More Fun for Judge Fisher as He Affirms a Denial of Arbitration

Morgan v. Raymours Furniture Co., ___ N.J. Super. ___ (App. Div. 2016).  Today, Judge Fisher issued the first published Appellate Division decision of 2016.  Recently, Judge Fisher wrote an opinion that cited Humpty Dumpty and Joyce Kilmer’s poem “Trees.”  His opinion today incorporates Aesop, a 1546 form of a familiar proverb about having one’s cake […]

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Shareholder Steven L. Friedman Published Article on NJ.com

Stark & Stark Shareholder Steven L. Friedman, Chair of the Trusts & Estates Group, authored the article The Top Reasons for Establishing Control Over Your Estate, which was published on NJ.com on December 11, 2015.

The article details many of the factors that are involved in forming an Estate Plan. Various legal documents can assist you in developing an Estate Plan, which can include Wills, Trusts, Durable Powers of Attorney, and Advance Directives, but the most important factor can in this planning will always be communication. This can include discussing preferred health care decisions with your Proxy Directive or your plans for how you wish your minors to be educated and raised with your selected Guardians.

Mr. Friedman recommends that those wishing to start their Estate Plan complete a Personal Record Organizer, which can enable an individual to “communicate the location of important estate, personal and financial documents and records.” Once you have completed your Personal Record Organizer, you should have a comprehensive guide for your family and fiduciaries to follow. This information can include locations to the safety box and its key, Social Security card, Last Will and Testament, contact information for attorneys, accountants, and financial providers, and itemizations of mortgages or any liabilities owed.

To read the full article, please click here.

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Intestate Estate During a Will Contest

As I have discussed in previous blogs, if an individual is considering contesting a Will, they should also consider how the distributions from the Estate might be made should a Will contest result in an Intestate Estate. Simply put, if a Will is invalidated and there is no previous Will that can be probated by the Court, the decedent will be deemed to have died without a Will, otherwise classified as “intestate.” Under such circumstances, the intestacy statute governs how the distribution would be made by the Estate.

Under the most basic distribution of an Intestate Estate, if a spouse has survived the decedent and all of the children were both her and the decedent’s issue, then in that event, the surviving spouse would be entitled to the entire Estate. For further reference, any children of the decedent or spouse are referred to as “of issue” in Wills.

Likewise, if the spouse survived the decedent and there were no children of issue, the spouse would also receive the entire Estate. Aside from these simple scenarios, other potential scenarios can become more complex.

The next typical situation is where a spouse survives the decedent; however, the children of the decedent were not the children of the surviving spouse. Under these circumstances, the surviving spouse would not receive the entire Intestate Estate. Instead, in this case the Estate would be distributed as follows: the surviving spouse would receive the first 25% of the Intestate Estate, but not less than $50,000 nor more than $200,000, plus one-half of the balance.

Another scenario which can occur is if the parent of the decedent survives him or her, but there are no children of the decedent. In this case, the surviving spouse would receive the first 25% of the Intestate Estate, but not less than $50,000 nor more than $200,000, plus three-quarters of the balance. As is plainly evident, under these scenarios the surviving spouse will receive the majority of the estate.

The next scenario involves a situation if there is a mixture of surviving children between the decedent and the surviving spouse. If all the decedents’ surviving children are also descendants of the surviving spouse, and the surviving spouse has one or more surviving children who are not children of the decedent, or if there are surviving children of the decedent who are not children of the surviving spouse, the surviving spouse will receive 25% percent of the Intestate Estate, but not less than $50,000 nor more than $200,000, plus one-half the balance of the Intestate Estate.

Under N.J.S.A. 3B:5-4, the Intestate Succession Law provides for the distribution to heirs other than a surviving spouse or domestic partner. This statute provides that any of the Estate not passing to the decedent’s surviving spouse or domestic partner shall pass as follows: first, to the decedent’s children by representation. If there are no children of the decedent, then the Estate passes to the decedents’ parents equally if both survive or to the surviving parent.

This blog provides a quick glance as to potential distributions under an Intestate Estate. It can, however, become vastly more complex if we have one or two surviving parents, children from other relationships which might be children of the decedent or of the surviving spouse, or numerous other permutations. It is also worth noting that this statute only applies if there is a determination that there is no Will to probate. It is for these reasons that it is important for a party to consider the numerous types of distributions should a Will be invalidated and the Estate be distributed under the laws intestacy.

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The Startup Lifecycle: Friends and Family Round

Stark & Stark Associate Max L. Schatzow, member of the Securities Group, authored the article The Startup Lifecycle: Friends and Family Round, which was published in the New Jersey Law Journal on December 1, 2015.

This is the third part of an ongoing series detailing all the minutia of a business’ startup lifecycle. In this article, Mr. Schatzow continues with the hypothetical business as it begins to raise funds. More specifically, this means its founder will need to conduct the offering under Rule 506 of Regulation D.

Further, Rule 506 requires “an issuer to make a subjective determination that, at the time of acquisition of the investment, each nonaccredited purchaser is sophisticated or has a sophisticated ‘purchaser representative.’” Meanwhile, under Regulation D “any purchaser that is not an ‘accredited investor’ must receive prior to the sale, at a minimum: i) the issuer’s balance sheet and potentially audited financial statements, and ii) nonfinancial information that is typically found in a prospectus.”

However, prior to conducting the offering, the founder would need to meet with his attorney to discuss all the information that will need to be disclosed in a private placement memorandum. This includes a description of the business, disclosing the use of proceeds, indentifying the directors and executive officers, list of principle shareholders, and other risk factors. As Mr. Schatzow explains, business owners are encouraged to provide this information to “all investors for fear of the antifraud provisions of the securities laws, where even an omission can create liability for the company.”

To read the full article, please click here.

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Motions in Limine Cannot be Used as a Last-Minute, Short Notice Substitute for a Motion for Summary Judgment

Cho v. Trinitas Regional Medical Center, ___ N.J. Super. ___ (App. Div. 2015).  In this medical malpractice case, the only remaining defendant, a doctor, filed what was labeled as “motions in limine” on the day before a jury was to be selected.  But those motions, which included a 16-page brief and a total of 260 […]

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The NFL Learns a Lesson: Briefs With the Wrong Color Cover Get Bounced

This first post of 2016 reminds us all that appellate courts all have rules that dictate even mundane matters, such as the color of brief covers.  Appellate judges take those rules seriously, since those rules enable judges to know at a glance which brief they are about to read. Last week, the National Football League […]

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APPELLATE DIVISION ANALYZES WHAT IT MEANS TO “ABANDON” A CHILD “BY WILLFULLY FORSAKING” HIM

Family law and estate law are undoubtedly two very personal areas of the law that often cross-over with one another depending on the issues at hand.  In the Matter of the Estate of Michael D. Fisher, II presents us with one of the more tragic factual scenarios where the two worlds intertwine.

These are the facts that you need to know:

• The parties were married in 1994 and had one child, who was born in 1995.
• The parties separated in 2001 and mom procured a final restraining order against dad after he tried to move child from school without first telling her.    Dad, under the terms of the FRO, was permitted supervised parenting time with child at dad’s psychologist’s office, and dad was to undergo a risk assessment and “receive professional domestic violence counseling.”
• Dad neither attended all supervised time with his son or undergo either the risk assessment or counseling.
• In November 2001, dad filed a motion for unsupervised parenting time.  Mom cross-moved for all time to be supervised until dad completed anger management and the risk assessment.
• In January 2002, the court temporarily suspended dad’s parenting time pending his enrollment of the above-referenced anger management and assessment.
• In March 2002, the court entered a final judgment of divorce, incorporating the terms of the parties’ settlement agreement.  Mom procured sole custody of the child, and dad’s parenting time remained suspended until he complied with the terms of the January 2002 Order.
• During the divorce proceeding, mom presented dad with an offer that, if dad agreed to give up his rights to the child, she would not seek child support.  Dad rejected the offer “out of hand”.
• Dad did not appear for the scheduled risk assessment.  As a result, the parenting time suspension continued.
• From January 2002 until the child’s death in September 2010, dad “never had any legal visitation with his son” and had some phone conversations with him in 2001 and 2002.  He occasionally saw him in public places.
• Through subsequent litigation, dad, who had moved to Florida and became ill, procured a termination of his child support obligation.  He was obligated to pay substantial arrears that had accrued, but had otherwise paid support throughout the child’s life.  He even continued to pay a portion of the support when he was in poor health.  Interestingly, the trial court was critical of dad because he paid support through a wage garnishment even though this was specifically agreed to in the parties’ settlement agreement.
• Dad learned of the child’s death from a relative and returned to New Jersey to attend the funeral.  The child died intestate and, with dad’s consent, mom was appointed as administratrix and administratrix ad prosequendum (named where a wrongful death suit is to be filed) of the child estate.

Since the child had no spouse or children of his own, the parents were to share equally in his intestate estate under N.J.S.A. 3B:5-4(b).  However, another law that became effective only a year prior to the child’s death, N.J.S.A. 3B:5-14.1, provides:

1.  A parent of a decedent shall lose all right to intestate succession in any part of the decedent’s estate . . . if:

(1) The parent refused to acknowledge the decedent or abandoned the decedent when the decedent was a minor by willfully forsaking the decedent, failing to care for and keep the control and custody of the decedent so that the decedent was exposed to physical or moral risk without proper and sufficient protection, or failing to care for and keep the control and custody of the decedent so that the decedent was in the care, custody and control of the State at the time of death . . . .

As expected, mom filed a complaint to bar dad from receiving a share of the child’s estate under the newly passed law, alleging that dad abandoned the child after the divorce by failing to have any contact with him or pay his full child support obligation.  Dad denied that he abandoned the child.

The trial court granted mom’s application despite concluding, “[a]dmittedly, it may not have been [dad’s] specific intent or purpose to abandon his son.”  In so doing, the court found dad’s acts were “unequivocally intentional rather than accidental or involuntary” because it was his choice not to attend supervised parenting time or anger management counseling, as well as not pay child support.

On appeal, the court determined that whether dad “abandoned” the child turned upon an interpretation of the new statute, which provides:

b.  A parent of a decedent shall lose all right to intestate succession in any part of the decedent’s estate . . . if:

(1) The parent refused to acknowledge the decedent or abandoned the decedent when the decedent was a minor by willfully forsaking the decedent, failing to care for and keep the control and custody of the decedent so that the decedent was exposed to physical or moral risk without proper and sufficient protection, or failing to care for and keep the control and custody of the decedent so that the decedent was in the care, custody and control of the State at the time of death . . . .

Analyzing the language, the Appellate Division found that a parent may lose his or her right to intestate succession if the parent abandoned the decedent when he or she was a minor by taking any one of the following three specific steps:

1. willfully forsaking the decedent;
2. failing to care for and keep the control and custody of the decedent so that the decedent was exposed to physical or moral risk without proper and sufficient protection; OR
3. failing to care for and keep the control and custody of the decedent so that the decedent was in the care, custody and control of the State at the time of death.

In so finding, the Appellate Division noted that death or serious harm to the child need not occur for the statutory definition of “abandonment” to be fulfilled and that the law was not supposed to be so limiting in its application.

The Court also engaged in a statutory interpretation of the phrase “willfully forsaking”, noting that it was inappropriate for the trial court to utilize a dictionary definition of “willfully” when many prior cases had interpreted the phrase under a similar statute.  After engaging in its analysis, the Appellate Court determined:

After carefully reviewing these precedents and distilling them to their essence, we hold that, in order for a court to conclude that a parent has “abandoned” his or her child “by willfully forsaking” him or her under N.J.S.A. 3B:5-14.1(b)(1), the court must find that the parent, through his or her unambiguous and intentional conduct, has clearly manifested a settled purpose to permanently forego all parental duties and relinquish all parental claims to the child.

The burden of proof to be applied?  A “preponderance of the evidence”, rather than the more strict “clear and convincing evidence” because the issue merely involved whether a parent may share in a child’s financial estate, rather than the actual “best interests” of the child.  This despite will contests often involving the stricter standard.

Following its legal analysis, the Appellate Court found that dad did not “abandon” his son by “willfully forsaking” him even though he did not take actions necessary to enable him to have parenting time with the child after the FRO was procured by mom.  Ultimately, dad did not manifest a settled purpose to “permanently forego all parental duties and relinquish all parental claims to the child.”  Dad took repeated steps to restore his relationship with the child, would not agree to mom’s offer to terminate his parental rights in exchange for no child support, and paid child support throughout the child’s life (the Court noted that simply filing a motion to terminate child support is not evidence of a “settled purpose” to “permanently forego all parental duties and claims to his child” – in fact, dad did not oppose mom’s motion to reinstate child support if dad could procure Social Security Disability benefits.)

As a result, the Court concluded that the exception to intestate succession that mom sought to apply here was not appropriate and dad was entitled to share in the child’s estate.

____________________________________________________

 Robert Epstein is a partner in Fox Rothschild LLP’s Family Law Practice Group and practices throughout New Jersey.  He can be reached at (973) 994-7526, or repstein@foxrothschild.com.

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*Photo courtesy of digitalart.

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