients and other lawyers, I know we do try to help our clients the most, but while they call us counselors at law, we’re not counselors for mental health issues. So there’s only so much we can do for you there, and you might want to make sure you have some other people in your corner.