Oral Palimony Agreements Ruling Made By New Jersey Supreme Court

oral palimony njOver the past few years there have been significant changes in how palimony in NJ could be awarded.  In September 2014, the New Jersey Supreme Court ruled on how the 2010 change in palimony requirements affected relationships that transpired prior to the change.

 

What is palimony?

Similar to alimony, palimony is court ordered financial support between two unmarried individuals after their relationship ends. Generally speaking, palimony is only awarded in cases where one of the two individuals relied upon the other financially in response to the assurance that they would be provided for. Often, the awards are based on the promise that one person in the relationship would take care of the other financially for the rest of their lives.  

How is palimony in NJ determined?

Before 2010, palimony in NJ could be awarded based on a promise of indefinite financial support even if there was no formal, written documentation of that promise. In 2010, the New Jersey legislature made a fundamental change to this by revising the New Jersey Statute of Frauds. The Statute of Frauds amendment now required that palimony agreements be made in writing and with the assistance of legal counsel. Without this documentation, any promise of financial support was decried unenforceable and nonbinding.  

How is the Statue of Frauds applied to ongoing relationships?

Despite the change to the Statute of Frauds, there remained a grey area in regards to some relationships in place prior to the amendment. The question posed to the New Jersey Supreme Court asked about relationships where a promise of support was made prior to the change in requirement.   

This question was raised in the case of Maeker v. Ross. Maeker and Ross’s relationship began in 1988 and ended in 2011. Ross filed for payment of palimony indicating that she’d left her career due to promises of financial support made by Maker. This was supported by Ross leaving a 20 year career and being named beneficiary for several of Maker’s assets. Maeker attempted to have Ross’s case dismissed on the basis that the request was in violation of the Statute of Frauds as the oral agreement was not enforceable.

The New Jersey Supreme Court ruled that the promise of financial support was made prior to the 2010 update and therefore the old law applied in this case.  Because of this ruling, promises of financial support made prior to the update of Statue of Frauds must be handled according to the old law.

What was the basis of the New Jersey Supreme Court’s ruling?

The New Jersey Supreme Court based their ruling on palimony in NJ on the following:

  • The change in the Statute of Frauds in 2010 was not retroactive.  Therefore oral palimony agreements made before the change do not require written documentation. 
  • At the time the agreement was made between both parties, it was believed that the agreement would be binding. There would have been no way for either party to anticipate the need for written documentation of the palimony agreement due to changes in the law.
  • There was no way to quantify or identify all oral agreements of palimony in NJ that occurred prior to the change in statute

This also means that individuals in long-term relationships that began prior to 2010 should take steps to protect themselves against palimony claims in the future. It is best to speak with a qualified divorce professional to address these concerns.

How should palimony agreements be handled going forward?

Palimony is a serious financial issue that must be thoroughly considered before it is agreed to. Both parties involved should carefully consider their options and the potential implication of the agreement before entering into a contract. 

Both parties should retain their own legal counsel that will advocate for their best interest. Once both parties are represented, negotiations should take place to iron out and document the agreement. Unless the palimony agreement is accepted and agreed to by both parties, it will be nearly impossible to receive palimony in NJ.

For valid palimony claims, consider working with a forensic accountant. Forensic accountants can perform many valuable tasks to ensure courts consider all pertinent information. Forensic accountants can assist to:

  • Locate and identify hidden assets.
  • Verify income levels of both parties, including non-traditional sources of income.
  • Identify and quantify debt.