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Freelance work and child support obligations

For New Jersey parents with child support obligations, payroll deductions and withholdings are some of the most common means by which their monthly payments are collected. Around 70 percent of all child support payments are made through direct payroll collections. Even when a parent attempts to evade their child support responsibilities, employers are required to report their newly hired workers to a child support database that is shared between states. Workers at a new job can face enforcement actions and even the garnishment of their paycheck if they fail to pay their court-ordered child support.

A new wrinkle has arisen in this child support enforcement system, however: the rise of the gig economy. This term includes the wide range of jobs through which people are paid as independent contractors, from driving for Uber to renting out their spare bedroom on Airbnb. Only some states require companies to report their contractors to the child support database, making it more difficult to track down parents who are mainly receiving income from these types of activities. In addition, these jobs can often be transient; by the time a state agency finds out that the parent has a gig industry job, they may have long since moved on.

Planning for the future while finalizing a divorce

The divorce process is different for every separating couple in New Jersey. It can involve an array of financial, practical and emotional complications. Therefore, when spouses go through a divorce, they should be careful to avoid making errors that could be financially damaging in the long term.

As part of a divorce settlement, asset division is meant to ensure an equitable split of the couple's marital assets. However, these divisions often reflect a present-day understanding of each partner's wealth. The decisions made in a divorce settlement can have long-term impacts. For example, parents will often include how college costs are to be covered for children as part of the settlement. It can be important to build in the potential for change or reconsideration in case an ex faces unexpected issues such as disability or unemployment. Purchasing insurance as part of the settlement can be one way to handle these types of uncertainties.

Child support and unemployed parents

Non-custodial parents who unexpectedly lose their jobs may want more information about the effects of unemployment on an active child support order. In New Jersey and other states, child support orders are in place to help ensure that the children's needs are met. Parents will generally find that a child support order remains in effect even when the party who is responsible for making the payments is not working. When they explore the options that are available to them, unemployed parents may find that this potentially stressful situation can be successfully navigated.

Upon notification, the unemployment office will deduct child support payments from an eligible parent's unemployment wages. The state is prepared to assist parents in determining their eligibility for these wages. An ineligible parent is advised to remain in close contact with the child's other parent and the family court during the job search process. The search should be documented, and child support payments should be made by check until they can once again be deducted from wages.

Is paying spousal support becoming more common for women?

The last several decades have seen many changes here in the United States. This includes significant changes in how common it is for women to be the breadwinner in families. Take moms for instance. In 1960, moms were the breadwinner in only 11 percent of households with minor children. In 2013, this number was all the way up to 40 percent.

The major increase in women being the primary earner in families has had many implications. For one, it has led to changes in how common certain issues are for women in divorce cases. One area for which this is the case is spousal support, also known as alimony.

How law change affects divorcing couples and tax savings

Tax deduction laws for alimony payments have changed and will affect recipients and payers in different ways. Couples in New Jersey will have to explore different avenues to seek out tax savings. The Tax Cuts and Jobs Act reverses a law enacted in 1942, and one of the expected outcomes is a shift in how alimony payments are treated during the negotiations process.

The Tax Cuts and Jobs Act won't permit tax deductions for alimony. Agreements finalized prior to 2019 won't be affected by the change, so any alimony paid in money will be eligible for tax deductions. Those required to pay alimony can have money transferred between IRAs and 401Ks. If money is transferred with pre-tax dollars, a deduction can be possible. The recipient avoids tax penalties in avoiding early withdrawals while increasing the overall value of the retirement savings funds. The payer has the ability to reduce their taxable income in transferring funds using pre-tax dollars.

Planning for college funds during a divorce

For many New Jersey parents, paying for their children's higher education can be a major source of stress. The College Board estimates that the already-high costs of university education rise by around 3 percent every year. The sum is already substantial, especially when multiplied over the course of four years; every year at a private university costs approximately $46,950 when tuition, fees and room and board are taken into account an a year at a public university costs an average of $20,770. However, many parents are committed to making a substantial commitment to their children's university education.

Planning to deal with educational costs can be particularly complicated when parents decide to divorce. The costs of divorce, including setting up two households, dealing with asset division and prioritizing child support and spousal support, can place a significant strain on parental finances, including plans for a child's education. While married couples may think about saving for their children's education, few have a financial plan as to what to do in the case of divorce or widowhood.

Why a prenup may be important in wealthy families

Children of some wealthy families in New Jersey may face pressure from their parents to create and sign a prenuptial agreement. This is often not because of any issue the parents have with the child's future spouse but simply an effort to keep the family wealth from going to that spouse in the event of a divorce.

However, children often resist their parents on this. This is one reason it may be a good idea for parents to start talking with their children about the importance of a prenup when the children are in their teens or are young adults.

How equal marriages may reduce the likelihood of divorce

When New Jersey couples embark on a marriage in which the gender roles are equal, they may be creating a more solid base for their relationship than couples who begin with traditional gender roles and then change. According to researchers in Sweden, this may lead to divorce.

It is not uncommon for women to postpone developing their own careers in order to support their husbands' jobs and raise children. Later, when they do throw themselves into their careers and start making as much or more money than their husbands, it can create tension. Some husbands become controlling, trying to tell their wives what to do with the money and making accusations that they are having an affair.

Issues that may arise when parents share legal custody

Some New Jersey parents who are getting a divorce might wonder what is meant by joint legal custody. Legal custody is the right of parents to decide what religion their children will practice, what schools they will attend, what kind of medical care they will receive and other major issues. If parents share legal custody, they both have these rights.

This means that parents must learn to communicate and work together on these issues, and this has both its good and bad points. When parents are able to resolve conflicts and move forward to make decisions that are in the best interests of the child, this can strengthen their overall co-parenting relationship. It can also be positive for children to see them work through their difficulties in this way. Parents may also appreciate being able to talk over hard decisions about their children. On the other hand, since success in sharing legal custody lacks clear benchmarks, it can sometimes feel frustrating for parents who may wonder whether they are making progress.

How to explain divorce to young children

Going through a divorce is an emotional time for the individuals separating, but it becomes even more stressful when a child is involved. It is especially tough if you and your partner have a child that is five years or younger. At this age, your child depends on you, and neither one of you wants to let him or her down.

It may seem impossible to explain to your young child that their parents are no longer going to be married. Experts agree that divorce can be life-altering event for children. However, children of divorce can certainly grow to live happy, healthy lives.

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