Maintaining the Financial Status Quo During Divorce

Status Quo

When navigating a divorce in New Jersey, both parties are obligated by law to maintain the financial status quo while the divorce is pending. It is crucial that all parties considering divorce understand the meaning of “maintaining the status quo” and the implications of this rule for both the primary wage-earning spouse and the supported spouse.


What does it mean to “Maintain the Status Quo?”

A lower-earning or non-working spouse might be concerned about meeting expenses without the primary earner’s support. Additionally, parties may fear that if their spouse predicts a divorce on the horizon, he or she may start lavishly spending marital assets or incurring significant marital debt, knowing that marital assets and debts will be divided between the parties in the divorce. To prevent such scenarios, the Court requires the parties to maintain the status quo prior to the initiation of the divorce and during the pendency of the divorce.

Simply put, “Maintaining the Status Quo” means that what was happening financially before the divorce process should continue during the divorce. For example, if the parties deposited their earnings into a joint account and paid expenses for the marital residence from that joint account prior to filing for divorce, they must continue to do so during the divorce, even if one party decides to move out of the marital residence and acquire a new residence. Additionally, insurance coverage for the parties and their children and beneficiaries on the parties’ accounts must be maintained and unaltered while the divorce is pending.

What happens if the “Status Quo” is Not Maintained?

An Award of Pendente Lite Support

A Court may provide a party with temporary relief while a divorce is pending, including but not limited to, support for a lower-earning spouse. Accordingly, if one party is not being supported during the divorce in the same capacity that he or she was previously supported, that party can bring a motion for pendente lite support (i.e., support pending the litigation of the divorce).

The amount and necessity of this support is based on the standard of living before the divorce and is typically determined using a Case Information Statement (CIS). This crucial document details a party’s financial circumstances and is broken down into three major components: (1) income; (2) monthly budget; and (3) assets and liabilities. From these components, the Court can establish if there has been a deviation from the financial status quo by one of the parties and the appropriate remedy for the aggrieved party.

Dissipation of Marital Property: Excessively and Frivolously Spending Money

In addition to maintaining the support of the other party, a party cannot excessively and/or frivolously spend money or incur substantial debt when contemplating a divorce or during the pendency of a divorce. For example, if one party transfers a significant sum of money to a family member just prior to filing for divorce or liquidates marital assets to pay off personal debt. If a party fails to maintain the status quo in such a manner, the aggrieved party can bring a claim of “dissipation of marital property” and be awarded compensation for the dissipated property in the resolution of the divorce.

Conclusion

A litigant may be tempted to implement a power play in their divorce by unilaterally ceasing to pay support and isolating the other party from access to the financial resources that were available to both parties prior to the pendency of the divorce. However, the Court will always protect the lower-earning party to ensure that there is an equal playing field in the divorce. Failing to maintain the status quo established during the marriage can result in prolonged litigation, extended court proceedings and higher attorney fees. For a smoother resolution in an amicable and expeditious fashion, there is a critical rule to follow: maintain the status quo in all respects.


Contemplating divorce? The Matrimonial and Family Law team at HDRB&B specializes in navigating complex financial cases. Contact Angela G. Kim, Department Chair – Matrimonial & Family Law, today at akim@hdrbb.com.

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