Tuesday, August 25, 2009


Most divorce property settlement agreements in which alimony is a component will contain a clause regarding cohabitation by the alimony recipient. The clause is part of what many divorce lawyers call the boilerplate clauses, identified as standard, usual sections or paragraphs that appear in most settlement agreements. Many attorneys will give the boilerplate clause a cursory reading because they have seen them before. But to the divorcing couple boilerplate clauses can contain wording which may have subsequent unintended consequences. A cohabitation clause generally states that if the alimony recipient resides with another individual usually an unrelated person of the opposite sex (but not always defined as such) the alimony payer can seek court intervention to modify or terminate the alimony obligation. The reasoning behind the clause is to keep the alimony recipient from residing with the significant other and still reap the benefits of alimony. Consider the following cohabitation standard clause.

Alimony payments shall terminate upon the death of the Husband, the death of the Wife, the remarriage of the Wife, or in the event the Wife resides with any unrelated man without the benefit of marriage for a period continuing for beyond sixty (60) consecutive days.

In the above instance, if the wife resides with an unmarried male for over a specific time period the ex-husband can seek to terminate the alimony obligation. However, what happens if the wife decides to cohabitate with her new significant other who happens to be female? The above clause is silent on this subject and should the ex-husband seek to terminate the alimony the court would initially need to decide whether the ex-husband had any foundation to bring the matter to the court’s attention.

The court’s interpretation of cohabitation has provided two critical lines of thinking. In one instance the court looked at the relationship and opined that: “Cohabitation involves an intimate relationship in which the couple has undertaken duties and privileges that are commonly associated with marriage. These can include, but are not limited to, living together, intertwined finances such as joint bank accounts, sharing living expenses and household chores, and recognition of the relationship in the couple's social and family circle.”[1] In addition, “A mere romantic, casual or social relationship is not sufficient to justify the enforcement of a settlement agreement provision terminating alimony. Such an agreement must be predicated on a relationship of cohabitation that can be shown to have stability, permanency and mutual interdependence.”[2] In the same case but at the appellate level the court stated, “cohabitation is tantamount to a marriage”. [3]

In the second and different line of reasoning the court did not view the relationship as tantamount in considering cohabitation but rather the economic benefit the relationship provided to the alimony recipient. “In the changed circumstances of cohabitation modification is warranted when either the cohabitation contributes to the dependent spouse’s support or lives with the dependent spouse without contributing.”[4] The court went on to query whether the need of the dependent former spouse is reduced by the cohabitation. “It is the financial impact of cohabitation, not the relationship itself that triggers review of alimony obligations.”[5] “The test is whether one cohabitant subsidizes the other enough to warrant relief.”[6] “The reduction in financial need is the critical factor in the analysis of alimony modification.”[7]

Based upon the two lines of thinking that the court has professed, it becomes critically important that the drafter of a property settlement agreement and the divorcing couple understand what the term cohabitation means and when can someone subsequently invoke the clause to seek alimony modification. At Montclair Divorce Mediation, the term cohabitation is not just tossed into a boilerplate clause. But rather, cohabitation is explained to the couple and a range of options is presented so that the couple can make an informed decision. Fully documenting what the couple’s intent is during the drafting stage can keep the couple from costly future litigation.

Since the court also considered the economic benefit to cohabitation and not just a relationship it would be wise to consider the cohabitation clause as a potential area where the court in future cases will expand the definition of what constitutes cohabitation. Is it foreseeable that the court reject a relationship aspect altogether and look merely at finances? What about those instances when the dependent spouse receiving alimony takes in roommates to make ends meet? Perhaps it would be advisable to include such provisions at the drafting stage rather than wait for future court interpretation.

[1] Konzelman v. Konzelman, 158 N.J. 185 (1999)
[2] Konzelman, ibid.
[3] Konzelman v. Konzelman, 307 N.J. Super. 150, 161 (App. Div. 1998), affirmed 158 N.J. 185 (1999)
[4] Garlinger v. Garlinger, 137 N.J. Super. 56, 64 (App. Div. 1975)
[5] Gayet v. Gayet, 92 N.J. 149, 155 (1983)
[6] Boardman v. Boardman, 314 N.J. Super. 344 (App. Div. 1998)
[7] Conlon v. Conlon, 335 N.J. Super. 638, 649 (Ch. Div. 2000)

Wednesday, August 5, 2009

The Engagement Ring

The engagement ring is a symbol that conveys love and commitment. Presented usually by the man to his fiancĂ©, the ring is hope, the future, and when coupled with the wedding ring, everlasting unity. But what happens to the engagement ring when the marriage doesn’t last? This question normally arises when the marriage is of short duration. The return of the engagement ring usually becomes a sticking point for the man. The ring takes on more significance than its financial value in some divorce cases. Indeed, the arguing prior to a trial of who gets the ring in a divorce can cost more in time and attorney fees than the ring’s resale value. The engagement ring can become a very emotional issue to some divorcing couples.
In the case, Winer vs. Winer,[1] the court was faced with answering this question, as well as whether the condominium purchased prior to the marriage by the husband was part of the marital property and subject to equitable distribution. To the New Jersey court, the engagement ring was determined to be a conditional gift which was presented by the giver to the receiver who in consideration of receiving the ring promised to marry the giver. If the engagement was subsequently called off, the receiver must return the ring. But once the couple completes their wedding vows, the engagement ring belongs to the receiver and is not part of marital property and thus not subject to equitable distribution in a divorce. The court took an interesting view of the engagement ring in light of other assets in the case. The court did not view the ring as consideration for a continuing promise of marriage or part of a particular set, such as the engagement and wedding rings, nor did it view the ring as an object acquired in contemplation of marriage which according to this same case, would subject an item to equitable distribution.

In reviewing the facts of the case we learn that Mr. Winer proposed marriage and thereafter purchased a condominium with his own funds with the intention that it was going to become the marital residence. After the couple married they resided in the condo for a few years. Consequently, during the divorce Mrs. Winer sought half of the value of the marital residence. The court relying on an earlier case, Weiss vs. Weiss,[2] opined that a date prior to the marriage ceremony may be used for determining what property is subject to equitable distribution. The court quoted from the Weiss opinion:

“We believe that for the purpose of triggering a right of equitable distribution a marital partnership may be found to have commenced prior to the marriage ceremony, where the parties have adequately expressed that intention and have acquired assets in specific contemplation of their marriage. This conclusion recognizes that the shared enterprise of marriage may begin before the actual marriage ceremony through the purchase of a major marital asset such as a house and subsequent improvements to that asset.”

As a result, the court declared the condo to be part of the marital assets and Mrs. Winer was entitled to share in its value. It is interesting that the same court did not consider the purchase and presentation of the engagement ring to be an expressed intention of a shared enterprise and in contemplation of the marriage. Rather, the court viewed the giving of the engagement ring, its acceptance and the marriage ceremony to be a complete transaction in of its self.

Perhaps it’s time to revisit the notion that the engagement ring is not part of the marital assets. This would certainly be a relief to many divorcing husbands in at least knowing that the ring’s ownership and value is not predetermined.

[1] Winer v.Winer, 241N.J. Super 510 (App. Div. 1990)
[2] Weiss v. Weiss, 226 N.J. Super. 281, (App. Div. 1988), certif.. den., 114 N.J. 287 (1988)