Many years ago, the New Jersey Legislature passed a law creating a remedy called “equitable distribution,” which states the rules for figuring out how the marital assets and debts get divided in a New Jersey divorce.
If you and your spouse can’t agree, the New Jersey Family Court Judge will make that decision in a trial at the end of the case.
But what if there is no agreement and your spouse dies before the Judge can decide?
Some people may think that the answer is simple. Since my spouse is no longer around, they say, I get all of our joint assets.
Under New Jersey Family Law, it may be that simple—and it may not.
In a recent New Jersey divorce case called Beltra v. Beltra, the wife died in the middle of the case. Thereafter, the trial judge held a 5 day trial in which the representative of the wife’s estate was permitted to present evidence of what “equitable distribution” should have been.
After the trial judge decided that “equitable distribution” required that the wife’s estate get 50% of the marital assets and be responsible for 50% of the marital debts, the husband appealed.
The husband’s argument was that the remedy of equitable distribution is only available when a divorce is granted. Since his wife had died, he didn’t need a divorce anymore and so the trial judge could not have ordered equitable distribution of their joint assets. It didn’t matter that his wife had signed a Will, leaving everything to their 2 sons. Any assets in the joint names of his wife and him automatically passed to him as the surviving joint owner.
The New Jersey appeals court reversed the trial judge’s decision—but it did not agree completely with the husband.
The appeals court agreed with the husband that “equitable distribution” cannot be granted when one spouse dies during a New Jersey divorce case. However, the appeals court also pointed out that in “exceptional circumstances,” a New Jersey court may grant other forms of equitable relief after a spouse’s death, to prevent unjust enrichment or fraud.
Since the wife had accused her husband of hiding assets, the appeals court sent the case back to the trial court, to “determine whether exceptional circumstances are present to warrant granting equitable relief to [the wife’s] estate.”
Salvaggio Law Group LLC devotes its entire practice to New Jersey Divorce and Family Law matters, including issues relating to equitable distribution. If you want to talk, please call us at 973-855-3595 or fill out the Contact Form on our website.