Choice of Law and Creativity in Mediated Settlements

Alternative dispute resolution (also known as “ADR”) provides alternatives to formal legal proceedings. Benefits of ADR include efficiency, cost and privacy.  An additional benefit of mediation that is often overlooked is the ability to include narrowly tailored and creative provisions in Marital Settlement Agreements (entered into by agreement of the parties) that might not otherwise make it into a Final Judgment of Divorce (entered by a judge) or an Arbitration Award (entered by an arbitrator). 

For example, parties to a mediated settlement agreement may choose to include a choice of law provision. This allows the parties to agree in advance that a particular state’s laws will be used to interpret the agreement, even if they live in (or the agreement is signed in) a different state. This is helpful if one or both parties anticipate moving out of state in the future but want to ensure the laws of New Jersey apply to any disputes arising out of their agreement. 

Most critically in mediated settlements parties have more control over alimony and equitable distribution. With respect to alimony, a court is bound by N.J.S.A. 2A:34-23 and may only order rehabilitative alimony, reimbursement alimony,  limited duration alimony, or open durational alimony. However, in a mediated settlement, the parties can agree to an alimony buy-out and offset the award of equitable distribution to fund alimony the buy-out.

For questions regarding mediation and drafting marital settlement agreements or any other family law related issue, please contact the attorneys of Ulrichsen Rosen & Freed LLC. Our firm is focused exclusively on the practice of family law and serves clients throughout New Jersey including clients residing in Mercer County, Somerset County, Hunterdon County, Burlington County and Middlesex County.