Getting married in New Jersey doesn't automatically merge your assets with your spouse's. New Jersey is an equitable distribution state, meaning that in a divorce, marital assets are divided fairly, but not necessarily equally. This distinction is crucial when understanding what happens to property owned before marriage.
What is Considered Separate Property in NJ?
Property owned before the marriage remains separate property in New Jersey. This includes:
- Real estate: Houses, land, or other properties acquired before the wedding date.
- Personal property: Cars, furniture, jewelry, artwork, and other possessions owned prior to marriage.
- Bank accounts: Funds in accounts held before the marriage.
- Investments: Stocks, bonds, or other investments acquired before the marriage.
- Inheritances and gifts: Anything received as a gift or inheritance during the marriage, specifically designated as such by the giver.
Crucially: The key factor determining separate property is the time of acquisition – before the marriage. The source of the funds used to purchase the asset is less important than the date of acquisition. For example, even if you use post-marital income to pay the mortgage on a house you owned before marriage, the house generally remains your separate property.
What Happens to Separate Property During Divorce?
While separate property generally remains separate in a divorce, there are exceptions. The court considers whether the separate property has been:
- Substantially improved: If significant improvements were made to separate property using marital funds (jointly owned money earned during the marriage), the appreciation in value resulting from those improvements may be considered marital property and subject to equitable distribution. For example, a significant renovation to a pre-marital home using marital funds may result in a portion of the home's increased value being divided in a divorce.
- Commingled: If separate funds were mixed with marital funds in a way that makes it impossible to trace the source of the funds, the court may deem the commingled assets to be marital property. For instance, consistently depositing separate funds into a joint bank account may make it difficult to prove which funds are separate and which are marital.
- Transmuted: If separate property is intentionally treated as marital property, it may lose its separate status. This often occurs when a spouse explicitly and unequivocally states their intent to gift their separate property to the marital estate. Proof of this intent is required and is rarely easy to demonstrate.
How is Separate Property Protected in NJ?
To protect your separate property in New Jersey, consider these steps:
- Maintain separate accounts: Keep your pre-marital funds separate from any joint accounts.
- Keep meticulous records: Maintain clear documentation of all assets acquired before the marriage. This includes purchase agreements, bank statements, and any other relevant documents.
- Pre-nuptial agreement: A prenuptial agreement clearly defines what constitutes separate and marital property, minimizing potential disputes during a divorce.
What are the common misconceptions about separate property in NJ?
H2: Does using marital funds to maintain separate property make it marital property?
Not necessarily. Paying for maintenance, such as property taxes or insurance, on separate property with marital funds generally doesn’t transform the property into marital property. It's the substantial improvements that can lead to a redistribution of the increased value. A simple repair differs greatly from a complete home renovation.
H2: Does putting separate property into a joint account make it marital property?
Yes, this significantly increases the risk. Commingling assets can make it extremely difficult to trace their origins, potentially leading the court to classify the funds as marital property.
H2: Can a spouse claim a share of separate property just because they contributed to the household?
No. Contribution to the household through work or otherwise does not automatically entitle a spouse to a share of separate property. Equitable distribution is based on the division of marital assets, not contributions made to a household that contains separate assets.
In conclusion, understanding the nuances of separate property in New Jersey is crucial for protecting your assets. Consulting with a qualified New Jersey family law attorney is highly recommended, especially before marriage or during a divorce, to ensure your rights and assets are protected. This information is for educational purposes only and does not constitute legal advice.
