Few people would enter into handshake agreements for issues of importance, but couples regularly decide to cohabit without the benefit of any legal contract. These arrangements can work fine for years or even decades — until one party attempts to seek palimony payments after a breakup.
Each Denville family attorney at our firm advises clients that it always makes sense to put important agreements in writing. As of 2010, the NJ Statute of Frauds (Section 25:1-5) added palimony to the list of verbal agreements that would no longer be recognized under the law. Now changes to that law are under consideration that would make it retroactive.
Changes to the Law Have Been Approved by the State Senate
When New Jersey’s enacted legislation on January 18, 2010 that made palimony agreements binding only under the condition that they were in writing, the law clearly invalidated palimony claims related to non-contractual domestic partnerships formed as of the enactment date. Although it would seem logical that the law would not apply to verbal palimony agreements made prior to that time, legal cases started cropping up questioning the validity of the older agreements.
In October of 2014, NJ Senate Bill S2553 was introduced to clarify the intent of the law by implicitly stating that it also applied to agreements made prior to the January 18, 2010 effective date of the prior statute. If enacted, parties who entered into verbal contracts prior to 2010 would have one year from the enactment date to convert those contracts into legally-recognized written form. Of course, few individuals being charged in a palimony suit are likely to agree to execute such a contract once a relationship has ended.
The Senate passed that bill on June 29, 2015, passing it over to the Assembly for consideration. Since bills can only be enacted after passing the Senate and Assembly and being signed by the Governor, however, the retroactivity aspect of the original law continues to be in a state of flux. In fact, the courts have generally supported recent palimony cases pertaining prior verbal agreements, as long as plaintiffs can prove them. However, the bill has a reasonable chance of enactment sometime in 2016, with its provisions becoming immediately effective.
Partners With No Written Contract Should Consider Taking Action Now
Even if the bill fails to pass, anyone who enters into any type of formal domestic relationship should strongly consider executing written agreements that can cover anything from issues pertaining to property and financial responsibilities during the partnership to what happens in the event that the relationship ends.
The attorneys at Riordan & Associates, LLC continue to closely follow changes to NJ palimony law— as well as all legislative changes affecting families. Call us or use our convenient online contact form to draft documents that can help protect the rights of both parties, regardless of whether or not Bill S2553 becomes law.