In the recent decision of Roik v. Roik, ___ N.J. Super. (App.Div.2024), the appeals court reversed the trial court when it failed to enforce a MSA signed by the parties before the death of the husband and before the entry of the final judgment.
The Roiks were married for 46 years when the plaintiff filed for divorce. They had three emancipated children and various assets that required equitable distribution. The parties executed a Matrimonial Settlement Agreement (MSA) in November 2021. The case was then scheduled for a hearing to have the court grant the final judgment. The plaintiff sought to have the divorce done “On the papers” or by signing an affidavit, which he did on December 25, 2021.
The plaintiff objected to the divorce on the papers and claimed that it would be more expensive, since it takes more time to prepare the paperwork, than to have a quick 30-minute hearing by Zoom. (As an aside, she is correct about this. Divorce by Zoom is much less expensive and easier than divorce on the papers.) Unfortunately, the plaintiff died on December 29.
The plaintiff ’s estate sued to enforce the MSA. In what we know to be a clearly erroneous determination, the trial court denied the motion claiming that the estate was not entitled to a constructive trust because there was no wrongdoing by the defendant and that there was no way for the court to determine the intent of the parties without questioning them. While the remainder of the appeal is interesting, the reality is that the trial judge simply missed the boat on this. When your attorney warns you to avoid court, this is why.
The MSA clearly contemplated that the parties felt the agreement was fair and equitable. The MSA clearly stated the parties’ intent to be bound by the terms effective the date the agreement was executed. Plus, the plaintiff signed an affidavit to have the divorce completed on the papers, which gave the judge all of the answers to the questions that would normally be asked at a hearing. And both parties wanted it. Just because the defendant wanted to wait to save money on the hearing, didn’t mean she was going to try to back out of the agreement. She fully intended to be bound by it.
Notably, people sign MSAs all the time and then wait to get divorced for any number of reasons. To render written and signed agreements (or contracts) void simply because someone died before it was filed with the court simply discourages settlement of agreements. Likewise, litigants often wait months for decisions from busy trial court judges. If the parties submit a dispute to the court and then wait because the judge needs months (or a year) to make a decision, should that result in a windfall to the surviving party? Of course not. The appeals court agreed.
While the case was pending on appeal the laws regarding equitable distribution during a divorce, when one person dies changed. The appeals court took the opportunity to determine whether the new law could be applied retroactively to the Roik case. It determined that it should. The interesting part of the case is the discussion of the new law. Specifically, the legislature recently amended N.J.S.A. 2A:34-23, to add the following underlined portions:
h. (1) Except as provided in this subsection, in all actions where a judgment of divorce, dissolution of civil union, or divorce from bed and board [or legal separation from a partner in a civil union couple] is entered the court may make such award or awards to the parties, in addition to alimony and maintenance, to effectuate an equitable distribution of the property, both real and personal, which was legally and beneficially acquired by them or either of them during the marriage or civil union. However, all such property, real, personal or otherwise, legally or beneficially acquired during the marriage or civil union by either party by way of gift, devise, or intestate succession shall not be subject to equitable distribution, except that interspousal gifts or gifts between partners in a civil union couple shall be subject to equitable distribution.
(2) If a complaint not dismissed pursuant to R.4:6-2 of the Rules of Court has been filed for an action under paragraph (1) of this section, and either party to the litigation dies prior to the entry of the final judgment, the court’s authority to effectuate an equitable distribution of the property shall not abate.
Prior to this, if a person died during the pendency of a divorce, the case would be dismissed unless the estate could establish exceptional circumstances. This rarely happened, in part, because busy trial courts prefer to dismiss cases.
But this bill specifically fills what was known as the “black hole” and says that if a complaint has been filed for divorce, dissolution of a civil union, or divorce from bed and board, and either party to the litigation dies prior to the entry of the final judgment, the court has authority to effectuate an equitable distribution of the property. Other portions of the legislative act amend and expand the laws of intestate succession and elective share to provided that a surviving party in the litigation has no right of election to take an elective share of the estate.
If you or your spouse die during a divorce, the estate can still pursue the case on behalf of the deceased person. This makes sense and is a gap in the law that should have been closed a long time ago. Once a complaint has been filed, parties are unable to change life insurance or retirement beneficiaries absent an agreement or court order. The court will rarely grant this. So why should a surviving spouse in a divorce action benefit from the death of the other party? If a person knows that the other is sick, he may intentionally delay resolution of a case.
A person that you are seeking to divorce should not be able to undermine the intent of your will by taking the spouse’s elective share. In NJ, a spouse has the statutory right to take up to one-third of the deceased estate, regardless of your will. Plus, if you have not changed the beneficiary designations on certain assets, those assets could go to the person that you wanted to divorce! The system was unfair. Fortunately, the black hole has been filled and fairness is guaranteed for the estate of the deceased spouse.