This New Jersey divorce attorney has confronted many challenging issues over the course of my career. One situation that is difficult to resolve is when one of the spouses parent’s help support the family lifestyle. Divorce is hard enough financially on most families. As a New Jersey divorce lawyer I have predictably met many folks who have been living beyond their means. However, now one of the spouses face a more radical decrease in their standard of living, things get ugly. Let’s explore.
Picture this: You and your spouse have just gotten married, but are struggling a little to pay the bills like most newlyweds do. Who do you turn to? For many of us, it is our parents. Let’s say that your spouse’s parents start to help you out, giving you a small amount of money each week to ease your financial troubles. The money is a huge help and your spouse’s parents see that. That is why they decide to continue giving both of you money each week to the point that you both know it is coming and basically count it as additional income. As time passes, you and your spouse are more on your feet and do not spend all of the money received periodically by your in-laws. Instead, your spouse deposits the remaining money each week not spent into his or her own checking account.
A few years pass and now your once happy marriage is falling apart. Your spouse tells you he or she wants a divorce. What happens to all of the money that his or her parent’s gifted you throughout the years? While your spouse has saved the excess money in his or her personal checking account, aren’t you entitled to some as well? After all, the money did come in during the marriage. Can you petition to the court for your soon to be ex-spouse to continue supporting you using the gifted money? The answer is that it depends.
The first thing that must be determined is if the gifted money is marital property or separate property. Marital property is often defined as property acquired during the marriage. On the other hand, separate property is defined as property that each party owned individually prior to the marriage. Typically, the only way for separate property to become marital property is if a spouse can prove that he or she contributed to the increase in value and quality of the property throughout the marriage. While in the situation described above, it may appear that money being gifted by one spouse’s parents is considered separate property. However, in reality it is definitely marital property. No matter whose parents are gifting the funds, they are being gifted to the couple as a whole throughout the marriage to help alleviate financial burdens.
Once it is determined that the money is considered marital property, a court will look to see if it should be used to continue supporting pendente lite the other spouse upon a divorce. The New Jersey case that focuses on this issue is Tannen v. Tannen, 417 N.J. Super. 248 (App. Div. 2010). In Tannen, the parties were married for eighteen years. The defendant wife was the beneficiary of a discretionary support trust that her parents had settled and was a trustee of the trust, along with her parents. After the eighteen years of marriage, the parties filed for divorce. At the trial court level, the judge decided to impute income from the trust to the defendant, and ordered that she as a trustee receive monthly payments. Additionally, the trial court held that the trust would continue to make payments for expenses it had made throughout the marriage. Once the judge decided this, he computed the plaintiff husband’s maintenance obligation based upon the imputed income.
On appeal, the court reversed the judgment as to the provisions regarding the computation of the maintenance award, among other awards. The court held that the defendant wife’s interest in the trust was not an asset held by her for purposes of New Jersey’s maintenance statute, particularly §2A:34-23(b)(11). Since this was the case, no income should have been imputed to her.
If you have serious concerns about the longevity of your marriage, this New Jersey divorce attorney as this advice. If you are going to borrow a significant amount of money from your parents, both you and your spouse should sign a Promissory Note. This is truly the only way they (and yourself) can be protected under New Jersey divorce law.