The New Economics of Divorce in New Jersey There are several differences to focus on between divorce New Jersey-style as it existed prior to 2008, versus how it exists now and for the foreseeable future. One of these is the matter of what the practitioner, whether he or she is a forensic accountant who specializes in divorce or is a traditional accountant, must provide in professional advice to clients who are going through the process.
By Randall M. Paulikens, CPA, and Ronald Markovich WithumSmith+Brown
More than 30 years ago, Census data indicated that nearly 50 percent of first marriages ended in divorce, and today this basic statistic still holds true. In 2003, New Jersey ranked as the 16th lowest state for number of divorces. The real estate market was strong and home values were high; retirement plans and stock investments were still generally strong. Most importantly, employment was robust. In 2003, the unemployment rate was less than half of what it is today. People had more discretionary income to spend and, accordingly, had the financial means to get divorced. Despite the emotional woes and concerns of divorce, people still had economic confidence and a sense of economic security and
stability. This stability allowed them to make necessary, but difficult, financial decisions.
The New Jersey Divorce Divorces trigger property distribution of the marital estate and income distribution (i.e., alimony). In New Jersey, there are a dozen factors that are considered for spousal support (alimony). Half of these factors are not substantially impacted by location or economic cycles: • Marriage length. • Age and health of each party. • Parental role of each party. • Time and expense to acquire sufficient education or training to become selfsupporting. • Consequences to both parties. • Factors that the court deems relevant (New Jersey Statutes, Title 2A, Chapters: 34-23). The following factors can be impacted by geographic location and the economy: • Actual needs and ability of a party to pay alimony. • Standard of living established during the marriage. • Earning capacities of the parties, education level, job training and skills. • Length of absence from the
NEW JERSEY CPA • JANUARY • FEBRUARY 2012
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