The final step in the settlement of your New Jersey divorce is the preparation of a Marital Settlement Agreement (“MSA”).
Whenever I am asked for legal advice regarding an issue which has arisen after a New Jersey divorce, the first document that I will review is the MSA.
Far too often, I find that the issue could have been avoided, if only the MSA had been more carefully and precisely drafted. The additional legal fees incurred in having a very experienced New Jersey divorce lawyer prepare the MSA pale in comparison to the cost of litigating an unnecessary dispute after the divorce.
A decision which has just been released by a New Jersey appeals court perfectly illustrates this point. In Grella v. Rumer, both parties were represented by lawyers when they entered into an MSA several years ago.
In that MSA, they agreed that the husband would be entitled to remain in the former marital home and that no later than 2014, he needed to pay his wife 50% of the equity that was built up during their marriage either by selling the home or purchasing his wife’s interest. .
However, the MSA did not state the amount of that equity.
The husband had the house appraised five (5) years after the parties were divorced, when he was required to make the payment. At that time, the house had negative equity (the principal balance of the mortgage loan was higher than the fair market value of the house).
Therefore, the husband made a motion to modify the MSA, on the basis that the parties had been mutually mistaken in believing the home had equity at the time of the divorce.
The trial court denied that motion, and the husband then undertook the additional cost of appealing that decision.
The New Jersey appeals court affirmed the trial court’s decision, noting that the wife’s portion of the equity in the home was calculable at the time of divorce.
Hopefully, the parties can now resolve the issue, without the husband incurring yet additional litigation expense. Given the wife’s contention that her former husband had unilaterally increased the debt on the home, it may be difficult to reach a settlement.
Salvaggio Law Group LLC devotes its entire practice to New Jersey divorce and family law matters. If want to talk you call us at (973) 455-1220 or fill out the Contact Form on our website.