In our last post, we discussed a few aspects of estate planning that a couple with minor children and a relatively simple estate might want to address during divorce mediation. Today, we will continue looking at our example couple, Deena and Greg, as they consider educational planning for their two younger children, 14-year-old Brian and 12-year-old Lindsey.
As we previously discussed in College Planning and Mediation: Part I, there are circumstances under which divorced parents In New Jersey can be held responsible for funding post high school education for children. Educational expenses typically include tuition and fees, room and board, and books and supplies. Other associated costs include things like college prep exam fees and review courses, application fees, travel expenses for college visits and necessary and discretionary expenses during college (clothing, travel, entertainment, etc.). Absent an agreement between parents about how to cover costs, a court would apply the criteria set out in the 1982 case of Newburgh v. Arrigo.
If your children are young, it might seem like a better idea to wait and address this issue later. After all, many things can change over the years, and you already have plenty to worry about. Mediation, however, is an ideal forum for addressing parental contributions to children’s higher education expenses. Courts tend to uphold agreements between parents about contributions, as long as they are specific and clear. If college is still a few years away, you can write up an agreement that provides for an income-based cost sharing plan while leaving out specific dollar amounts. Putting your plan into your Marital Settlement Agreement (MSA) allows your attorneys to review it along with your other terms. You can also include a clause agreeing to return to mediation to refine the agreement later.
Educational Contributions and Parental Income
Deena and Greg currently have very similar incomes and plan to share parenting equally. They were happy therefore, to take child support off of their current list of concerns. Nevertheless, they should be prepared for the possibility that this might change. What if one of them gets a new job or starts a lucrative business during the next few years? At that point, the less financially well-off spouse might wish they had thought about college funding sooner. They might even want to change their mind about getting a child support agreement.
To get an idea of how New Jersey courts calculate child support for parents who share custody, Deena and Greg can look at the New Jersey Shared Parenting Worksheet. The first figure in the support calculation is “gross income.” This includes both earned and unearned income. Part C of the Family Case Information Statement (CIS) includes a more detailed breakdown of what income includes. As we have previously discussed, it is usually a good idea for couples in mediation to complete and exchange at least a rough draft of the CIS, even if, as in Greg and Deena’s case, their financial situation is pretty simple. Sometimes completing the CIS reveals things that no one previously considered. Other times it simply ensures that all income and assets are taken into account.
Although the New Jersey child support guidelines do not apply to children who are in college and not living at home, they can provide insight into how parents might set up an agreement for income-based college contributions. The next step will be to decide how to budget for the planned contributions. The parents can then incorporate the contribution agreement into their MSA.
Funding Higher Education for Children
Deena and Greg do not currently have any savings designated for their children’s education. They do, however, have good salaries and well-funded retirement accounts. Greg has a traditional IRA and Deena has a 401k. In some cases, it is possible to use retirement accounts for educational expenses. Withdrawals from both traditional and Roth IRAs before age 59 ½ that are used for qualified higher education expenses are not subject to the usual 10% early withdrawal penalties. They are, however, still subject to income taxes. Qualified expenses generally include tuition, fees, books, necessary supplies and equipment, and room and board for students enrolled at least half time in a degree program.
There are, of course, downsides to using retirement funds for education, the most obvious of which is that the funds would no longer be available for retirement. It is also only IRAs that can be used in this way. Deena’s 401k would not qualify. It might be possible for her to borrow from her vested balance in the 401k to pay for college expenses. Before considering this option though, she should discuss the financial impacts with a financial advisor. Pursuing other student loan options will usually be a better choice.
Another option that is usually better than dipping into retirement savings is opening 529 plans. Although it would have been ideal for them to begin earlier, Greg and Deena still have time to do this. Each parent could open an account for each child and fund the accounts on a regular basis going forward. Any loans or retirement withdrawals would then be only back-up options. If the parents can agree on how much each of them will contribute, they can coordinate setting up the plans with the rest of their asset distribution in divorce.
Including Children in College Planning Discussions
Deena and Greg should also decide how and when to include their children in college planning discussions. Brian will be old enough for that within a couple of years. Lindsey is still young, but because of her disability, her future education may require earlier and more extensive planning. Parents often want children to understand that there is a “cap” on how much they will be able to contribute. The earlier they make this clear, the less likely a child is to become excited about possibilities that do not make sense financially. If children may need to work part time or take out loans themselves, that is another important topic of discussion.
Deena and Greg decide to build future college planning meetings into their MSA. They set three dates, the first for a meeting between the two of them, and the second and third for meetings between both parents and each child. They also agree to add additional meetings with a mediator if necessary to resolve any disagreements. A tentative checklist of topics for the meetings includes the following:
- The Child’s Educational Goals
- All Estimated Costs of the Education
- Current Savings and Future Savings Plans
- The Child’s Expected Contribution.
- Each Parent’s Expected Contribution
- Mechanics of Payment
For more detailed information on college planning and mediation, including more on the list of topics to address, see: College Planning and Mediation: Part II.
If you and your spouse or former spouse would like to discuss educational planning for children and mediation with one of our experienced family mediators, take advantage of our initial consultation and contact us today.
Divorce Processes: Litigation, Mediation and Collaborative Divorce
If you have been thinking about divorce, or you are somewhere in the process of divorce already, the beginning of a new year is a great time to move things forward. Maybe you are wondering about mediation and want to know if it is a good option for you, but you are still not clear on how exactly it differs from other divorce processes. Read more
Peace Through Mediation
All of us at the Weinberger Mediation Center are wishing you peace throughout the holiday season. Whether you are in the middle of a divorce or are just beginning to think about separating, keeping things peaceful is one of the best things you can do for your own mental health. It is even more important if you have children.
Protecting children from parental conflict is important for all types of families, not just those going through divorce. While a certain degree of family conflict is normal, research shows that children who are exposed to prolonged conflict between their parents are at heightened risk of emotional and behavioral issues, such as poor concentration, depression, and anxiety. Coping with the pandemic over the past couple of years has been especially challenging for many families. The holiday season, while generally a happy time, is also well-known to be stressful. It is no surprise then, that many families are struggling with conflict.
Children and Divorce: Protecting Mental Health
Increased parental conflict is an especially pronounced issue for families going through divorce or separation. In January of 2021, yet another study confirmed this. The Research and Education Advancing Children’s Health (REACH) Institute, at Arizona State University, found that when divorced or separated parents engage in conflict, their children experience fear of abandonment. Even worse, this feeling is not necessarily transitory; it can predict future mental health problems. Strong relationships between children and parents, which generally act as a buffer against childhood stress, did not, in this study, mediate the effects of parental conflict. In fact, the study found that children who had strong relationships with their fathers were especially likely to experience mental health issues.
Choosing Mediation for Peace
Clearly parents would do well to make the pursuit of peace one of their top resolutions for the New Year. Mediation is one of the best ways to accomplish this. In the coming months, we will be reviewing some basics of divorce mediation. Along the way we will focus on keeping things peaceful and protecting the mental health of everyone in the family.
Divorce will always be challenging, but it does not have to be devastating. It can, in fact, pave the way for a brighter future for everyone. This future can start all the sooner when both spouses approach the divorce process with mutual respect and consideration.
If you are one of those lucky couples who are confident that you will be able to separate as friends and present a united front to your children, you are probably already pursuing mediation or at least considering it. If, on the other hand, you are doubting that you and your difficult soon-to-be-ex would make good candidates for mediation, you may want to reconsider that. Ultimately the process is not going to work for everyone. We will have plenty of tips, however, to help high conflict couples navigate their way through. If you are willing to put in the effort, there is a good chance of success.
Here’s to a wonderful new start. Happy New Year!
If you are ready to discuss mediation with one of our trained and experienced divorce mediators, contact us today for an initial consultation.
Holiday Parenting Agreements and Mediation
Many families are feeling hopeful that the holidays this year will look far more normal than last year. For divorced or separated parents struggling with parenting agreements, however, the stress may be higher than ever. If you are already pursuing divorce mediation, you can take comfort in knowing that you are in an ideal venue for working out holiday parenting plans. If you are not already in mediation, this could be a great time to start.
Essential Terms in Parenting Plans
Some newly separated parents may not be certain exactly what they want their long-term parenting plan to look like. If you are in this situation, you can make a temporary custody agreement that takes the current holidays into consideration. Be careful not to let the rest of your plan slide though. Sometimes parents agree to something like “joint custody,” “equal parenting time,” or “a 70/30 time split” and then leave out details in the interest of flexibility. While these agreements are a good start, certain terms are essential to include in every parenting plan. These include the general form of custody; how parents will share decision making; a schedule for time-sharing on weeknights, weekends, vacations, legal and religious holidays, birthdays, and other special occasions; and a description of how the schedule will change if there is a change of residence by either parent.
Beyond these basics, the level of detail you need will generally depend on how well you co-parent. You can refer to this post for more information about what to include. Even the most collaborative parents often want to provide more detail on religious upbringing and long-term holiday timesharing.
Holiday Parenting after Divorce
There are no rules about dividing holiday parenting time after divorce, and the beauty of mediation is that it allows parents to think out of the box. Some parents are so amicable that they spend part of certain holidays together. Others need to keep everything at arm’s length. Parents who live further apart generally need to divide up entire holidays or alternate years for different holidays. If this is the only practical solution for your family, building scheduled facetime into the plan can help. Part of a fresh start after divorce can also be establishing your own separate traditions.
Whether you live a few blocks or thousands of miles apart, and whether you plan to split holiday time or alternate holidays, there are certain details that are important to put into writing. Agreements should designate responsibility for drop-offs and pick-ups and times and places for exchanges. They should also specify every holiday covered and set a start and end time for each holiday, or for each part of a holiday spent with each parent. If children will be travelling, make sure to designate responsibility for making travel arrangements and paying travel expenses, as well as what travel Information is to be provided to the other parent and when. Most parents agree to share at least basic information such as flight or train times and numbers, hotel information and telephone contacts.
The most important thing is to focus on the spirit of the holidays and avoid turning negotiations into a competition for time with children. Moving from house to house over holidays can be stressful for children. Pay attention to their needs and try to make things as easy and fun for them as possible. Older children should be allowed to provide their own input into where they will spend time.
Considering Religious Practices
Since many religious traditions overlap with holiday planning, these are two areas that families usually address at the same time. This can be particularly sensitive for divorcing interfaith couples. Raising children in two different faiths can be challenging enough when everyone is part of the same household. Once couples separate, it can become even more difficult. One the other hand, there may be a benefit if parents can divide the holiday schedule to maximize the children’s time with each parent on their own important religious holidays.
Remember that the best interests of your children are most important. This means not putting children under excessive pressure to choose between different religious traditions, which could in effect lead them to feel that they are being asked to choose between their parents.
Religion and Child Custody in New Jersey
When creating an agreement on religious upbringing of children, there can be more at stake than just the holiday calendar. If parents have no agreement, or only an unclear agreement, a court resolving a dispute in this area would look at the overall custody arrangement. A parent with sole legal custody is the sole decision-maker on religious upbringing. In the much more common situation where parents have joint legal custody, the primary caretaker – generally the parent with primary physical custody or more parenting time – has the right to make such decisions.[i]
If parents have joint legal custody and equal parenting time, a court may have to look at other factors. Avoiding this kind of ambiguity by designating a primary caretaker in the parenting agreement can prevent an expensive and time-consuming court process. Parents can also explicitly grant authority over religious upbringing to either parent.
Unless parents agree otherwise, only the parent with decision-making authority can enroll the children in religious education. The other parent, however, retains the right to take the children to religious services of that parent’s choice during parenting time. That parent also does not have to uphold the primary parent’s religious customs. For example, absent evidence of harm to the children, a non-custodial parent does not have to enforce a custodial parent’s religious dietary restrictions. [ii] While the custodial parent’s right to control the children’s religious upbringing takes precedence, courts cannot issue orders that unduly limit the secondary caretaker’s religious freedom.
Modifying Holiday Agreements
Even if you and your co-parent agree on how to divide the holiday parenting schedule during your separation and divorce, you may want to make changes later. Sometimes parents move farther away from one another. Even if travel is not an issue, schedules that work for young children may not work for older children. Religious and family traditions often remain a source of friction for many years. Whether you have an agreement you need to revise, or you never had a satisfactory agreement, post-judgment mediation can help.
If you and your co-parent would like to discuss negotiating your parenting plan with one of our trained mediators, contact us today for an initial consultation.
[i] Feldman v. Feldman, 378 N.J. Super. 83 (App. Div. 2005).
[ii] Brown v. Szakal, 212 N.J. Super. 136 (Ch. Div. 1986).
Domestic Violence and Mediating Divorce or Parenting Disputes
October is National Domestic Violence Awareness Month – a good time to review exactly what domestic violence (DV) is, how to recognize warning signs, and when couples with a history of DV may want to consider divorce mediation. Violence between romantic partners is also sometimes called intimate partner violence (IPV). This term can be more specific than domestic violence, which technically refers to violence between any household members. The term “violence” is also sometimes used as a catch-all to refer not only to physical violence, but also to psychological manipulation and abuse. The latter can be much more difficult to recognize than physical violence. Read more
How to Benefit from Brainstorming in Divorce Mediation
Today we will revisit the concept of “brainstorming” in divorce mediation and examine the conditions that support productive brainstorming sessions. To “brainstorm” is to throw every possible solution to a problem at the wall (or at least onto a whiteboard) and see what sticks. This requires adopting a “no idea is a stupid idea” mindset. Even ideas with no chance of success sometimes contain the seed of an idea that will be very successful. Read more
Parents and Intimate Partner Violence: Benefits of Mediation with Safety Protocols
A recent study of family law cases involving high levels of intimate partner violence (IPV) between parents found that shuttle mediation and videoconference mediation, when carried out by well-trained staff in a protected environment and designed with strong safety protocols, showed several advantages over litigation. The term “intimate partner violence” refers to violence between romantic partners, who may or may not be living together. It is similar to “domestic violence,” but there is a distinction between the terms, as the latter refers to violence between household members. Household members could be spouses or romantic partners, but they could also be children, siblings, or even roommates. Read more
Can Divorce Mediation Lead to Reconciliation?
Not long ago, Soompi reported that the popular South Korean actress and K-pop singer, Hwang Jung Eum, had filed for divorce from her golfer/businessman husband, Lee Young Don. According to a July 9th report in allkpop, however, the couple attended divorce mediation and are now reconciling. This is happy news, and it may lead other people to wonder if they too could achieve reconciliation through mediation. Read more
Educational Planning in Mediation
In our last post, we discussed a few aspects of estate planning that a couple with minor children and a relatively simple estate might want to address during divorce mediation. Today, we will continue looking at our example couple, Deena and Greg, as they consider educational planning for their two younger children, 14-year-old Brian and 12-year-old Lindsey.
As we previously discussed in College Planning and Mediation: Part I, there are circumstances under which divorced parents In New Jersey can be held responsible for funding post high school education for children. Educational expenses typically include tuition and fees, room and board, and books and supplies. Other associated costs include things like college prep exam fees and review courses, application fees, travel expenses for college visits and necessary and discretionary expenses during college (clothing, travel, entertainment, etc.). Absent an agreement between parents about how to cover costs, a court would apply the criteria set out in the 1982 case of Newburgh v. Arrigo.
If your children are young, it might seem like a better idea to wait and address this issue later. After all, many things can change over the years, and you already have plenty to worry about. Mediation, however, is an ideal forum for addressing parental contributions to children’s higher education expenses. Courts tend to uphold agreements between parents about contributions, as long as they are specific and clear. If college is still a few years away, you can write up an agreement that provides for an income-based cost sharing plan while leaving out specific dollar amounts. Putting your plan into your Marital Settlement Agreement (MSA) allows your attorneys to review it along with your other terms. You can also include a clause agreeing to return to mediation to refine the agreement later.
Educational Contributions and Parental Income
Deena and Greg currently have very similar incomes and plan to share parenting equally. They were happy therefore, to take child support off of their current list of concerns. Nevertheless, they should be prepared for the possibility that this might change. What if one of them gets a new job or starts a lucrative business during the next few years? At that point, the less financially well-off spouse might wish they had thought about college funding sooner. They might even want to change their mind about getting a child support agreement.
To get an idea of how New Jersey courts calculate child support for parents who share custody, Deena and Greg can look at the New Jersey Shared Parenting Worksheet. The first figure in the support calculation is “gross income.” This includes both earned and unearned income. Part C of the Family Case Information Statement (CIS) includes a more detailed breakdown of what income includes. As we have previously discussed, it is usually a good idea for couples in mediation to complete and exchange at least a rough draft of the CIS, even if, as in Greg and Deena’s case, their financial situation is pretty simple. Sometimes completing the CIS reveals things that no one previously considered. Other times it simply ensures that all income and assets are taken into account.
Although the New Jersey child support guidelines do not apply to children who are in college and not living at home, they can provide insight into how parents might set up an agreement for income-based college contributions. The next step will be to decide how to budget for the planned contributions. The parents can then incorporate the contribution agreement into their MSA.
Funding Higher Education for Children
Deena and Greg do not currently have any savings designated for their children’s education. They do, however, have good salaries and well-funded retirement accounts. Greg has a traditional IRA and Deena has a 401k. In some cases, it is possible to use retirement accounts for educational expenses. Withdrawals from both traditional and Roth IRAs before age 59 ½ that are used for qualified higher education expenses are not subject to the usual 10% early withdrawal penalties. They are, however, still subject to income taxes. Qualified expenses generally include tuition, fees, books, necessary supplies and equipment, and room and board for students enrolled at least half time in a degree program.
There are, of course, downsides to using retirement funds for education, the most obvious of which is that the funds would no longer be available for retirement. It is also only IRAs that can be used in this way. Deena’s 401k would not qualify. It might be possible for her to borrow from her vested balance in the 401k to pay for college expenses. Before considering this option though, she should discuss the financial impacts with a financial advisor. Pursuing other student loan options will usually be a better choice.
Another option that is usually better than dipping into retirement savings is opening 529 plans. Although it would have been ideal for them to begin earlier, Greg and Deena still have time to do this. Each parent could open an account for each child and fund the accounts on a regular basis going forward. Any loans or retirement withdrawals would then be only back-up options. If the parents can agree on how much each of them will contribute, they can coordinate setting up the plans with the rest of their asset distribution in divorce.
Including Children in College Planning Discussions
Deena and Greg should also decide how and when to include their children in college planning discussions. Brian will be old enough for that within a couple of years. Lindsey is still young, but because of her disability, her future education may require earlier and more extensive planning. Parents often want children to understand that there is a “cap” on how much they will be able to contribute. The earlier they make this clear, the less likely a child is to become excited about possibilities that do not make sense financially. If children may need to work part time or take out loans themselves, that is another important topic of discussion.
Deena and Greg decide to build future college planning meetings into their MSA. They set three dates, the first for a meeting between the two of them, and the second and third for meetings between both parents and each child. They also agree to add additional meetings with a mediator if necessary to resolve any disagreements. A tentative checklist of topics for the meetings includes the following:
For more detailed information on college planning and mediation, including more on the list of topics to address, see: College Planning and Mediation: Part II.
If you and your spouse or former spouse would like to discuss educational planning for children and mediation with one of our experienced family mediators, take advantage of our initial consultation and contact us today.
Minor Children and Estate Planning in Divorce
In our last post, we looked at how a couple with a complicated estate and grown children could incorporate estate planning into their divorce mediation. In this post, we will look at how a couple with minor children and a simpler estate can consider both estate planning and educational planning as they attempt to settle their divorce.
Deena and Greg have three children, ages 22, 14 and 12. Both parents have similar incomes and plan to share parenting time of the two younger children equally. They are not, therefore, particularly concerned about child support. They are, however, interested in planning for 14-year-old Brian’s and 12-year-old Lindsey’s future education expenses. 22-year-old Molly has already completed college with very little student debt, and they would like Brian and Lindsey to be able to do the same someday. They also have a special concern for Lindsey, who has a visual impairment resulting from premature birth.
Neither Deena nor Greg has any kind of estate plan. Their only substantial assets are a marital home, which they plan to sell, and their retirement accounts, which they fortunately have funded well up to this point. Greg has a traditional IRA and Deena has a 401k. They are concerned not only with their children’s educations, but also their long-term futures, and they are wondering what would happen to these accounts if either of them was to pass away after their divorce. They decide to talk about estate planning first, and then consider how to address educational planning.
Estate Planning Basics
Greg and Deena’s mediator is an experienced family law attorney who also handles estate matters. She advises them that some aspects of estate planning can be coordinated with marital settlement negotiations, while others cannot. She outlines some of the basics for them, including the following:
Intestacy Laws
Once their divorce is final, they will no longer automatically inherit anything from each other under New Jersey intestacy laws. They will also cease to be the beneficiaries of each other’s retirement accounts.
Minor Children and Inheritances
If they do not make separate estate plans after the divorce, and either of them passes away without remarrying, then the children would inherit everything from that parent. Because minors cannot be direct beneficiaries of assets (including so-called “non-probate” assets like retirement accounts), the other parent, as legal guardian, would manage funds for any child still under the age of 18. If the other parent is no longer living, the court would appoint a guardian.
Remarriage
If Deena remarries, her new spouse will automatically become her 401k account beneficiary unless the spouse signs a waiver. This is not something that Greg and Deena can provide for in a Marital Settlement Agreement as it requires the future consent of a third party. This automatic rule does not apply to IRA’s. If Greg remarries, he can continue to designate the children as beneficiaries.
Wills and Guardianship Designations for Minor Children
Wills would not apply to non-probate assets but would allow Deena and Greg to direct distribution of other assets as well as to designate alternate guardians for Brian and Lindsey in the event that the other parent predeceases them.
Living or Testamentary Trusts
Greg and Deena can also consider establishing one or more trusts for the benefit of the children. Either a living trust, or a testamentary trust established under a will, might be appropriate. Trusts have designated administrators (trustees) who manage trust assets for beneficiaries. A trustee could disburse assets to the children periodically. Trusts can also protect assets from creditors. This can be helpful for parents with minor or young adult children and critical for parents with special needs children. Special needs trusts can protect social security disability payments and provide support to a disabled child or adult. It is possible to name a trust as the beneficiary of a retirement account. It is important, however, to first understand the full financial ramifications of such a decision. Both a financial advisor and a trusts and estates attorney can be helpful in this regard.
Life Insurance to Protect Minor Children
Either or both parents can also take out life insurance policies for the children. Life insurance can protect children from potential loss of a parent’s support. This is one of the simplest and most popular options for estate planning during divorce.
Coordinating Estate Planning with Educational Planning for Minor Children
Deena and Greg feel that in their case, estate planning must be intertwined with educational planning for Brian and Lindsey. They therefore decide to move on to discussing educational issues before making any decisions. As their mediator has told them, there are circumstances under which divorced parents in New Jersey may be held responsible for funding post high school education for children. Divorce mediation is therefore a good forum for them to work out any disagreements about future plans. Courts tend to uphold agreements between parents about college education contributions, as long as they are specific and clear. The wording of an agreement is integral to its enforcement, so attorney review before finalization is critical. In our next post, we will look at some of things Greg and Deena will want to keep in mind.
If you and your spouse or former spouse would like to discuss either estate planning or educational planning in divorce with one of our experienced family mediators now, take advantage of our initial consultation and contact us today.
Estate Planning in Divorce Mediation
Couples going through divorce mediation often wish to consider financial matters beyond immediate spousal or child support and property division. Two issues that commonly come up are college planning and estate planning. Not only can such issues impact divorce negotiations, but many divorcing couples are approaching them for the first time and will benefit from the support of a mediator during the process. Even if you already have an estate plan, you will generally need to revise it during divorce. Read more