PREPARATION OF
PENDENTE LITE APPLICATIONS

Presented By:

Charles F. Vuotto, Jr., Esq.
Wilentz, Goldman & Spitzer
90 Woodbridge Center Drive
P.O. Box 10 Woodbridge, NJ  07095-0958
Telephone: (732) 855-6014
Facsimile: (732) 726-6535

2000

INTRODUCTION

                        It is very often the case that the results of a pendente lite application in a matrimonial litigation will set the tone for the rest of the case and may very well affect the ultimate outcome.  If an unequal or unfair result occurs early on in the case, it could spell disaster to one party.  It is usually through pendente lite motions that the judge who will likely be assigned to the matter, will first become familiar with the parties.  This will also be the first time that the judge will learn the critical facts regarding the parties’ marriage, separation, children and other critical facts relevant to the dissolution proceedings.  This first impression is one of the most critical aspects of any matrimonial litigation. 

APPLICABLE RULES

                        It can never hurt to review some of the applicable Family Part Rules of Court that control matrimonial matters.  Here is a summary of some key rules that are particularly relevant to pendente lite motions:

·          R. 5:3-5                 Attorney Fees & Retainer Agreements

·          R. 5:3-7                 Remedies for Violation of Orders for Parenting Time, Alimony or Support

·          R. 5:5-2                 Case Information Statements

·          R. 5:5-4                 Motions in Family Actions

·          R. 5:6A                  Child Support Guidelines

·          R. 5:6B                  Cost-of-Living Adjustments for Child Support Orders       

                        A brief review of these rules will assure that the requirements of a pendente lite motion are met (e.g., page limts under R. 5:5-4(b), filing due dates under R. 5:5-4(c) and Notice requirements under R. 5:5-4(d)).

CASE INFORMATION STATEMENTS  

                        Remember, with few exceptions, R. 5:5-2 requires that a Case Information Statement be filed in every contested family action within 20 days of the filing of an Answer or Appearance.  The CIS must follow the form in Appendix V of the Rules.  Parties must amend their CIS’s as facts change.  Therefore, there are very few instances, if any, when it is not appropriate to attach a completed CIS to apendente lite motion.

CONTENTS OF PENDENTE LITE MOTIONS

                        Although the contents of a pendente lite motion are fact sensitive and will change from case to case, there are certain common themes that are routinely seen.  It is good to know the general areas that may be addressed in such a motion so that they are not forgotten when preparing your application.

·          Temporary Custody and Time Sharing Issues;

·          Restraints on the dissipation of assets;

·          Payment of direct expenses for Shelter (Schedule “A”) and Transportation (Schedule “B”);

·          Direct Support (Alimony and/or Child Support)  (Don’t forget to address the taxability of any alimony or unallocated payments);

·          Maintenance of medical and life insurance;

·          Payment of unreimbursed health care costs;

·          Payment of marital liabilities;

·          Sole possession of marital home;

·          Sole possession of certain vehicle(s);

·          Maintenance of other assets (e.g., rental or shore properties);

·          Production of discovery (if requirements of R. 1:6-2(c) have been met);

·          Appointment of Experts and Payment of their fees

·          Counsel Fees (both as to the motion and a pendente lite award)

                        Although this is certainly not an exhaustive list, it will certainly provide a fine outline around which a comprehensivependente lite motion may be prepared.

MARITAL HISTORY

                        Before an attorney can effectively represent a party in a divorce action, it is critical that he or she know as much as possible about the parties, their relationship, children, assets, liabilities and interactions with each other and other people.  Certainly, an effective pendente lite application cannot be prepared unless the attorney is adequately educated as to all relevant facts concerning the client.  In order to educate the attorney, a “Marital History” should be prepared with the client.  This, in conjunction with the statutory factors and Marital Lifestyle to be more fully detailed below, will provide an extensive amount of information to the attorney to allow him or her to effectively represent the client in all aspects of the matrimonial litigation including, but not limited to a pendente lite application.  Attached hereto as Exhibit “A” is an outline which can be used in preparing such a Marital History with the client.

STATUTORY FACTORS

                        Since this is the first time that a client will have what he or she perceives as an opportunity to tell his or her side of the story to the court (other than the Complaint or Answer and Counterclaim), there is a tendency on the part of attorneys, paralegals and clients to infuse pendente lite applications with unnecessary emotional and irrelevant issues.  In light of recent changes in the Rules of Court imposing page limitations, such irrelevancies have been eradicated out of necessity.  However, whether or not you are able to fit a client’s emotional outpouring into the page limitations, it should be avoided.  Rather, in its place, emphasis should be placed on the statutory factors that a court will ultimately need to consider if the matter is tried.  It is these statutory factors which should be the focus of initial client interviews and pendente lite certifications.  Attached hereto is a useful checklist which can be utilized to gather all pertinent information with regard to the statutory factors relative to custody, equitable distribution, alimony and child support.  (Exhibit “B”).

                        Judges are huge fans of the saying “less is more”.  Although it is often difficult to avoid the temptation to throw in everything but the kitchen sink, very often this will turn a judge off.  Rather than pages and pages of text, judges are more swayed by cold hard facts backed up by supporting documents and other proofs. 

MARITAL LIFESTYLE

                        Over the last two decades, the Marital Lifestyle has been a critical issue in any divorce case.  The most recent pronouncement from our Supreme Court embodied in the case of Crews v. Crews, 164 N.J. 11 (2000), decided May 31, 2000, has emphasized it’s importance.  As one of the most commonly cited factors, the “marital lifestyle” must be given special attention, both in terms of information gathering with the client at the initial stages of the litigation and in the preparation of the pendente lite application. 

                        It is often difficult to address the “marital lifestyle” in the abstract.  Although people may say they have a high, moderate or low lifestyle, that really does not give a court enough to go on and does not adequately and effectively communicate how the parties lived.  It is necessary to breakdown the components of the parties’ lifestyle to effectively convey how they lived.  In doing so, there are various categories of expenditures of everyday life that should be considered.  Each and every one may not be applicable in every case.  However, the client should be questioned about these categories to see if they apply, and, if so, a narrative description should be prepared. 

·          Marital residence

·          Vacation Homes

·          Other real estate or real property investments

·          Improvements to real estate

·          Extent of savings in bank or investment accounts

·          Extent of automobiles, boats, planes, motorcycles or other vehicles or recreational crafts

·          Extent of vacations

·          Extent of furs and jewelry

·          Nature of stores frequented

·          Country clubs

·          Extent of entertainment, including, but not limited to: gambling, sports and hobbies, restaurants, theatre, movies and the like

·          Extent of gifts

·          Extent of service providers such as household help, gardeners, maintenance personnel and the like

·          Nature, extent and value of household furniture and furnishings, including collectibles and artwork

·          Children’s expenses, including but not limited to private school, camps, tutoring or extracurricular activities

·          Available cash

·          Available free time

·          Personal expenses run through a business

·          Pets[1]

 

                        If the issue of the parties’ lifestyle is a hotly contested issue, it may be appropriate to retain an accountant to perform a lifestyle analysis.  Various methods for communicating the parties’ lifestyle to adverse counsel and the court are explored in an article written by myself and Carl D. Gensib, C.P.A., Esq., a forensic accountant, which is attached hereto as Exhibit “C”.

                        Only after the marital lifestyle is appropriately considered can a Case Information Statement be effectively prepared. Although this presentation will not delve into the preparation of the Case Information Statement and the Child Support Worksheet, since that justifies its own seminar, it is important to note that the lifestyle analysis, if done properly, will effectively support the figures in an accurate Case Information Statement.

CUSTODY

                        Although this presentation will not address the complexities of a custody case, when standard time sharing and related issues are in dispute between the parties and raised in a pendente lite motion, an effective tool for assisting the court is a detailed Parenting Plan.  Although we all know that Parenting Plans are to be filed pursuant to R. 5:8-5, unfortunately this requirement is not often met. Nonetheless, when timesharing and related issues are raised in pendente lite applications, submission of a proposed Parenting Plan as part of the form of order may allow the court to adopt the proponent’s plan if it is reasonably and fairly presented.  A sample of Parenting Plans is attached hereto and marked as Exhibit “D”.

AFFIDAVIT OF ATTORNEY SERVICES

                        Very often, although very dear to the heart of all attorneys, the issue of counsel fees is given short shrift in pendente liteapplications.  More importantly, counsel very often fail to file the requisite Affidavit of Services.  If they do file such a document, it usually gives only the amount of time expended on the motion and the hourly rate of the attorney, plus disbursements.  Many counsel fail to include in their Affidavits of Attorneys Services the factors required by R. 4:42-9 and R.P.C. 1.5(a).  Every Affidavit of Services should include the following information:

1.  Time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal services properly;

2.  The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyers;

3.  The fee customarily charged in the locality for similar legal services;

4.  The amount involved and the results obtained;

5.  The time limitations imposed by the client or by the circumstances;

6.  The nature and length of the professional relationship of the client;

7.  The experience, reputation and ability of the lawyer or lawyers performing the services;

8.  The terms of the retainer agreement (with the retainer agreement attached as Exhibit A to the affidavit of services);

9.  The amount of the allowance applied for;

10.  An itemization of disbursements for which reimbursement is sought;

11.  If reimbursement is sought for services by para professionals, the affidavit should include a detailed statement of the time spent and services rendered by the para professionals, a summary of the para professionals’ qualifications, and the attorney’s billing rate for para professional services to clients generally;

12.  All applications for the allowance of fees shall state how much has been paid to the attorney (including the amount, if any, received by the attorney from pendente lite allowances) and what provision, if any, has been made for the payment of fees to the attorney in the future.

                        It is this writer’s position that the retainer agreement that must be executed by all matrimonial clients should be attached as Exhibit “A” to the Attorney’s Affidavit of Services.  Further, the bills that have been rendered to the client (appropriately redacted to exclude any privileged material) should be attached as Exhibit “B” to any such Affidavit of Services.

                        The paralegal will note that many of the items to be referenced within the affidavits of service can only be completed by the attorney.  Some of the above factors are case specific while others will be utilized with every Affidavit of Services that the paralegal does for any one particular attorney.

                        It is critical to note that no portion of any fee allowance claimed for attorney’s services shall duplicate in any way the fees claimed by the attorney for para professional services rendered to the client.  R. 4:42-9(b).  For purposes of this Rule “para professional services” shall mean those services rendered by individuals who are qualified through education, work experience or training who perform specifically delegated tasks which are legal in nature and under the discretion and supervision of attorneys and which tasks an attorney would otherwise be obliged to perform.”  Id.

                        Remember, an allowance of fees made on a determination of the matter shall be included in the judgment or order stating the determination.  Therefore, do not forget to attach a proposed form of order to a pendente lite application and provide for a separate item leaving a blank so that the court may fill in the amount of the fees if the court is intending to make such an award.

CONCLUSION

                        If the above guidelines are followed with the assistance of the attached guidelines, it is very likely that the court will be provided with all relevant information to permit it to make an appropriate and fair award to the benefit of your client.  Although gathering and presenting all relevant facts does not guarantee the result that the client may wish, you can be assured that if these procedures are routinely followed, your client will be given the best chances of achieving his or her goals during the pendente lite stages of the divorce litigation.

EXHIBIT A

 MARITAL HISTORY

 

                        We also ask that you prepare, separate from the above document, a marital history.  It is necessary that you provide this marital history in order to prepare your complaint for divorce or appropriate responsive pleading, and in order for us to know the relevant issues that exist between you and your spouse.  We ask that you please provide a narrative on the following topics:

                        1.  Educational backgrounds of you and your spouse.

                        2.  The medical history and present medical condition of you, your spouse, and your children (if applicable).

                        3.  The employment history of you and your spouse including present employment.  Provide the periods of employment, nature of employment, and the amounts earned.

                        4.  The circumstances surrounding your meeting (engagement and eventual marriage).  This should include the date and location of your marriage, and whether it was a religious or civil ceremony.  This could also include when you began to cohabit together, if applicable.

                        5.  A chronological narrative of the events leading to the breakdown of the marriage.  This is necessary in order to determine the basis for a cause of action for divorce.

                        6.  A summary of any inappropriate behavior and/or actions committed by your spouse.  (This can include such things as emotional, verbal, or physical abuse, personal or financial misdeeds:  frauds, crimes; etc.)

                        7.  Indicate whether or not either of you were previously married, to whom, the length of the said marriage, and how it was terminated.  Please indicate whether either of you have children of previous marriages.

                        8.   Detail all background data and any major concerns relative to the children of the present marriage, including their birth, dates of schooling, and any physical or mental health issues.

                        9.  Provide all relevant work and home telephone numbers of you and your spouse.

                        10.  Provide the names of all accountants or other professionals which have been retained by you or your spouse; or with which your spouse may have a working relationship.

                        11.  Provide a chronological summary of your residences within the last two years.  This should include those  of your spouse.  This is necessary for completing the complaint for divorce and the determination of venue of this matter.

EXHIBIT “B”

CAUSE OF ACTION

 

Marriage and Children

1.  DATE OF MARRIAGE:     _____________

2.  LENGTH OF MARRIAGE: ____________

3.  CHILDREN:           ____________________

                               ___________________

                               _____________________

4.  DATE OF SEPARATION: __________

5.  DATE OF COMPLAINT:  __________

6.  PRESENT AGE OF PARTIES:                  Husband (__)
Wife (__)

7.  INCOME OF PARTIES:          Husband:  $___________ per year

                                            Wife:        $____________per year

Allegations of Extreme Cruelty

 

8.      

CUSTODY AND TIMESHARING

 

a.         Status Quo

 

9.     

 

b.         Mental Health and Fitness of Each Parent

 

10.     

 

c.         Mental Health of Child

 

11.     

 

d.         Stability of Home Environment

 

12.     

 

e.         Physical Environment of Each Party

 

13.     

 

f.          Age and Physical Health of the Parties

 

14.     

 

g.         Criminal History of Either Parent or Cohabitant

 

15.     

 

h.         Ability to Provide Social Development

 

16.     

 

i.          Ability to Provide Religious Development

 

17.     

 

j.          Ability to Provide Intellectual Development

 

18.     

 

k.         The Parents’ Ability to Agree, Communicate and Cooperate on Matters Relating to the Children

 

19.     

 

l.          The Parents’ Willingness to Accept Custody and Any History of Unwillingness to Allow Visitation, Unless Such Unwillingness Was Based on Substantiated Abuse

 

20.     

 

m.       The Interaction and Relationship of the Children With Their Parents and Siblings

 

21.     

 

n.         Any History of Domestic Violence

 

22.     

 

o.         The Safety of the Children and the Safety of Either Parent From Physical Abuse From the Other

 

23.     

 

p.         The Preference of the Children When They Are of Sufficient Age and Capacity to Form an Intelligent Decision

 

24.     

 

q.         The Needs of the Children

 

25.     

 

r.          The Quality and Continuity if the Children’s Education

 

26.     

 

s.         The Geographical Proximity of the Parents’ Homes

 

27.     

 

t.          Smoking By Either Party of Member of That Parents’ Household

 

28.     

 

u.         Other Members of the Household and Their Influence on the Child

 

29.     

 

EQUITABLE DISTRIBUTION

 

a.         The Duration of the Marriage

 

30.     

b.         The Age and Physical and Emotional Health of the Parties

31.     

c.         The Income or Property Brought to the Marriage by Each Party

 

32.     

 

d.         The Standard of Living Established During the Marriage

 

33.     

 

e.         Any Written Agreement Made by the Parties Before or During the Marriage Concerning an Arrangement of Property Distribution

 

34.     

 

f.          The Economic Circumstances of Each Party at the Time the Division of Property Becomes Effective

 

35.     

 

g.         The Income and Earning Capacity of Each Party, Including Educational Background, Training, Employment Skills, Work Experience, Length of Absence From the Job Market, Custodial Responsibilities for Children, and the Time and Expense Necessary to Acquire Sufficient Education or Training to Enable the Party to Become Self-Supporting at a Standard of Living Reasonably Comparable to That Enjoyed During the Marriage

 

36.     

 

h.         The Contribution by each Party to the Education, Training or Earning Power of the Other

 

37.     

 

i.         The Contribution of Each Party to the Acquisition, Dissipation, Preservation, Depreciation or Appreciation in the Amount or Value of the Marital Property, as Well as the Contribution of a Party as a Homemaker

 

38.     

 

j.          The Tax Consequences of the Proposed Distribution to Each Party

 

39.     

 

k.         The Present Value of the Property

 

40.     

 

l.          The Need of a Parent Who Has Physical Custody of a Child to Own or Occupy the Marital Residence and to Use or Own the Household Effects                                                                                  

 

41.     

 

m.        The Debts and Liabilities of the Parties

 

42.     

 

n.         The Need for Creation, Now or in the Future, of a Trust Fund to Secure Reasonably Foreseeable Medical or Educational Costs for a Spouse or Children

 

43.     

 

o.         The Extent to Which a Party Deferred Achieving Their Career Goals

 

44.     

 

p.         Any Other Factors Which the Court May Deem Relevant

 

45.     

 

ALIMONY

 

a.         The Actual Need and Ability of the Parties to Pay

 

46.     

 

b.         The Duration of the Marriage

 

47.     

 

c.         The Age, Physical and Emotional Health of the Parties

 

48.     

 

d.        The Standard of Living Established in the Marriage and the Likelihood That Each Party Can Maintain a Reasonably Comparable Standard of Living

 

49.     

 

e.         The Earning Capacities, Educational Levels, Vocational Skills, and Employability of the Parties

 

50.     

 

f.          The Length of Absence From the Job Market and Custodial Responsibilities For Children of the Party Seeking Maintenance

 

51.     

 

g.         The Time and Expense Necessary to Acquire Sufficient Education or Training to Enable the Party Seeking Maintenance to Find Appropriate Employment, the Availability of the Training and Employment, and the Opportunity for Future Acquisitions of Capital Assets and Income

 

52.     

 

h.        The History of the Financial or Non-Financial Contributions to the Marriage by Each Party Including Contributions to the Care and Education of the Children and Interruption of Personal Careers or Educational Opportunities

 

53.     

 

i.          The Equitable Distribution of Property Ordered and Any Payouts on Equitable Distribution, Directly or Indirectly, Out of Current Income, to the Extent This Consideration is Reasonable, Just and Fair

 

54.     

 

j.          Any Other Factors Which the Court May Deem Relevant

 

55.     

CHILD SUPPORT

Child Support Guidelines Assumptions

56.   

EXHIBIT “C”

THE “LIFESTYLE ANALYSIS”

By
Charles F. Vuotto, Esq.
and
Carl D. Gensib, CPA, Esq.
Preliminary Statement

 

            With the coming of the most recent pronouncement from our Supreme Court embodied in the case of Crews v. Crews, 164 N.J. 11 (2000), decided May 31, 2000, the requirement that litigants, matrimonial attorneys and family court judges know, appreciate and appropriately consider the “marital lifestyle” has risen to an all time high.  The CREWS decision essentially requires a “baseline” for the support structure to be set.  There are two critical aspects of that baseline: (1) Income upon which support was based and (2) marital lifestyle.  The obligation for a trial court to make a finding of the “marital lifestyle,” even in a settled case, creates a universal need for a uniform approach to analyzing the “marital lifestyle” and conveying that lifestyle to one’s adversary and, ultimately, to the court.  This article will suggest three methods of presenting the necessary baseline, including the “marital lifestyle”, in the course of a matrimonial action from settlement to uncontested hearing or trial.

A Brief History of “Lifestyle”

            As we know, the CREWS decision has made it clear that, in a post judgment application to modify alimony, the court must determine whether the supported spouse can maintain a lifestyle that is reasonably comparable to the standard of living enjoyed during the marriage.  Id at 17  The Supreme Court stated that “identifying the marital standard of living at the time of the original divorce decree, regardless of whether a maintenance order is entered by the court or a consensual agreement is reached, becomes critical, then, to any subsequent assessment of changed circumstances when an adjustment to alimony is sought.” Id at 25.  It is clear from Lepis[2] and its progeny that motion courts have found that the marital standard of living is an essential component in the changed circumstances analysis when reviewing an application for modification of alimony. Id  The Supreme Court then clarified that the procedures to be implemented at the time a settled case is put through as follows:

“accordingly, lest there be an insufficient record for the settlement, the court should require the parties to place on the record the basis for the alimony award including, in pertinent part, establishment of the marital standing of living, before the court accepts the divorce agreement.”  Id at 26. 

Further complicating the job of matrimonial attorneys and judges, the court further noted that reliance upon the Case Information Statement (CIS) will not be sufficient.  The court reasoned that since such documents generally “reflect a more current financial picture of the parties,” they do not reflect the standard of living enjoyed during the marriage.  Therefore, that information is not a substitute for the party’s stipulation  [or testimony] on the marital standard of living.  Id

            The need to determine the marital standard of living was also discussed in last year’s Appellate Division case of Carter v Carter 318 N.J. Supra 34 (App.Div. 1999).  In Carter, the Appellate Court addressed the issue of whether a dependant spouse could seek alimony after the rehabilitative alimony had expired.  Additionally, the court addressed the issue of what special procedure would be required to be employed by a trial court entering a judgement of divorce, whether settled or tried, when rehabilitative alimony was involved.  The Appellate Court found that by statute, trial courts must make specific findings on rehabilitative alimony, even in cases where a settlement is obtained.  When granting rehabilitative alimony or when endorsing a rehabilitative alimony provision where rehabilitative alimony is a negotiated term of a Property Settlement Agreement, the Appellate Court mandated that trial judges examine each party as to the parties’ comprehension of the rehabilitative alimony provision including but not limited to

 

(A) the reasons for rehabilitative alimony;

(B) the standard of living which existed during the marriage;

(C) the dependent spouse’s rehabilitation goals, and

(D) whether the parties contemplated the continuation of alimony beyond the end of the term of rehabilitative alimony.[3] 

 

This is especially needed where one of both of the parties may incorrectly believe that the duty to pay alimony will conclude at the end of the rehabilitative alimony.  The Carter court reasoned that the lack of testimony on the topic of rehabilitative alimony at the divorce proceeding places a motion judge presiding at an ensuing change of circumstances hearing at a disadvantage in reconciling the needs of each party as of the date of the change of circumstances motion with the needs of each party as of the date of the divorce.  As in  CREWS, a “baseline” was viewed as critical.  Just as our Supreme Court has recently done, the Carter Appellate Court found that when determining whether or not to modify alimony, the “overriding equitable consideration is a determination of whether the former marital standard of living is being maintained.” Id et 46.

 

Methods to Present Lifestyle

 

            We propose three basic ways to present the marital lifestyle to your adversary and, ultimately, to a court at the time of trial or an uncontested hearing.  Ideally, the most efficient and cost effective method, is to enter into an “Income & Lifestyle Stipulation”.  When that fails, there are generally two alternative methods to present lifestyle.  The first is a narrative with little documentary back-up.  The last and preferable method, is a comprehensive “Lifestyle Analysis” by a qualified forensic accountant.

I.  Agreement as to Baseline via the “Crews Stipulation”

            There may be situations where the parties can agree to the essential baseline elements required by CREWS.  In such situations, it is proposed that a uniform form of stipulation be used to work toward and present an agreement on the baseline.  Such a form of stipulation should address the categories of expenditures of everyday life.  These categories can include, but may not necessarily be limited to the following:

 

–                     Marital residence

–                     Vacation Homes

–                     Other real estate or real property investments

–                     Improvements to real estate

–                     Extent of savings in bank or investment accounts

–                     Extent of automobiles, boats, planes, motorcycles or other vehicles or recreational crafts

–                     Extent of vacations

–                     Extent of furs and jewelry

–                     Nature of stores frequented

–                     Country clubs

–                     Extent of entertainment including but not limited to: gambling, sports and hobbies, restaurants, theatre, movies and the like

–                     Extent of gifts

–                     Extent of service providers such as household help, gardeners, maintenance personnel and the like

–                     Nature, extent and value of household furniture and furnishings, including collectibles and artwork

–                     Children’s expenses, including but not limited to private school, camps, tutoring or extracurricular activities

–                     Available cash

–                     Available free time

–                     Personal expenses run through a business

–                     Pets[4]

 

            Each of the foregoing may or may not be applicable in every case.  Further, there may be additional items that may be required. Nevertheless, if a matrimonial litigant opines as to the majority of these topics it will have a significant impact in conveying the marital standard of living or lifestyle.

            A proposed form of stipulation to embody the parties’ understanding of the “baseline” is attached to this article.  Ultimately, this “Crews Stipulation” can be offered as “J-2” into evidence, after the Property Settlement Agreement.  Obviously, the form attached is very broad and every aspect thereof may not be applicable in every case.  However, it provides a general outline for constructing and tailoring a stipulation that will be right for any particular case.

            It is critical to note that the fact that parties may not be able to agree on all values or aspects of the baseline should not eliminate the ability to enter into a “Crews Stipulation”.  In such situations, a range of values can be inserted into the stipulation thereby giving a general sense of lifestyle, even though a precise value is in dispute.  In other words, whether the parties lived in a $1.5 million house versus a $1.9 million house, doesn’t change the fact that they were living a high lifestyle.  This will still be of great service to a judge years later if a post-judgment to modify support motion is filed.

            If such a uniform stipulation were adopted, it would provide much assistance with the every day problems facing matrimonial judges and practitioners in light of the mandates issued by our Supreme Court 

II.  Narrative Approach

            When no stipulation can be reached, the simplest method of presenting the “marital lifestyle” (whether to the attorney for the other spouse or a judge at the time of a trial or uncontested hearing) is in a narrative form.  There may be little or no documentary backup with this approach.  The narrative can track the items referenced in the proposed “Crews Stipulation” herein submitted.

III.  Lifestyle Report by Accountant

            Where a stipulation cannot be reached and the narrative approach is insufficient, the lifestyle must be adequately analyzed and presented.  In such instances, an analysis by a forensic accountant who has reviewed all of the spending records of the parties including but not limited to checks, cash withdrawals from bank or investment accounts, and credit card expenditures over a period of years prior to the parties’ separation or filing of complaint for divorce (whichever first occurs) will be very effective in presenting the “marital lifestyle”. 

                        The first step of a lifestyle audit is to compile all documentation containing the expenditures of the parties.  Such documentation normally consists of checking account records and credit card statements for a three year period prior to the parties’ separation or filing of complaint for divorce (whichever first occurs).  The accountant will then review every check, credit card transaction and/or debit card transaction so that they may be categorized.  The categories presented should mirror those appearing in a standard Case Information Statement “CIS”.[5]  In other words, the format of the analysis of the three years prior to separation (as well as the “reconstructed” budget) should be broken down among Schedule A, Shelter Expenses; Schedule B, Transportation Expenses; and Schedule C, Personal Expenses.  The product of this procedure is a schedule in the lifestyle audit report presenting a three year comparison of expenditures utilizing the CIS format.  The three year analysis will include all spending by both parties for themselves and their children.

                        Once total expenditure levels for a three year base period have been identified, a “reconstructed” marital lifestyle budget for the dependent spouse and children (as applicable) can be prepared.  Beginning with Schedule A; Shelter and its first category mortgage payments and proceeding down each category of Schedules A, B and C a determination must be made as to the appropriate level of expense to be inserted into various categories of the marital lifestyle budget.  In preparing the budget many issues must be addressed, some of which will require input from the matrimonial attorney.  These issues include, but are not limited to the following:

            Current Actual Expenditures – Certain budgetary expense categories are easily determined based upon current actual expenditures. A mortgage payment is a typical example of such a category.  In determining the appropriate expense level for a category such as mortgage payments, clearly the actual current expenditure level or the expenditure level just prior to the parties separation is appropriate as opposed to an average or modified average for the three year period presented.

            Averaging Expenditures – When dealing with discretionary expenditures, it is appropriate to use an average of the three years in developing an appropriate expense level.  Although the case law specifically states that the lifestyle is measured as of the date of separation, it is more credible at times, to use a three year average, unless circumstances justify using a longer or shorter period.  Examples of such expenditure which should typically be averaged are:  Repairs and Maintenance; Food, Restaurants, clothing, vacations, gifts, savings and entertainment.

            Modifying the Averages. Certain expenditure categories, although consistent throughout the three year period compiled, will require modification due to factors such as the following:

a.  Expenditures attributable to the supporting spouse must be eliminated.  Such expenditures will impact a variety of categories such as food, clothing, vacations, entertainment etc..  At times expenditure categories may have to be eliminated entirely if attributable directly to the supporting spouse.

b.  Expenditures paid directly by the supporting spouse.  Expenditures such as life insurance payments which appear in the three year comparison of expenditures but will be paid directly by a supporting spouse need to be eliminated in developing a lifestyle budget for the dependent spouse.

c.  Expenditures that will be effected by child sharing arrangements need to be adjusted if appropriate.  If the supporting spouse has significant periods of custody, expenditures for such categories as food and household supplies must be modified.

            Expenses Paid From a Business.  In certain situations, expenditures of the dependent spouse are paid directly from the supporting spouse’s businesses and therefore will not appear on the three year comparison of expenditures.  A common example is automobile expenses. In such cases, actual expenditures coming from the business must be quantified and added to the appropriate expense category.  Further, if a current vehicle is expected to reach it’s useful end soon, an estimated replacement expense should be inserted.

            Nonrecurring Expenditures.  Certain expense categories may include nonrecurring expenditures such as the installation of landscaping or renovations to a home.  The lifestyle budget may be adjusted for such nonrecurring expenses.

            Deferred Expenditures.  At times, the three years of comparative expenditures will not include a deferred expense such as a roof replacement or excess miles on an auto lease.  Such issues should be discussed with the client and the lifestyle budget adjusted accordingly.

            Cash Expenditures.  Cash expenditures may at times be difficult to categorize.  Such expenses should be reviewed with the clients and repetitive cash expenditures for such items as domestic help be appropriately classified.

            Elimination of Periods Presented.  Although it is suggested that the three year period prior to the date of separation or filing of the complaint (whichever first occurs) be utilized in developing a lifestyle analysis, at times, it may be necessary to eliminate a period because it is not indicative of the marital lifestyle.  This may occur because of excess expenditures or the minimization of expenditures in contemplation of divorce.  If the supporting spouse leaves the marital residence mid year this will effect total expenditure levels and therefore the usefulness of the information on lifestyle provided for that year.  Further, a supporting spouse may not be providing sufficient funds to a the dependent spouse or household, thereby artificially reducing expenditures.

            It should be noted that the departure of the sup­porting spouse from the marital residence for an extended period, prior to separation or the filing of the date of Complaint, can at times result in the best possible financial information for purposes of preparing a marital lifestyle budget report.  (Caveat:  This assumes that the supporting spouse is providing sufficient funds consistent with historic spending.)  With the supporting spouse out of the marital residence reductions in the various expense categories become clear.  Therefore, rather than having to make a subjective determination of the percentage of such items as food and household supplies attributable to the supporting spouse in determining the various expenditure levels in the marital lifestyle audit report, we have actual figures.  Under such circumstances, it may be best to utilize only the most recent one year period if it presents figures which only represent the lifestyle of the dependent spouse and children.

            Conclusion of Lifestyle Analysis.  After reviewing each expense category and taking the above-referenced issues and factors into consideration, the conclusion of the Lifestyle Audit should be presented once again utilizing the CIS format and presenting the marital lifestyle budget on an Annual and Monthly basis.  In this “reconstructed” budget, each expense category disclosed should be accompanied by a footnote indicating the manner in which the expense was derived, i.e., current actual expense level, three year average, etc.

                        Credibility is the key in performing a lifestyle audit.  The determination of certain expense categories involves, to a certain extent, subjective determinations.  Such determinations must be based upon reasonable presumptions after consultation with the client (and perhaps a meeting with both parties and their counsel) and a reasonable review of all available data.  The conclusion must be consistent with the facts and circumstances of the case in hand.

                        Finally, an important component to a lifestyle audit is the disclosure of the sources of the information presented.  The specific bank accounts, credit cards and account numbers should be clearly disclosed.  This will avoid situations in which the dependent spouse claims source expenditures were not included in the lifestyle audit and the results of the audit and spending levels understated.

CONCLUSION

            It is important to realize that presentation of marital lifestyle is not something that can wait until trial.  Adequately presenting the parties standard of living during settlement negotiations will significantly strengthen your position whether you are representing the supported or supporting spouse.

            The recent pronouncement from the Supreme Court has emphasized the need to adequately assess and present the “marital lifestyle” in the course of matrimonial proceedings.  Although there are many factors incident to an alimony award in a divorce case, “lifestyle” is arguably one of the most important.  Although it would be folly to believe that the marital standard of living is the only issue to address, it would likewise be folly to diminish its importance in the overall scheme of a divorce action.  Although the  narrative approach of presenting lifestyle is fine in many cases, it is herein submitted that in cases of significant income and net worth, it is prudent for the matrimonial attorney to retain the services of a qualified forensic accountant to perform the “lifestyle analysis”, in a manner similar to that presented herein, so that the parties, counsel and ultimately, the court, is fully aware of the full extent of the “marital lifestyle” that the parties enjoyed during the marriage so that a support award may be fashioned to allow each party to maintain a reasonably comparable lifestyles post divorce.

CREWS STIPULATION

AS TO

INCOME & LIFESTYLE

 

                        THIS STIPULATION made by and entered into this _____ day of ______________, 2000 by and between _____________, residing at __________________,, New Jersey _________, hereinafter referred to as the “Husband”, and ____________, residing at ____________________________, New Jersey, ________, hereinafter referred to as the “Wife”,

WITNESSETH:

                        WHEREAS, the parties hereto were duly married on ______________; and

                        WHEREAS,  the parties have or intend to enter into a comprehensive Property Settlement Agreement resolving all issues raised regarding their marital dispute, and

                        WHEREAS,  the parties acknowledge that their Agreement includes terms regarding alimony; and that the  decision ofCREWS v CREWS, 164 N.J. 11 (2000) requires a “baseline” to be set.  

                        WHEREAS,  The parties seek to submit this Stipulation as their compliance with the CREWS requirements by agreeing to that baseline in two respects: (1) Income upon which support was based and (2) lifestyle. 

 

I.  INCOME

            The parties agree that the current support structure of their Agreement, is based on the following current actual or imputed annual incomes:

HUSBAND:                 $________________ (actual/imputed)

WIFE:                       $_________________(actual/imputed)

            The parties further agree that they contemplate the following changes in their respective incomes:

HUSBAND:                 $________________

Explanation:_________________________________________

______________________________________________________

WIFE:                          $_________________

Explanation:_________________________________________

______________________________________________________

LIFESTYLE

            The parties agree to the following as to the marital lifestyle that they enjoyed during the marriage:

 

–                    Marital residence

–                     Vacation Homes

–                     Other real estate or real property investments

–                     Improvements to real estate

–                     Extent of savings in bank or investment accounts

–                     Extent of automobiles, boats, planes, motorcycles or other vehicles or recreational crafts

–                     Extent of vacations

–                     Extent of furs and jewelry

–                     Nature of stores frequented

–                     Country clubs

–                     Extent of entertainment including but not limited to: gambling, sports and hobbies, restaurants, theatre, movies and the like

–                     Extent of savings

–                     Extent of gifts

–                     Extent of service providers such as household help, gardeners, maintenance personnel and the like

–                     Nature, extent and value of household furniture and furnishings, including collectibles and artwork

–                     Children’s expenses, including but not limited to private school, camps, tutoring or extracurricular activities

–                     Available cash

–                     Available free time

–                     Personal expenses run through a business

–                     Pets

                        IN WITNESS WHEREOF, the parties have hereunder set their hands and seals the day and year written below their respective names.

SIGNED SEALED & DELIVERED

IN THE PRESENCE OF:

                                                                                                                                                           

as to Husband

 

DATED:____________________

 

                                                                                                                                                           

as to Wife

CHARLES F. VUOTTO, JR., ESQ.

 

Mr. Vuotto is a shareholder of the law firm of Wilentz, Goldman & Spitzer and was admitted to the Bar of the State of New Jersey and to the U.S. District Court of the District of New Jersey in 1986.  He was graduated from Seton Hall University with a Bachelor of Arts degree in 1983 and from Ohio Northern University, Claude W. Pettit College of Law, with the degree of Juris Doctor in 1986.  He is a member of the New Jersey State, Union and Middlesex County Bar Associations and a member of each association’s Family Law Section.  He was Past Chairman of the “Special Projects” Subcommittee, (1987-1989).  He is also a member of the American Bar Association and its Family Law Section.  Mr. Vuotto has lectured on Family Law on behalf of the New Jersey Bar Foundation.  He continues to lecture to the public and the bar, including an annual seminar addressing the past year’s Family Law cases.  Mr. Vuotto has published articles on the topic of Family Law and has assisted, with the rest of the Matrimonial Law Attorneys of his firm, in preparing and presenting a Digest of Cases in conjunction with their annual seminar.  Mr. Vuotto was appointed as a “Discovery Master” by the Superior Court and is an active panelist of the Union County Early Settlement Program and has served as a Blue Ribbon panelist for the Essex County Early Settlement Program.

 

CARL D. GENSIB, ESQ., CPA

 

Mr. Gensib is a self-employed, Certified Public Accountant and Attorney at Law practicing in North Brunswick, New Jersey.  His practice covers a wide range of engagements including personal income tax, corporate income tax, partnership tax, estate tax, gift tax, generation skipping tax and tax of deferred compensation.  Mr. Gensib has also had extensive involvement in the valuation of closely held businesses in connection with matrimonial litigation and estate tax valuation.  Mr. Gensib is a member of The American Institute of Certified Public Accountants, The American Bas Association, The New Jersey Bar Association, the Middlesex County Bar Association and a Fellow of the New Jersey Society of Certified Public Accountants.  He has been qualified as an expert in the field of forensic accounting, income determination and business valuation in the Superior Court of most counties in New Jersey.

EXHIBIT “D”

 

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