On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Essex County, Docket No. FM-07-2060-00.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued September 13, 2011
Before Judges Carchman, Fisher & Baxter.
This appeal addresses the issue of whether creation of a special needs trust can justify the elimination of the obligation to pay child support to the primary residential parent of a special needs child. We conclude that while a party may utilize a special needs trust to take advantage of government programs to lessen the burden on the parent to provide support and medical assistance, the facts of this case do not support a concurrent application to eliminate child support, and the motion judge correctly denied the application for relief.
Here, plaintiff Jonathan Bond appeals from a December 15, 2009 order of the Family Part that denied his request to eliminate child support payable to defendant Wendy Bond and establish a special needs trust for the educational and living expenses of A.B.*fn1 , the parties' autistic son. The motion judge also denied plaintiff's request to appoint a parent coordinator to establish the special needs trust. Although the application was advanced to establish a special needs trust, integral to that application was plaintiff's request for termination of direct child support to defendant, as well as a request to require the parties to contribute toward the educational and living expenses of A.B. on a proportional basis, based upon the income and assets of each party. The application was denied, along with plaintiff's application for counsel fees.
The judge ordered plaintiff to pay ninety-nine percent of the post-secondary educational expenses for the parties' other son, Matt, with defendant being responsible for one percent of the expenses. Concluding that plaintiff had acted in bad faith, the judge awarded $27,397 in counsel fees and costs to defendant.
In a related appeal, which we consolidate for the purposes of this opinion, plaintiff appeals from a March 17, 2010 order that he pay $5335 in counsel fees and costs because he had violated litigant's rights for failing to comply with the court's December 15, 2009 order.
On appeal, plaintiff argues that the motion judge erred by not: ordering the establishment of a special needs trust; appointing a parent coordinator; and compelling defendant to cooperate. Plaintiff contends that the judge should have appointed a guardian ad litem for A.B., or alternatively, A.B. should have been joined as an indispensable party. Plaintiff further maintains that Vista Vocational & Life Skills Center (Vista), A.B.'s present school, is not "special education" under the terms of the property settlement agreement (PSA), and the judge erred when he ordered plaintiff to pay for A.B.'s costs at Vista. Plaintiff also challenges the allocation of Matt's college expenses as well as the award of counsel fees.
We affirm the December 15, 2009 order in its entirety (A-2511-09); as to the award of counsel fees in the March 17, 2010 order, we remand for findings of fact (A-3723-09).
Our consideration of the issues raised on appeal requires an expansive recitation of the relevant facts. Plaintiff and defendant were married on October 19, 1985. Two children, A.B., now twenty-three, and Matt, now twenty, were born of the marriage. Both parties acknowledge that A.B. is autistic and has special needs requiring special schooling and ancillary assistance.
In January 2001, after separating, the parties entered into a parenting agreement. The parties agreed defendant would maintain physical custody of both children, and plaintiff would have parenting time with the children on alternate weekends and midweek for dinner.
The parties were divorced by judgment of October 10, 2002. The final judgment of divorce incorporated the terms of an oral settlement agreement reached by the parties, which was superseded on December 23, 2004, by a carefully crafted and comprehensive PSA. The earlier parenting agreement was incorporated by reference into the PSA. On October 12, 2005, the court entered a consent order modifying the dual final judgment of divorce and incorporating the PSA.
Among other issues, the PSA addressed alimony, child support, emancipation, as well as the continued educational costs of the children. Under the terms of the PSA, plaintiff agreed to pay defendant $29,583.33 in alimony per month, commencing September 1, 2001, until December 31, 2004. Thereafter, alimony was terminated, and defendant waived any right to seek further alimony from plaintiff.
As to child support, plaintiff agreed to pay $4166.66 per month, or $50,000 per year, for each child in child support. Of critical importance, the PSA provided that "[i]ncome earned by the [d]efendant (if any) will not alter or have any impact on the amount of the [p]laintiff's child support obligation." In addition, plaintiff agreed to maintain the "current medical, hospital and dental insurance or comparable insurance for the benefit of the children until each child is emancipated as defined" in the PSA, such as the completion of undergraduate college, marriage or "[p]ermanent residence away from the residence of both custodial parents, which does not include residence while away at college." The child support obligations "shall terminate upon [Matt's] emancipation as defined" in the PSA. With regard to A.B., the PSA recognized his special needs and provided: both [parties] recognize that [A.B.] is autistic, has special needs, and probably will never be emancipated. Both parties are committed to a course of action which preserves, promotes and protects [A.B.'s] best interest. The [p]laintiff has paid and shall continue to pay for [A.B.'s] unreimbursed and uncovered medical, dental, hospital, surgical, psychiatric, psychological, special education, and other similar expenses which are reasonable and appropriate for [A.B.] . . . . Both parties will consult with each other regarding such expenses and neither party will unreasonably withhold his or her consent to such expenses. [(Emphasis added).]
The parties also addressed the issue of plaintiff's demise. Under the terms of the PSA, plaintiff agreed to maintain $1,500,000 in life insurance coverage for the children's benefit until the emancipation of both children. The life insurance coverage amount increased to $2,500,000 after plaintiff paid his equitable distribution obligation. The PSA also contained the following provision: "[t]he sole [t]rustee of any [t]rust created to receive the [life insurance] proceeds on behalf of the children shall be the [d]efendant."
Both parties agreed that each of their children ought to "attend and accomplish the highest level of schooling/education possible for that child." Although the parties had not made "specific arrangements" in the PSA "for the payment of each child's post high school education," if the parties disagreed as to the payment of the educational costs and expenses, either party could apply to the court for appropriate relief.
In 2006, defendant established a special needs trust for A.B. The trust was funded by a gift to A.B. from A.B.'s maternal grandfather.
In a subsequent proceeding in the Probate Part, the probate judge adjudged A.B. "an incapacitated person, and [he] is unfit and unable to govern himself and manage his affairs." The judge appointed plaintiff and defendant as co-guardians of A.B.'s person and property.
A.B. completed the program at The Children's Institute in Verona in June 2009, and in July of that year, he enrolled at Vista in Connecticut. Vista is a residential facility for young adults with special needs. It "is a unique, community-based educational program for young adults with neurological disabilities" that offers residents "hands-on training in vocational and life skills." The annual cost is $63,360.
Thereafter, plaintiff filed a post-judgment motion seeking an order to 1) establish a special needs trust to fund A.B.'s educational and living expenses at Vista; 2) appoint Shirley B. Whitenack, Esq. as a parent coordinator, or any person the court would deem appropriate to serve as a parent coordinator; 3) compel defendant to cooperate with plaintiff and the parent coordinator in establishing a special needs trust for A.B.; 4) determine how the cost of the parent coordinator would be shared; 5) eliminate plaintiff's direct child support obligation; 6) determine the financial contributions of plaintiff and defendant toward A.B.'s educational and living expenses on a proportionate basis based upon income and assets; 7) modify the PSA by adjusting downward the amount of life insurance coverage required for the benefit of the children; 8) compel defendant to pay counsel fees and costs; and 9) award other relief as the court deemed equitable and just.
Defendant filed a cross-motion and sought an order to: 1) determine the parties' financial contributions toward A.B.'s educational and living expenses at Vista; 2) determine the parties' financial contributions toward the payment of counsel fees and costs for establishing a special needs trust for A.B.; 3) determine the parties' financial contributions toward Matt's post-secondary educational expenses; and 4) compel plaintiff to pay defendant's legal fees and costs.
In his certification in support of his motion, plaintiff argued that the parties needed to "work together to ensure the future happiness and financial security for [their] son in the most effective way[,]" and presently, "[A.B.] is not set up for a time when [plaintiff] [is] earning less income and [has] fewer available resources[.]" Plaintiff argued that defendant ought to "listen [to] and heed the advice of [the] special needs attorneys" and agree to establish a special needs trust, separate from the one A.B.'s maternal grandfather had already established. Adopting this strategy "would allow [A.B.] to become eligible to receive government benefits, such as Supplemental Security Income (SSI) and Medicaid." Plaintiff requested that the court decrease life insurance coverage for the benefit of A.B. so the amount would "not [be] considered an asset or unearned income attributable to [A.B.]." Plaintiff recommended the court appoint Ms. Whitenack, an expert in disability law, as a parent coordinator.*fn2
Further, with regard to A.B., plaintiff noted that defendant "wants [plaintiff] to continue to pay direct child support to her, notwithstanding the fact that [A.B.] is presently residing away from home at Vista on a full-time basis, and notwithstanding the fact that [he] h[as] been responsible for all expenses relating to Vista on behalf of [their] son." Plaintiff contended that he "assume[d] much of the initial financial burden for Vista, as [he] ha[d] with all of the extraneous children-related expenses not mandated by a [c]court [o]rder[.]" Plaintiff had only agreed to enroll A.B. at Vista because plaintiff had the understanding that [he] would not pay direct child support of $50,000 per year to the [d]efendant for [A.B.] in view of the fact that [A.B.] no longer resides in the home of the [d]efendant; that any and all expenses related to Vista would be shared by the [d]efendant and [him] in some manner; and that the [d]efendant and him [sic] would be involved in establishing a proper [s]pecial [n]eeds [t]rust for the future financial security for [A.B.], which would also allow [A.B.] to become eligible to receive the maximum level of government aid to support a very costly, long-term proposition.
Regarding Matt, plaintiff noted that he paid the cost of Matt's car and college tutoring "above and beyond [his] child support obligation." Plaintiff maintained that his "financial circumstances have declined in the recent years," and his "annual gross salary ha[d] declined from approximately $2,000,000 to $800,000." He urged the court to award counsel fees and costs because defendant "refused" to "cooperate with [him] and [their] special needs attorney."
A review of the parties' finances is appropriate.*fn3
Plaintiff was the founder of the New York-based advertising agency, Kirshenbaum Bond & Partners (KBP), and as of January 11, 2011, he was the Chief Executive Officer of Big Fuel Communications, a social media marketing firm. Plaintiff's case information statement, dated September 21, 2009, established plaintiff's 2008 gross earned income as $4,924,469. Plaintiff owns a home in New York City valued at $6 million*fn4 and a beach house in Bridgehampton valued at $3 million. Plaintiff reported his net worth as $8,089,338.
In her certification, defendant maintained that plaintiff "earned approximately $5 million per year" for the past two years. Plaintiff's 2008 adjusted gross income was $4,464,021; in 2007, his adjusted gross income was $7,827,802.
Defendant is a self-employed psychotherapist who re-entered the workforce seeking to rebuild her psychotherapy practice. Defendant's case information statement revealed that her gross earned income in 2008 was $9,218, but that her unearned income was $253,539. Her home in Short Hills is valued at $1,900,000.
Defendant urged that she was the party who "shouldered the responsibility for A.B.'s care since [the parties'] divorce." In detailing her expenses, plaintiff claimed that she contributes $600 each month to A.B. for his participation in extracurricular activities and social events at Vista; she continues to pay for his medication, clothing and toiletries; she transports him to and from Vista, and she travels to Vista several weekends per month to visit him. When she visits A.B., she incurs the cost of traveling to Connecticut, hotels, and meals, as well as the cost of taking A.B. to lunch or dinner and other activities such as a movie or bowling. She visits him frequently to ensure that he does "not feel as though he has been abandoned by his family now that he is attending Vista." Defendant also maintains a home for A.B.'s return for holidays and weekend visits and provides A.B. with family vacations. Although A.B. is doing well at Vista, his "needs are greater than some of the other young adults in the program," and it is "unlikely that [A.B.] will advance to the next phase of the entrance program . . . in the typical two year time period."
Defendant did not oppose the establishment of a special needs trust for A.B. Instead, she objected to plaintiff's request to terminate child support because the PSA recognized that A.B. might never be emancipated and because it would be unfair for her to be "solely responsible for [A.B.'s] expenses." Furthermore, there is little clarity as to if and when A.B. would receive the public assistance plaintiff sought on A.B.'s behalf.
While defendant expressed concern about retaining Ms. Whitenack as a parent coordinator because Ms. Whitenack met with plaintiff and plaintiff's current wife to discuss A.B., she agreed to retain Ms. Whitenack, or another parent coordinator, provided the coordinator communicate with only plaintiff and defendant regarding A.B.
Defendant agreed that the parties may want to revisit the life insurance provision of the PSA as it relates to A.B. but cautioned that any changes should not ...