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Owning an asset prior to your marriage does not necessarily guarantee that the asset will be immune from division in the event of divorce. Generally, when an asset is brought into a marriage, the asset is exempt from division, however, there are exceptions. For example, if a party uses his or her separate funds to purchase a residence in his or her name shortly before the marriage and the home is later used as the martial home, the purchase may be considered to be “in contemplation of the marriage” and therefore transformed into a marital asset. This may be the case even if the home was titled in only the owner spouse’s name throughout the marriage. Also, a home purchased prior to marriage may become subject to distribution in the event of divorce if the property is maintained or improved with money or non-monetary contributions during the marriage.
Also, when added contributions or improvements made to pre-marital property during the marriage increase the value of the property, the appreciation in value may be considered as having been “acquired” during the marriage and therefore subject to distribution in the event of a divorce. Similarly, an IRA, brokerage or retirement account acquired prior to the marriage may increase in value over the course of a marriage. If the increase in value was a result of additional contributions to the IRA or other account, the increase would be considered acquired during the marriage and subject to distribution. However, if an account simply increases because of market conditions it is exempt. Additionally, if an investment account owned prior to the marriage increases in value during the marriage and the increase is brought about solely through the efforts of the owner spouse, that value is not distributable. However, conversely, if the value was derived in part or whole from the efforts from the non-owner spouse, it may be subject to distribution.
Additionally, the commingling of pre-marital assets with joint assets acquired during the marriage may effectively transform an otherwise pre-marital asset into a marital asset subject to distribution. For example, a spouse deposits pre-marital funds into a joint bank account with marital monies. The separate funds have been commingled with the joint account monies and are now arguably subject to distribution.
A spouse with separate pre-marital property must therefore be cautious as to where the money is going to be deposited, how the funds are going to be used, and who is going to have access. Otherwise, commingling of such funds can ultimately render it marital property subject to distribution in the event of divorce. The best way to protect your interest in pre-marital assets is to enter into a pre-nuptial agreement that outlines each party’s right to retain his and her separate property owned prior to the marriage in the event of divorce. Contact an attorney at Iandoli & Edens, LLC at 908-879-9499 to discuss your rights.
In New Jersey, as in many other states, marital fault is not considered by the courts when making financial awards, either alimony or equitable distribution. In other words, even though your spouse may have cheated on you or otherwise acted inappropriately during the marriage, you will not be able to receive additional marital compensation based on that fact alone. The only exception is what is called a Tevis claim where a spouse can ask for monetary damages for physical or emotional abuse. These claims are treated as a personal injury claim by the court.
To overcome this, many couples are building these claims into their prenuptial agreements, asking for specific monetary relief if their spouse commits a certain act. For example, reportedly, pursuant to Denise Richards and Charlie Sheen’s prenuptial, either party would receive $4,000,000 if the other committed adultery.
A prenuptial can also be quite a bit more one sided. It is reported that according to Michael Douglas and Catherine Zeta-Jones’ prenuptial, Catherine would receive $5,000,000 should Michael Douglas cheat on her.
Although it appears most common that married people feel they should be financially compensated for infidelity, prenuptial agreements can address other types of marital fault as well. It is written that Nicole Kidman and Keith Urban’s prenuptial states that if Keith does any illicit drugs, he will forfeit the other provisions in the prenuptial that provide for him financially should they divorce.
To talk to an attorney experienced in preparing prenuptial agreements, contact one of the lawyers at Iandoli & Edens at (908) 879-9499.
There is always something happening in Newark, New Jersey so I knew this morning would be no different. I opened the heavy chamber doors and entered the Judge’s courtroom. Waiting for my case to be called, one could not sideswipe the fact that the courtroom was packed – like Kim Kardashian’s Louis Vuitton suitcase. The Judge was on the bench illuminating his vibrant personality – as always, he would not disappoint this crowd today. This particular brisk and sunny morning was notably more memorable than others. There were far more people sitting past the bar, which elevated interest right away to anyone who was fortunate enough to be a part of the audience.
At first, it appeared to be your usual cast of characters. There was the wife siting to the right. She was strikingly beautiful and appeared surprisingly composed. Her attorney, who sat immediately to her right, appeared relaxed, poised but noticeably bothered. There was an interpreter, repeating every word to the wife in Spanish. The interpreter whispered, “Es un regalo y nada mas.” Her attorney argued, “Judge, the father-in-law gave the parties the money. It was a gift, Judge. My client will not repay monies which will serve only to unjustly enrich the Defendant.”
The Judge’s eyebrows elevated far into his hairline. “Defendant certifies to this Court that the monies were a loan. He certifies he must repay this money to his father. Your client would, as a result, be unjustly enriched, counsel. This would not be a fair result, contrary to the objectives of the chancery division!”
To my left was the Husband; a robust young man, evidently upset and distraught. His hand met his head several times throughout the hearing; his forehead wrinkled with stress. He gawked at the Judge repeatedly as if to subliminally persuade the Judge he was right. Husband’s counsel was standing with his right arm raised towards the detailed vaulted ceiling, as to call the attention of the One above. A bit dramatic, he was most certainly effective. His theatrical gesture, revealing tone and three-piece Armani suit was fittingly convincing. “You see, Your Honor, the money could not have been a gift, it was a loan. Wife wants to benefit financially from this, Your Honor. She is being greedy. Pigs are greedy. Pigs get slaughtered.” I told you he was dramatic.
The Judge had heard enough. “Do you have a promissory note, signed by both parties? Do you have cancelled checks? Do you have proof of the interest paid or a portion of the base amount paid? No! You don’t! I have nothing before me to indicate this was a loan.”
Everyone in the room understood. This one was not going to be easy.
To complete the cast of characters, to the far left was an elder man, approximately in his late 60s. He had an interpreter lagging with a 15 second delay. The popular senior was allowed to intervene as a third party holding an interest in the outcome of the case. He sat up straight and had his sweaty palms grasped securely on his lap. He was holding onto the Judge’s every word. Next to him was his lawyer who commendably repeated, “It was a loan! It was a loan!”
The Judge continued, “Here is what I will do. I will order that the monies be held in trust for the benefit of the parties’ two year old son to be utilized towards his college degree.” Well, there’s a twist. I could almost hear an applause from the audience; but, then again, that might have just been me witnessing a judge vexing to do the right thing. How beautiful. “If there are any objections to this, I will hear them now.”
Fifteen seconds later, “Alguien en contra …” The elder man raised his hand as high as did the sassy lawyer. The interpreter appealed, “I object. It was a loan and I want to be repaid.”
The Judge sighed and shook his head. He ordered a hearing. The wife and the husband would be required to spend thousands of dollars on a mini-trial for what could have been easily prevented with a simple document evidencing the intent of the parties.
Distinguishing whether monies were intended to be a gift or a loan can be costly to both parties. We can help you gather the information you need to prove your case. Contact an attorney at Iandoli & Edens, LLC to learn your rights. We are here to help. 908-879-9499.
Ever wonder if you would be able to keep your engagement ring if you got a divorce? In some cases, an engagement ring may be one of the most valuable assets a person owns and perhaps one of the most sentimental. The engagement ring has a special significance to each spouse. However, the sentimental nature of the ring may create an additional dispute at the time the parties move forward with a divorce. This is especially true when there are few assets to divide, there is significant debt and salaries have been reduced.
What if the engagement is called off immediately before the wedding? Who gets the ring? Jennifer Lopez and Ben Affleck called off their engagement just hours before their wedding. Under New Jersey law Jennifer would not be entitled to keep the ring because the wedding did not happen. However, those individuals that do not cancel their wedding, such as Chelsea Clinton, will be able to keep their ring after divorce.
The courts of the New Jersey view the engagement ring as a conditional gift. In other words, the ring should be returned when the engagement is broken. Once the parties marry, the condition of the gift has been met and the engagement ring generally becomes the sole property of the recipient unless there is a written pre-nuptial agreement that states otherwise.
In recent months, there has been tremendous speculation in the news regarding the terms of Tiger Woods’ Pre-Nuptial Agreement and how Elin will fair in the divorce. However, few people understand what a Pre-Nuptial Agreement is and how it effects divorce litigation. Perhaps even fewer people know that Pre-Nuptial Agreements are not just for the rich and famous and can be used by anyone contemplating marriage.
A Pre-Nuptial Agreement is an agreement made between prospective spouses in contemplation of their marriage. The purpose of the agreement is to define the interests, rights and obligations of each spouse prior to the marriage. These agreements can define anything from how the marital living expenses will be paid to how the parties will file their taxes.
However, most often, parties enter into Pre-Nuptial Agreements in order to set forth each party’s rights and obligations in the event of their separation or Divorce. If the Pre-Nuptial Agreement is drafted properly, it could help the parties avoid difficult and costly divorce litigation. Typically the issues of property distribution and spousal support are detailed in a Pre-Nuptial Agreement. One of the benefits of a Pre-Nuptial Agreement is that parties can preserve their pre-marital assets. Another important benefit of a Pre-Nuptial Agreement may be to deal with end of life issues. Perhaps the most talked about case dealing with this issue is that of Anna Nicole Smith and her marriage to billionaire J. Howard Marshall. However, there are many famous people that should enter into Pre-Nuptial Agreements but do not. It is curious whether Chelsea Clinton signed a Pre-Nuptial Agreement prior to her marriage.
The terms of each Pre-Nuptial Agreement vary depending on the parties and their respective situations. To determine if a Pre-Nuptial Agreement is right for you and your prospective spouse, call our office for an appointment. (908) 879-9499
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