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Archive for July, 2016

Settlement Agreement on College Contributions

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Catabran v. Catabran, was decided on June 16, 2016.  The appellate court affirmed the Morris County Family Part opinion that the parties settlement agreement to share the children’s college costs equally is enforceable.  The case evolved from an issue arising post divorce (known as post-judgment dissolution matter).  The parties settlement agreement stated clearly that the “net college cost will be split equally by both parties.”  The appellate court held that absent changed circumstances, where parents’ matrimonial settlement agreement clearly provides that they will share their children’s college costs equally, a court need not apply the factors set forth in Newburgh v Arrigo, 88 N.J. 529, 545 (1982), to determine whether a parent should contribute to a child’s college costs and the extent of the contribution.

The Catabran case is an example of why college expenses addressed in the Matrimonial Settlement Agreement should not be overlooked.  College Contributions addressed in Matrimonial Settlement Agreements should not obligate a parent without addressing the factors in Newburgh v. Arrigo.  The Agreement should address college contributions “in proportion to the parents ability to contribute.”  These simple words in Matrimonial Settlement Agreements have an extreme impact on the parties financial future. Usually, when the child reaches junior year of high school, the parties exchange CIS to determine their ability to contribute towards college expenses.  If the parties are unable to reach an agreement, the trial court will set up a plenary hearing.  In family matters, a plenary hearing is ordered when there is material fact in dispute such as the parties ability to contribute towards college expenses.  A plenary hearing gives both parties the ability to present evidence, witnesses, cross-examine and argue their position.

When drafting settlement agreements attorneys must be mind full of not obligating their client in the future.  A settlement agreement should have the parties share of college contribution only if the child is in college already or will be within the next two years.