Cherry Hill Family Legal Blog

Dividing property and assets in a divorce can be a difficult process. Typically, one thinks of insurance policies, retirement accounts, investment portfolios and real estate as property to be divided up in the divorce proceedings. One asset people may forget about in New Jersey is all of those accumulated credit card points.

Credit card points have value and can therefore be considered marital property. How the points are valued or divided up can vary. If a person had a credit card before getting married and can show that the points accumulated were accumulated by only one person, those points may not need to be included as marital property. If they need to have a value assigned to them, one may wish to base the value on that for which they are redeemable. A card that accepts 25,000 points for $250 worth of merchandise would mean that each point is worth one penny.

Divorce where children are involved can be an ugly process in New Jersey. Alternatively, a divorce involving children can be carried out in an atmosphere of cooperation and open communication that focuses on the importance of maintaining a semblance of family structure following a divorce. Regardless of how parents feel about each other, they typically share concern for the well-being of their children. How well children fair in a divorce depends largely on the structure of child custody and the continued relationship between the children and both parents.

Contentious child custody battles seldom have positive outcomes for anyone, particularly children. If one parent gets sole or primary custody, the relationship with the other parent will almost inevitably suffer. Some of the negative consequences of this situation are an increase in the likelihood of the child to experiment with drugs or alcohol or to get in trouble with the law.

Mental illness is not something people -- whether they reside in New Jersey or elsewhere -- like to talk about. There is a stigma attached to individuals with mental health concerns that make those suffering afraid to seek the help that they need or turn to others for support. If a person with a mental illness has children, some may question his or her ability to properly care for those children. This means that, when going through the divorce process, a person's mental health could end up affecting his or her child custody arrangements.

At what point will the state consider a parent unfit to hold custody of his or her children? Does having a diagnosed mental illness mean that there is no hope for achieving any level of child custody?

The New Year is upon us and with the beginning of 2019 will come some major changes to tax laws that potentially impact divorces in New Jersey and the rest of the country. Chief among those is how alimony payments will be handled for tax purposes in a divorce. For the past 70 years, alimony has been deductible for the payor and taxed as income for the payee. The benefit to this was that the payor got to reduce his or her amount of taxable income and the recipient paid the income tax, which was typically at a lower rate than that which the payor would have paid.

The change that becomes effective Jan. 1 states that the payor will pay the income tax and the payee will not have to pay tax on the alimony received. While this may make alimony payments more difficult to afford, there are other changes and options to be considered. The child care tax credit has doubled from $1,000 to $2,000 per child. For example, a custodial parent with three children under 17 who makes $100,000 would qualify for $6,000 in tax credits. In addition, division of property is typically not considered a taxable event, and as of January 1, there will be no differences, from a tax perspective, between alimony payments and property division payments.