What is a Prenuptial Agreement?

A prenuptial agreement is a popular way to safeguard your assets and financial security in the event of a divorce. Prenuptial agreements protect a variety of pre-marital assets including real estate, investment accounts, trusts, and foreign assets. Notably, if a couple is seeking a prenuptial agreement in the state of New Jersey, both parties must disclose all assets and obtain independent legal counsel.

The primary benefit that prenuptial agreements provide is less litigation in the case of a divorce. Prenuptial agreements can also help the family of one spouse in the event that there are shared assets such as a family business.

Who Should Pursue a Prenuptial Agreement?

A prenuptial agreement is highly recommended for certain people. For example, if you own a business, expect to inherit a sizeable amount of money, have/earn significantly more than your spouse, or are marrying somebody with significant debts, pursuing a prenuptial agreement may be in your best interest.

Concerns with Prenuptial Agreements

Many couples are against prenuptial agreements because they feel that it may impact their marriage long-term. However, prenuptial agreements are highly customizable to the specific couple. In New Jersey, many couples decide to opt for a “sunset clause” which enables them to void the agreement after a certain duration of married time has passed.

If you decide not to pursue a prenuptial agreement, high-asset divorces can become particularly intensive to litigate.

One of the primary causes of conflict during a divorce is the distribution of marital property. In other words, the distribution must be equitable, or fair, but it does not have to be equal.

It is very important that you understand the difference between separate property and marital property. In general, property that you owned before you were married or after you or your spouse filed for divorce is separate property. Property bought while you were married and before either of you filed for divorce is marital property. However, there are a few exceptions. In addition to property bought before the marriage or after the filing for divorce, there are two types of property that are excluded from equitable distribution:

• gifts intended for one spouse only that were not given by the other spouse and
• an inheritance specifically left to one spouse.

Inevitably, equitable and fair distribution of marital assets becomes much more clear if a prenuptial agreement is filed.

How to Pursue a Prenuptial Agreement

If a prenuptial agreement seems like something that could benefit you and your family, the first step is to reach out a reputable New Jersey attorney. Here are some general considerations to make when deciding on an attorney to represent you:

• is accessible
• shows compassion to your family
• is experienced in both negotiation and litigation
• offers a valuable initial consultation
• has the best interest of you and your future spouse

The next step is to schedule an initial consultation with your attorney in order to begin formulating a comprehensive prenuptial plan for your fam

Retirement Assets

New Jersey is an equitable distribution state. That means that when a couple divorces, marital property is divided equitably, or fairly, but not necessarily equally. In general, retirement assets are subject to equitable distribution. However, contributions made before the marriage took place or after a divorce complaint is filed may be excluded. This also applies to any interest earned on these contributions.

ERISA

Some types of retirement accounts are subject to the Employment Retirement Income Security Act, or ERISA. This federal law sets minimum standards for most voluntarily established private-sector pension and health plans. Its purpose was to protect individuals in these plans. Most corporate accounts, such as 401k plans, fall into this category.

QDROs

Funds from retirement assets based on plans covered by ERISA can be distributed to a former spouse only if a QDRO is ordered by the court and approved by the plan administrator.

When entered as part of the equitable distribution of marital property in a divorce or legal separation, the QDRO specifies how the account is valued and exactly what the former spouse’s share of the assets will be. In some cases the recipient will be able to take that share immediately and roll the money over into his or her own retirement account (IRA). In other cases the former spouse might have to wait until retirement actually occurs.

Think Long Term

When you are going through a divorce, retirement may seem to be in the distant future. You may be tempted to give up retirement assets in exchange for another marital asset, such as your home. Be sure to consider all factors, such as the return on those investments, before making any decision. Giving up your share of retirement assets can have an adverse effect on your future finances.

When retirement and other substantial assets are involved, it is important that you obtain the advice of an experienced New Jersey divorce lawyer.

Do you have questions about retirement assets, QDROs, equitable division of marital property, or other divorce issues? The experienced equitable distribution attorneys at Aretsky Law Group, P.C., can answer your questions.

As of now, Mariah has refused to return it. Legally speaking, however, the answer is “that depends.” Although Mariah and James had discussed a prenuptial agreement, none had been signed. Without proof that the ring was an outright gift with “no strings attached,” whether or not the ring has to be given back depends upon the state whose laws will govern.

Engagement rings are generally considered by the courts to be conditional gifts. In other words, it is assumed that the ring is given with the expectation that a marriage will take place. However, laws regarding whether or not the ring must be returned if the giver wants it back after the couple breaks up vary from state to state.

Because the couple had been living together in California, the case could be heard in that state if the case goes to court. However, the ring was purchased in New York, so there is also a chance that New York’s laws would apply. The laws in these two states differ.

If California Laws Govern

Like the laws of most states, California laws treat engagement rings as conditional gifts, but it is one of the few states to take a “fault” view of whether or not it must be returned. Unless there is a written agreement stating otherwise, the following guidelines would be followed:

• If the giver breaks the engagement, then the recipient can keep the ring.

• If the recipient breaks the engagement, then the ring must be given back.

Under certain circumstances the judge might take into consideration the reason the recipient broke the engagement and allow the ring to be kept. An example might be unfaithfulness on the part of the giver.

If New York Laws Govern

New York laws also consider an engagement ring to be a conditional gift, but unlike California, New York courts take a “no-fault” point of view. They do not take into account what caused the breakup or who broke the engagement. Unless there is a written agreement or other proof that the gift was unconditional and meant to be kept no matter what, then the ring must be returned to the giver if the giver wants it back.

In the case of Mariah Carey and James Packer, it would obviously be to Mariah’s benefit if California laws applied if the case goes to court.

What if New Jersey Laws Governed?

New Jersey laws consider an engagement ring to be a conditional gift unless there is a prenuptial agreement or other proof that the ring was meant to be an unconditional gift.

Like those in New York, New Jersey courts take a “no-fault” view regarding the return of the ring. Who is to blame for the breakup of the engagement is generally not taken into account.

If the recipient refuses to give back the ring, the giver can file a lawsuit.

On the other hand, if the recipient believes that the gift was not given conditionally, she can fight that lawsuit. Her New Jersey attorney might be able to show that the ring was an outright gift. These are some of the circumstances that might be cited:

• The couple has a prenuptial agreement or other written document stating

that she should keep the ring even if the engagement is broken.

• The gift was a birthday present.

• The gift was given on Valentine’s Day, Christmas, or another holiday.

The judge would have to determine the giver’s intent at the time.

Do you have questions about prenuptial agreements or any other divorce and family law issues? Call Aretsky Law Group, P.C., 24/7 at 800-537-4154.

Property distribution NJ divorce

The Associated Press has reported that the wife in an Illinois divorce case—Nancy Riddle v. John Riddle—filed an emergency petition with the court. What was the emergency? The emergency was that her soon-to-be ex-husband had tickets to the Chicago Cubs against the Cleveland Indians in Game 5 of the World Series. He planned to take their 12-year-old son to the game. Both John and Nancy were loyal Cubs fans.

Nancy Riddle held that the situation was an emergency because the Cubs had not taken part in a World Series in 71 years, and if she did not get to see them now, it was likely that she would never have another opportunity.

The judge ruled that John Riddle could keep the two tickets and take their son to the game as planned, but added that he also had to purchase a ticket, which will probably cost at least $3,000, for his wife.

What If This Case Had Taken Place in New Jersey?

Like Illinois, New Jersey is an equitable-distribution state rather than a community-property state. In both states, marital property is divided fairly, but not necessarily equally.

When deciding how to equitably divide property, the court must first determine which property is marital property and which is owned separately. In both Illinois and New Jersey, assets obtained by either spouse after the marriage took place and before either spouse filed for divorce is subject to equitable distribution when the marriage is dissolved. Exceptions are gifts and inheritances.

Important Factors in Riddle v. Riddle

John Riddle acquired the tickets after he married Nancy Riddle and before either of them filed for divorce.

The tickets were neither a gift nor an inheritance.

Therefore, the tickets were marital property.

The judge in this case felt that equitable distribution should involve an additional ticket for Nancy Riddle.

A New Jersey court would also consider the tickets marital property; however, another solution may have been suggested.

Should an Emergency Petition Have Been Filed?

Whether or not the circumstances should have been considered an emergency is more subjective. Did the fact that the Cubs had not taken part in a World Series since 1945 and that it is unlikely that Nancy would have another opportunity to attend a Cubs World Series game warrant the granting of an emergency petition? Opinions will vary. Cubs fans will probably say, “Yes!”

Do you have questions about marital property and property distribution in a New Jersey divorce? The experienced attorneys at Aretsky Law Group, P.C., can answer questions regarding these and other divorce and family-law issues. For an initial consultation, call us 24/7 at 800-537-4154.