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May I Lower My Life Insurance If My Child Support Is Reduced In N.J.?

May I Lower My Life Insurance If My Child Support Is Reduced In N.J.?

            If your New Jersey divorce lawyer made this as part of your divorce agreement under the section addressing child support and life insurance, then yes.  However, if it the life insurance issue is not addressed in your Property (or Matrimonial) Settlement Agreement, your attorney may still be able to persuade a judge of a New Jersey Family Court that it would be equitable and fair for the payor of child support to be allowed to lower the amount of life insurance being held as well.

            In Colella v. Colella, the parties were married on October 8, 1988.  The parties had two children born of the marriage, Courtney, age twenty-five, and Alexis, age nineteen.  The parties divorced on May 13, 2003 by dual final judgment of divorce.  The dual judgment of divorce included settlement terms agreed to by the parties, which covered issues of custody, child support, parenting time, and life insurance.  The parties shared joint legal custody of their daughters, meaning the parties would make important decisions together regarding their daughters, such as health and education.  The mother was made the parent of primary residence while the father was made the parent of alternative residence, meaning the girls would live mostly with their mother.  The father agreed to pay $187 per week in child support and agreed to maintain a life insurance policy naming the parties’ daughters equal beneficiaries in the amount of $400,000. 

            On March 23, 2012, the New Jersey Superior Court Family Part ordered that the mother pay twenty-eight percent of Courtney’s college costs.  The court ordered the father to pay the remaining seventy-two percent.  The court also increased child support for Alexis to $276 per week since Courtney was attending school away from home.  Child support was modified again on July 16, 2016 to $287 per week to adjust for the cost of living.  Courtney became emancipated in 2012, meaning she was now considered a legal adult.  Courtney subsequently graduated from college and was a nurse as of 2018.  Alexis began attending West Chester University and lives on campus throughout the academic year. 

            The father filed a motion with the Family Part on June 8, 2016 seeking to terminate or reduce child support for Alexis, require the mother to pay for part of Alexis’ college costs, consider the fact the father has paid Prosper loans for Courtney in the amount of $1,841, and award the father attorney’s fees.  The father included an outline of expenses he paid for Alexis, without being required to by the court, pursuant to the Jacoby factors.  The father stated that he pays for Alexis’ college costs, car repairs, car insurance, cell phone bill, and medical expenses.  Additionally, the father stated that he signed Prosper loans for Courtney in the amount of $33,000, which he argued should be considered in the support modification.  The mother filed a cross-motion with the court on June 29, 2016.  The mother asked the court to deny the father’s motion entirely, postpone the case until the father submitted a more current Case Information Statement, recalculate Alexis’ child support, order both parties to contribute to Alexis’ college expenses in accordance with the Newburgh factors, order the parties to pay medical expenses based on income, and require the father to show proof of the $400,000 life insurance policy. 

            The father claimed, during oral argument, that he paid $17,000 per year in Jacoby expenses for Alexis.  The father argued that his child support obligation for Alexis should be reduced due to account for his Jacoby contributions, and that child support should be paid directly to Alexis rather than the mother.  The mother claimed that Alexis would be spending over forty percent of the year at the mother’s home and that the court miscalculated the child support and college cost contribution because the father was earning $13,000 more per year than he claimed.  Furthermore, the mother stated that the father received a raise and bonus early in 2016 and was earning more money as a member of a band.  Lastly, the mother claimed that her monthly expenses exceeded her net monthly income. 

            The trial court terminated Alexis’ child support on June 10, 2016 without conducting an analysis of the factors pursuant to N.J.S.A. 2A:34-23(a), reasoning that Alexis was living on campus while in college.  The court considered the father’s Jacoby contributions as well as the twelve Newburgh factors, the cost of the university, and Alexis’ $5,500 student loan.  The court determined that the mother was responsible for twenty-seven percent of Alexis’ college costs and the father was responsible for seventy-three percent.  The court further ordered that the father could reduce his life insurance policy since Courtney was emancipated, that the father was responsible for seventy-three percent of Alexis’ unreimbursed medical costs, and denied the parties’ requests for attorney’s fees. 

            On appeal, the mother argued that the court was wrong to terminate child support for Alexis without considering all the material facts, that the court was wrong to reduce the father’s life insurance policy obligation, and that the case should be assigned to a different judge.  The father, on appeal, argued that he should have been granted attorney’s fees.  The New Jersey Appellate Division began by stated that it must refer to the factual findings of the trial court because of the trial court’s expertise in family issues.  The Appellate Division also stated that the trial court’s decision should not be overturned when it is supported by credible and substantial evidence, unless it would be unjust.  When reviewing the trial court’s decision to modify child support, the Appellate Division must determine whether the trial judge abused his or her discretion.  The Appellate Division stated that it would not overturn the trial court’s child support modification unless it was unreasonable or it obviously conflicted with the evidence.  Additionally, the Appellate Division stated that it must accept the trial court’s determination regarding a parent’s college cost contribution unless the decision was unsubstantiated by the evidence. 

            The New Jersey Appellate Division stated that there is no presumption that a child’s necessary support is lessened because the child goes to college.  The court explained that the child’s needs differ when the child attends college, but many of the expenses remain the same or increase, such as transportation, clothing, bedding, furniture, cell phone, toiletries, insurance, spending money, and entertainment.  The Appellate Division stated that the child’s ability to contribute must also be considered.  The court stated that child support determinations for a child in college must be made pursuant to the factors found in N.J.S.A. 2A:34-23(a), such as standard of living, parents’ finances, income of the child, and reasonable debts of the child and parents. 

            The Appellate Division affirmed the trial court’s decision in part and reversed the decision in part.  The court held that the trial court was wrong to terminate the father’s child support obligation solely on the Jacoby factors.  The Appellate Division reasoned that all the circumstances should be considered in determining whether to terminate child support, including the costs related to maintaining the mother’s home for when Alexis returns from school for breaks.  The Appellate Division, however, agreed with the trial court’s determination regarding the division of college costs for Alexis.  The Appellate Division reasoned that the trial court reasonably calculated each parent’s contribution based on the parties’ respective budgets and incomes.  The Appellate Division found that there was no abuse of discretion on this issue.  Furthermore, the Appellate Division found that the trial court did not abuse its discretion by reducing the father’s life insurance policy obligation from $400,000 to $200,000.  The court reasoned that Courtney is emancipated and working as a nurse; therefore, there was no need for the father to maintain a policy as to Courtney.  Lastly, the Appellate Division found that there was no need to assign a new judge to the matter as the trial judge did not weigh the credibility of the parties or make any findings of the parties’ intent, and the judge did not abuse his or her discretion by denying the parties attorney’s fees.

Our law firm is here if you have any issues regarding child support in New Jersey.