Divorce is incredibly common in our country. According to statistics, Americans divorce at a rate of 2.9 per 1,000 people. If you are considering divorce, you likely have a number of concerns: Will you get custody of or visitation with your kids? Will you have to pay alimony? What will your child support payments be like? How much of my assets will I have to split? Will I lose my house?
These questions are incredibly common. While the answers will depend on the facts of your case, there some laws that you should know about upfront. For example, when it comes to the property that you have inherited, New Jersey law provides that this is excluded from the division of assets — with some notable exceptions. A Bergen County divorce lawyer can advise you about how your inherited property may — or may not — be included in your divorce case.
How Is Property Divided in New Jersey Divorce Cases?
Under New Jersey law, in a divorce, the property is divided using a concept known as equitable distribution. This does not mean that all property is split equally. Instead, it is split equitably — or fairly.
In some cases, equitable distribution may mean that assets are divided 50/50. In other cases, equitable distribution may result in you getting more or less than 50%. The ultimate decision will be based on the specific facts of your case in conjunction with the New Jersey Statute that governs equitable distribution.
There is a three-step process for dividing up assets in New Jersey. First, a court will determine which assets are subject to distribution, which involves determining which property is marital and which is separate. Marital property may include anything acquired during the course of the marriage, such as the marital home, vehicles, stock options, bonuses, bank accounts, and even lottery winnings.
However, there are always exceptions. Contrary to marital property, property that was acquired before your marriage is labeled Separate Property. Separate property is generally not subject to equitable distribution in a divorce. This may include property acquired before the marriage, gifts from third parties to one spouse, and inheritance to just one spouse.
There are a number of rules about what constitutes separate property and how it must be maintained. For example, if one spouse owned a vacation home prior to marriage, and both spouses improved it during the course of the marriage, it may not stay separate, but turn into the marital property with a portion of it subject to be divided (or the value of that property).
Second, the parties have to assign values to the marital property so that it can be divided equitably. In some cases, this process is relatively straightforward, like looking at bank statements to determine the total value. In other cases, financial experts may need to value a business or analyze stock options in order for the court to make a decision. Sometimes an appraiser needs to be hired to value a piece of tangible property like a house or jewelry.
Under New Jersey’s Equitable Distribution Statute, courts consider these factors to decide how marital property is to be divided:
- Age and physical and emotional health of each spouse;
- Income or property brought to the marriage by each spouse;
- Standard of living established during the marriage;
- Any written agreement made before or during the marriage concerning an arrangement of property distribution (prenuptial or postnuptial agreement)
- Economic circumstances of each spouse at the time of the division of property;
- Income and earning capacity of each party;
- Contribution by each party to the education, training or earning power of the other;
- Contribution of each spouse to the marital property, as well as the contribution of a spouse as a homemaker;
- Tax consequences of the proposed distribution;
- The present value of the property;
- Need of a parent who has physical custody of a child to own or occupy the marital residence and to use or own the household effects;
- Debts and liabilities of each spouse;
- Any need for creation, now or in the future, of a trust fund for medical or educational costs for a spouse or children; and
- The extent to which a spouse deferred achieving their career goals thereby allowing the other party’s earning capacity to be enhanced.
- Any other factors which may be relevant.
- Duration of the marriage;
The last point is critical, as it is a “catch-all” provision that enables the court to act in equity and fairness. For example, if you have a child with significant special needs, a court may consider that when dividing property. Is Inherited Property Subject to Equitable Distribution?
Under New Jersey law, property that was acquired during marriage through a gift, inheritance or intestate succession is generally not subject to equitable distribution. Intestate succession is the way that property is passed down if someone dies without a will. For example, if one of your parents died without a will, then their property would be divided among their heirs in accordance with New Jersey law (i.e., to a spouse, children, etc.).
No matter how you received an inheritance — through being included in a will or through intestate succession — it will be at first glance to be considered separate property. As separate property, it will not be subject to equitable distribution in a divorce.
As we said above, there are exceptions to this general rule. If the inheritance is in the name of both you and your spouse, then it may be considered marital property. In addition, if you do certain things with the inheritance, like using the money to buy a home for your family, or depositing the money into a joint account, then you may have converted it into marital property, even if you did it unintentionally.
If you have received an inheritance — either before your marriage or during it — then it is a good idea to consult with a Bergen County divorce lawyer to understand the intricacies of this area of the law so that you can protect the inheritance. Considering Divorce? Give Us a Call.
Divorce can be a costly, highly emotional process. When you are facing the possibility of giving away the property that you have spent a lifetime accumulating, it can be particularly difficult. Taking action and obtaining knowledge to protect your assets — including any inheritances that you have received is a prudent thing to do.
A Bergen County Divorce Lawyer Can Help
At MR. Men’s’ Rights Divorce & Family Law of New Jersey by Schultz & Associates, we understand how challenging this process can be for our clients. We will aggressively advocate for your interests in a divorce case, especially when it comes to characterizing property and the division of assets. To learn more or to schedule a confidential initial consultation, call our firm at 201-654-4263 or email us at any time.