On Aug. 14, 2000, N.J.S.A. 2A:17-56.23b (commonly known as the child support judgment lien statute) became law in the state of New Jersey. This statute creates a lien against a beneficiary’s inheritance for the purpose of satisfying a judgment against that beneficiary for unpaid child support. The statute codifies the strong public policy toward payment of child support obligations and gives preferential treatment to creditors. The statute explicitly places the burden of enforcing such liens on the estate’s executors or administrators. With the increased popularity of testamentary transfers taking place outside of probate, such as with trusts and other transfer-on-death arrangements, the impact of this statutory framework on those non-testamentary transfers is less than clear.
The Statute
The statute provides that “A judgment for child support entered pursuant to P.L. 1988, c. 111 (C. 2A:17-56.23a) and docketed with the Clerk of the Superior Court shall be a lien against the net proceeds of any settlement negotiated prior or subsequent to the […] inheritance.” The term “net proceeds” is defined as any amount of money, in excess of $2,000, payable to the beneficiary after attorney fees and such other enumerated fees and costs.
