College Contributions after Divorce: You’re Probably Not Off the Hook

Oct 29, 2018

M.F.W. v. G.O., 2018 N.J. Super. Unpub. LEXIS 1853

New Jersey law governing child support under N.J.S.A. 2A:34-23 does not explicitly require a parent to make college contributions; however, a growing body of New Jersey case law is setting a trend in which courts require parents to contribute if they have the ability to pay. Thus, New Jersey courts have increasingly adopted the policy that parents should financially assist their children with college expenses if they are able to do so.

Between divorcing litigants, if college contributions are not established in a property settlement agreement (PSA), the court conducts an analysis of the factors set forth in the seminal New Jersey case Newburgh v. Arrigo to determine how much each parent is responsible for.  A recent case out of the Appellate Division, M.F.W. v. G.O., walked through an analysis of the Newburgh factors in deciding the appropriate split of college contributions between the parties. 

The parties in that case divorced in 2003 after 12 years of marriage.  An extensive PSA was incorporated into the parties’ Dual Final Judgment of Divorce (FJOD).  The PSA had several provisions related to college expenses for the parties’ only child.  It stated that they would contribute to college expenses in proportion to their respective incomes and financial circumstances at the time.     

The ex-husband (defendant) was required to pay $2,000 per year into a custodial account toward the balance of the child’s college expenses.  This contribution, however, only covered a small portion of the child’s first-semester tuition of over $33,000 at Georgetown University in 2016.

In July 2016, the ex-wife (plaintiff) sent defendant a spreadsheet of college preparation expenses that she had paid up to that point and requested that the parties exchange tax returns to determine their respective contributions.  Plaintiff asked for a reimbursement of almost $1,300 when the parties could not agree.  Instead, defendant applied the $20,000 that was saved under the PSA to the first tuition bill.  The balance of $12,000 was paid by each party and defendant did not reimburse plaintiff.    

Later in 2016, plaintiff filed a motion to enforce the relevant college contributions provisions under the PSA and specifically asked for a split by which defendant would bear two-thirds of the expenses.  She also renewed her request for reimbursement of college preparatory expenses.        

In defendant’s cross-motion, he sought to enforce his rights under the PSA based on plaintiff’s alleged failure to comply with its terms.  He also requested a modification of his child support and discovery of certain financial information from plaintiff to prove that she was the beneficiary of a trust.  J.P. Morgan, the trustee, stated that the daughter was not a beneficiary of the trusts set up for plaintiff.  Plaintiff argued that the trusts were intended to preserve the assets for the future benefit of the parties’ daughter and plaintiff’s other descendants. 

The parties’ case information statements (CIS’s) revealed that defendant had a net income of approximately $217,500 and expenses of almost $15,000 per month.  He is now remarried with another child.  Plaintiff’s CIS, on the other hand, showed net income of almost $90,000 and expenses of $11,000 per month.      

The judge issued several orders, the most important of which included the following: (1) defendant pay seventy percent of the child’s college expenses; and (2) defendant reimburse plaintiff nearly $10,000 for college preparatory expenses.  Another order denied defendant’s cross-motion but granted his requested modification of child support down to $200 per week.

The decision was supported by the Newburgh factors.  The judge found that the parties had the “financial wherewithal to meet” the needs of their daughter’s college expenses.  The judge’s 70/30 split of college contribution was based on the parties’ incomes in 2015 of $217,000 for defendant and $91,000 for plaintiff. 

In granting defendant’s request for a downward child support modification, the judge took into account the parties’ increased incomes, the number of days the daughter would be home from college, and her overnights with each parent. 

On appeal, defendant argued the following: (1) the judge erred by considering the parties’ incomes in allocating college costs without accounting for the parties complete financial picture, including the alleged trusts set up for plaintiff; (2) the judge failed to separate reasonable from unreasonable purchases in ordering reimbursement of college preparatory expense; and (3) the judge improperly applied the Newburgh factors in allocating college expenses.

The Appellate Division affirmed the judge.  It found that, with respect to the allocation of college expenses, the judge correctly excluded plaintiff’s trusts in the determination because there was no evidence that plaintiff or the child had the ability to exercise control over the trusts or compel distributions.  Plaintiff merely held a power of appointment in the trusts upon her death.  The Appellate Division recited the Newburgh factors, the most important of which include the following: (1) whether the parent, if still living with the child, would have contributed toward the costs of the requested higher education; (2) the effect of the background, values and goals of the parent on the reasonableness of the expectation of the child for higher education; (3) the amount of contribution sought by the child for the cost of higher education; (4) the ability of the parent to pay that cost; (5) the financial resources of both parents; (6) the financial resources of the child and his or her ability to earn an income during the school year; and (7) the child’s relationship to the paying parent.

Noting that the parents’ ability to pay is the most important factor, the Appellate Division found that the judge emphasized this factor and took into consideration the parties’ other financial resources listed in their CIS’s.  The Appellate Division further stated that the terms of a PSA, while given great deference, can be altered by the court where a change in circumstances renders the agreement inequitable. 

If you have any questions regarding college contributions and/or child support, please contact the skilled matrimonial attorneys at Sarno da Costa D’Aniello Maceri LLC.  Call us today at (973) 274-5200.