Divorce Series Part 2: New Jersey Divorce Guide
My name's Robert Bonavito, New Jersey forensic accountant. This video is part of a series of videos where I discuss forensic accounting topics for educational purposes only. If this was a litigated matter, I would take a different approach, have different conclusions based on different factors.
Hi everyone. Welcome back. This is part two of a nine-part series on matrimonial and divorce in New Jersey and this is titled "Divorce in New Jersey" and the reason is because we're going to discuss some information about New Jersey and understand how many people are getting divorced, that type of stuff. This is really a background, and like I've said in other videos, this is based on a seminar I gave a couple of weeks ago. Now, in New Jersey, which is a pretty big state, almost nine million people, the number of marriages, number of divorces, and number of attorneys is relevant, you know, if you're going to be a forensic accountant, you're a lawyer, or if you're getting divorced because you understand what kind of resources are out there.
So everybody's heard the rumors, well, listen, the chances of getting divorced are 50% but let's take a look at the actual statistics for New Jersey. For New Jersey, the number of marriages are about 50,000 a year. It's a lot, especially if you're in the wedding business, right? Number of divorces, let's see, 23,000. So almost half, right? That was pretty accurate. And number of attorneys, this is the key, right? Number of attorneys. It's 41,000, a little over 41,000. So what this tells you is that there are a lot of people getting married and a lot of people getting divorced in this state. So, you know, if you're in the field or you're getting divorced, you should be able to find lots of information on this.
Now, a couple of things that this tells us is one, there's almost two attorneys for everyone getting divorced, right? And remember, number of divorces means there's two people looking for attorneys, right? So it's like one to one. So number of divorces is 23,000, each person getting divorced is like 40,000. So when you're picking out a law firm or a forensic accountant, you want to make sure they're experienced, right? Because there's obviously a lot of attorneys and not all of the attorneys practice forensic accounting or are familiar with matrimonial law, and same thing with forensic accountants, right? And the other thing is New Jersey is a big state and there's lots of activity. New Jersey, in fact, is a quarter of the size of Canada, it's bigger than half the countries in the European Union. So if you're getting divorced, there seems like there'd be lots of information you could get, and remember, each state is different, right? So you really need someone who understands New Jersey law, who understands New Jersey accounting, understands all those issues.
Now, let's take a look at some divorce guides because if you're getting divorced or if you're a forensic accountant, you want to understand what's out there. And a couple of things that I like because I love to find material that is written for a layperson, even though I've been doing this for 30 years, because it's just easy to read, easy to understand, that type of stuff. And the one thing is that New Jersey does have a guide called "Divorcing Your Spouse." Interesting title. And when you are getting divorced in New Jersey, you may want to take a look at this because it does have some interesting information. For example, let's say you have a tax issue, right? Innocent spouse or injured spouse relief because there's issues with your federal return. Well, guess what? New Jersey doesn't recognize that, right? It's different. How does New Jersey handle interest income, investment income, name changes and stuff like that? All that will be in this guide.
And you can ask your lawyer and your forensic accountant intelligent questions, right? Internal Revenue Publication 504. It's a pretty thick publication but, you know, it's kind of complex when you get divorced, right, because if you have children, are you head of household, married filing separate, what are the rates, that type of stuff, filing status, right? And then there's Form 8332, right? This is a form that you should be familiar with if you have children because what this has to do is release of claim of custodial parent and why that is important is because now the federal government gives you a $2000 credit for children, you know, and you may want to use that in a negotiation because if you have 3 kids, that's $6000 and that's a lot of money no matter who you are. And to understand this form, we're actually going to go through this form and answer some questions and stuff like that but this is a form you should be familiar with.
Alimony requirements. Everything's not alimony. QDRO. A lot of people, when they call me up, they're concerned about the taxability of their 401(k)s and IRAs but a lot of people get divorced, then they have something called qualified domestic release order, which enables you to split up that money tax-free, and we get involved in a lot of that stuff with the RSUs and things like that. The other thing is this guy here is really written for...it actually goes through the different aspects of divorce. Not only the financial but also the legal procedures, case management conferences. You know, you read this, this here, you'll really have a good understanding of how a divorce works in New Jersey and this is pretty thick, but again, it's written for a layperson. I like it, I use it every once in awhile, I think it's a great guide. And then lastly, one of the things you may want to do is look at njcourts.gov, and this gives you the names of the judges, their addresses, that type of stuff, where they are, how to contact them, and this is important.
Okay, guys. So listen, we covered...you know, this was a short one but I just wanted to give you a quick guide. You know what? One other thing I'm going to do here since we have some more time, I'm going to actually go through this form with you. Okay. This is the 8332 I spoke about. And here it is, you see it, revocation of release of claim. Okay? Exemption for trial. And what this does is, remember, if you have the child in your house for more than 50...there's some other rules, but generally, if he's in your care for over 50% of the time and you contribute a certain amount of money to his upkeep or her upkeep, you get to claim that child. But there may be circumstances when, you know, you may not be the moneyed spouse and you don't get a benefit or you do get a benefit and maybe you want the other spouse to claim. This will be a release that they would file with your tax return, and you can see, it's for three children, and like I said earlier, this could be a $6000 credit.
The other thing to remember is that to revoke this is very easy, you just have to write a letter, "I revoke it." And if there is an issue with the IRS, unfortunately, this is something that would be settled by the court, not the IRS because this is more of a legal issue than an IRS issue. So this form, if it's signed, you should send it in with the return if you're going to claim, especially if, you know, you're claiming a custodial parent when you aren't. But remember, this does not give you the right for head of household and a lot of the other credits you can get. Those are driven by tax code, internal revenue tax code.
So this is something that you should make sure your forensic accountant or lawyer have signed if it's something that's going to benefit you in some way, either by giving this credit up or by taking this credit. Okay, guys, listen. So we've covered a couple of things here. If you have any questions, just leave a note on the bottom of my YouTube channel. One of my analysts or I will actually get back to you. We look at every single comment and respond if it's good or bad, we don't get rid of them. And thank you for listening. New Jersey forensic accountant signing off.