So You Want to Stay in Business With Your Ex-Spouse

It should seem obvious that if two people can't get along as husband and wife they can't get along as business partners.  Yet a recent case from New Jersey addressed the situation of former spouses who tried (and failed) to maintain their business relationship post-divorce.  In Mariello v. Mariello (http://www.judiciary.state.nj.us/opinions/a4044-10.pdf) the New Jersey Appellate Court held that a property settlement agreement (PSA) between the parties as part of the divorce was binding and the ex-wife, who became unhappy over how the rental properties were being managed, was not entitled to the usual remedy available to joint owners, that of partition.  Partition means the court equitably divides the property.  Here the appellate court found that the PSA had addressed the issue of partition and the parties had agreed not to partition in the event of a dispute.  The moral of the story is, be very careful about staying in business with an ex-spouse.

How Are Your Assets Titled?

When it comes to estate planning, how something is owned, i.e. how the title reads, is almost as important as what is owned.  Many people own property as joint tenants so that either of them can deal with the property.  This makes good sense from an administrative standpoint, but not necessarily from an estate planning standpoint.  Property held in joint tenancy automatically passes to the other joint tenant or tenants upon the death of one of the joint tenants.  This might or might not be what the parties had in mind.  For example, suppose Mom transfers her bank accounts into her and her sister's names so the sister can help Mom, who is getting older, deal with her bills.  Mom has a will that says that on her death the money will go to her children.  But when she dies the joint tenancy automatically transfers the accounts into the sister's name, regardless of what the will says.  If the sister wants to force the issue, the kids might be out of luck.

When planning your estate, always be aware of how your property is titled.