Divorce agreements between couples with young children often include language that “extraordinary expenses” will be shared at the relevant time based on the parties’ relative financial circumstances.
A recent New Jersey case, however, underscores how important it is to incorporate periodic review of the parents’ respective financial circumstances and full financial disclosures into the agreement.
This is because the simple passage of time does not constitute the type of “changed circumstance” that will convince a court to reexamine the couple’s finances and/or modify a support obligation.
That means that when extraordinary expenses arise in later years, the court won’t have the data to make a fully informed determination of how much each parent should kick in.
In the New Jersey case, a couple had a child and got divorced a year later. The father was ordered to pay child support.
Thirteen years later, disagreements over custody and parenting time caused the couple to retain a parenting coordinator, but the father refused to sign onto the PC’s recommendations.
The mother filed a motion in family court requesting that the PC’s recommendations be adopted.
She also moved to compel the father to file an updated financial statement for the purpose of recalculating child support, arguing that the passage of time constituted a change in circumstances warranting a modification.
Additionally, the mother sought to compel the father to contribute to “extraordinary expenses” for their now-teenaged daughter, like SAT costs, driving lessons, college visits, prom expenses and her senior class trip.
The mother sought to compel the father to contribute to “extraordinary expenses” for their now-teenaged daughter, like SAT costs, driving lessons, college visits, prom expenses and her senior class trip.
The court denied the mother’s request, ruling that the mere passage of time did not justify forcing the husband to open up his finances for purpose of a support modification. The court ordered the parties to share the daughter’s extraordinary expenses equally. This was despite the fact that the father had accumulated a number of luxury assets since the divorce and drove a Maserati.
The New Jersey Appellate Division upheld the decision, saying the lower court’s equal allocation of the extraordinary expenses was reasonable in the absence of accurate financial statements for either party.
If the original divorce agreement contained language calling for periodic review of the parties’ financial circumstances, including financial disclosures, and provided that extraordinary expenses should be allocated based on such disclosures, the mother likely would have found herself in a better position.