The Role of Inheritance in Your New Jersey Divorce
Unfortunately, losing people that we love is an inevitable fact of life. At times, they bequeath us property, valuables, or money to show their love as they pass on. If you are undergoing divorce or the dissolution of a civil union, questions surrounding your inheritance often become relevant to the division of assets process. In order to ensure that you retain the assets that are rightfully yours, it is essential to thoroughly understand New Jersey law regarding inheritance during divorce. It is also highly advisable to consult with an experienced New Jersey divorce attorney who can protect your inheritance and advocate for your interests.
In most New Jersey divorces, inheritance is not subject to equitable distribution during the division of assets process. N.J.S.A. 2A:34-23 states the following with regard to inheritance:
“All such property, real, personal or otherwise, legally or beneficially acquired during the marriage or civil union by either party by way of gift, devise, or intestate succession shall not be subject to equitable distribution.”
In order to understand the above policy, it is essential to define two important terms. “Devise” refers to a gift of real or personal property by the last will and testament of the donor. In addition, “intestate succession” refers to the distribution of real or personal property per the laws of a specific state when a person dies without a last will and testament. Essentially, this means that regardless of the process by which you receive an inheritance, it is legally yours under the law and should not be divided among you and your spouse during divorce.
During the division of assets process, “equitable distribution” refers to the standard of fairness, not equality, that is used to allocate assets. All property must first be classified as “marital” or “separate” in order to determine if it will be subject to equitable distribution. Inheritance is generally considered “separate property,” whether it is inherited by one spouse prior to the marriage or during the marriage. However, in some cases, inheritance becomes intermingled with marital assets, which can give rise to serious issues during divorce.
In order to protect inheritance that you received before entering into a marriage, it is highly advisable to prepare and execute a prenuptial agreement that specifically identifies these assets as yours. If you receive an inheritance during your marriage, it is critical to keep these funds separate from your marital funds. For example, if you deposit your inheritance into a marital account, it will be difficult for the court to accurately assess the percentage of the inheritance that remains in the account and thus, the funds will be distributed among the spouses. Similarly, if you utilize inheritance funds to purchase marital assets, such as a family home, the home will be subject to equitable distribution and you will not retain your inheritance as you leave your marriage.
If you are currently involved in the New Jersey divorce process and concerned about the future of your inheritance, contact the divorce and family law attorneys at Townsend, Tomaio & Newmark for additional information. If you intend to be married and are interested in a prenuptial agreement, we can also assist you with devising and executing a prenuptial agreement that will safeguard your future. Simply contact our Morristown, New Jersey offices at 973-840-8970 for a free initial consultation.