Family Matters

What’s In the Pot?

When starting the divorce process in New Jersey, a litigant will often ask “will I be able to keep “x” asset” or “is my spouse entitled to “x”.

Generally, any asset which is acquired from the date of marriage through the date the Complaint for Divorce is filed is considered a marital asset which is subject to equitable distribution.

This is true even if the asset is only titled in one spouse’s name. Any asset which is acquired prior to the date of marriage or after the date of Complaint for Divorce is filed are presumed to be the separate asset of the spouse who acquired that asset. Further, monies or assets which are inherited, regardless of whether they were acquired during the marriage are presumably considered to be exempt from equitable distribution.

Of course, there are exceptions which may make an asset that seems like it should be exempt subject to equitable distribution.

For example, say that during the marriage a relative passed and left you an inheritance of $100,000. Upon receipt of the inheritance, you deposited the funds into an account jointly titled with your spouse. During the course of the marriage, you and your spouse both had access to the funds and utilized same to pay for marital expenses. You also deposited monies you earned into this account. Your spouse then files for a divorce. You may be thinking – the $100,000 was an inheritance so this is my exempt asset. In this instance, your spouse would have a strong argument that the inheritance funds are no longer exempt and have been “commingled” and are now considered a marital asset. Commingling occurs when an exempt asset is mixed with a joint asset or treated in such a way that it becomes a joint asset.

So how do you protect yourself from having an exempt asset from becoming a joint asset?

In the above scenario, you could have protected yourself by placing the funds you inherited into an account in your individual name. During the marriage, instead of allowing both you and your spouse to have access to the funds, only you had access to same. Rather than depositing any earnings into the account, you only allowed the funds to grow through market forces/investment. These actions create a stronger basis to say that after receipt of the inheritance, you continued to maintain same as your separate asset.

This is just one example. If you or someone you know has a question on whether their spouse would be entitled to a certain asset, our attorneys are prepared and ready to help you navigate this issue.

The information contained in this publication should not be construed as legal advice, is not a substitute for legal counsel, and should not be relied on as such. For legal advice or answers to specific questions, please contact one of our attorneys.