The divorce process involves complex emotional and financial considerations. When a marriage ends, one of the most important legal issues is the fair division of property and assets. For couples in New Jersey, this is determined by the principle of equitable distribution. However, spouses may wonder whether personal assets like inheritance can be divided during a divorce.
Understanding how the state’s laws distinguish between marital and separate property is crucial to protecting your financial future. Reach out to a knowledgeable Morris County, NJ division of assets attorney for more information today.
Is NJ an Equitable Distribution State?
Yes, New Jersey is an equitable distribution state when it comes to dividing assets during a divorce. Equitable distribution does not necessarily mean an equal 50/50 division of property. It means that the court will divide marital assets in a manner that is considered fair and just, taking into account a variety of factors.
Equitable distribution only applies to marital property, meaning assets, debts, and liabilities acquired by either spouse during the marriage. Other assets are generally exempt from division. The court will determine which assets qualify as marital property before proceeding with the distribution process.
Is Inheritance Divided in an NJ Divorce?
Generally, an inheritance received by one spouse is not subject to equitable distribution in a New Jersey divorce. As established, the division of assets during divorce proceedings in New Jersey applies only to marital property. Since an inheritance is typically acquired by one spouse individually, it is generally considered separate property and remains the property of the spouse who received it.
However, an inheritance is not automatically protected from division. While the inheritance itself is usually exempt, it is possible for these funds to become subject to equitable distribution under certain circumstances, which could result in a portion of the inheritance being divided between the spouses.
How Can Inheritance Become Marital Property?
The most common way an inheritance can lose its protected status and become subject to equitable distribution is through commingling. Commingling occurs when the inherited funds are mixed with marital assets to such an extent that they lose their distinct, traceable identity as separate property.
For example, if a spouse deposits inherited money into a joint bank account used for shared household expenses, or uses the funds to purchase, improve, or pay down the mortgage on a marital home titled in both names, the inheritance can be considered commingled. By treating the inheritance as a marital resource rather than keeping it separate, it demonstrates an intent to transform the separate asset into shared marital property. This can render it subject to division during the divorce.
Property division can be a complex issue, so it’s highly recommended that you seek advice from an experienced legal professional. Contact Townsend, Tomaio, Newmark & Clancy, L.L.C. for more information today.
