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What Assets Qualify as “Separate Property” in a New Jersey Divorce?

January 5, 2023 | Posted In Family Law

In New Jersey, divorcing spouses must divide their “marital property” according to the principles of equitable distribution. But, each spouse is entitled to keep his or her own “separate property” without regard to the distribution of the couple’s marital estate. As a result, identifying each spouse’s separate property is a critical step in the divorce process, and it is a step that each spouse should take with the advice and representation of his or her own attorney.

4 Types of Assets That Qualify as Separate Property

Before we discuss the types of assets (i.e., property) that can qualify as separate property, it is important to emphasize that there are various circumstances in which an asset that seems to qualify as separate property can fall into a couple’s marital estate. It is also possible, and not uncommon, for different portions of a single asset to qualify as separate and marital property. Thus, while the following types of assets generally qualify as separate property for purposes of a New Jersey divorce, each divorce requires a careful assessment of the unique facts and circumstances involved.

1. Assets Obtained Before the Marriage

Assets that either spouse gets prior to the marriage will qualify as separate property in most cases. However, if spouses mix their separate and marital assets, assets owned before the marriage can lose their “separate” status. Additionally, if a separate asset grows in value during the marriage, or if the spouses use marital assets to improve a separate asset (i.e., a home), then a portion of the asset may be subject to equitable distribution.

2. Assets Obtained After Filing for Divorce

In New Jersey, assets that either spouse acquires after the date that one spouse files for divorce also generally qualify as separate property. This applies to newly-obtained assets (i.e., income from employment or investments), not assets bought with marital funds. Thus, a spouse cannot file for divorce, use the couple’s funds to buy an asset and then claim that the asset is not subject to equitable division.

3. Assets Obtained By Gift or Inheritance

Assets that either spouse acquires by gift or inheritance during their marriage will qualify as separate property in most cases. This generally excludes gifts from one spouse to the other.  

4. Assets Included in a Prenuptial or Postnuptial Agreement

While the default rule is that assets obtained during the marriage qualify as marital assets subject to equitable distribution, spouses can override this default rule by entering into a prenuptial (before marriage) or postnuptial (after marriage) agreement. Likewise, spouses can agree that separate assets will be subject to distribution in their divorce.

Identifying Each Spouse’s Separate Property in New Jersey

Now that you know what types of assets qualify as separate property, you can start preparing for your divorce by identifying your (and your spouse’s) separate assets. Your list doesn’t need to be set in stone—your lawyer can review your list and assist you with confirming whether particular assets qualify as marital or separate property—but preparing a list of potentially separate assets will help you start framing your thoughts around the distribution of property in your divorce.

With this in mind, here are five tips for identifying separate property in New Jersey:

1. Review Your Prenuptial or Postnuptial Agreement

If you have a prenuptial or postnuptial agreement, reading what your agreement says about separate property will be a good place to start. Even if you think you clearly remember the terms of your agreement as they relate to property ownership in the event of a divorce, you should still go back and re-read your agreement to make sure. Since the terms of a legally enforceable prenuptial or postnuptial agreement override New Jersey’s default equitable distribution rules, knowing what your agreement says about separate property (if anything) will be important for the remainder of the process.

2. Make a List of Assets that You Think Might Qualify as Your (or Your Spouse’s) Separate Property

Next, it is a good idea to make a list of assets that you think might qualify as your (or your spouse’s) separate property. The goal here is simply to give yourself a starting point. Confirming whether certain assets qualify as separate or marital will require research in some cases, but there is no point in researching assets that you have no doubt fall into the marital category.

3. Review Your Recent Account Statements

If you or your spouse has already filed for divorce, you can review your recent account statements to identify any assets that have been acquired since the date of the divorce filing. Remember, these won’t necessarily qualify as separate assets—assets purchased using marital funds will still be marital property—but this will help with identifying assets that you should discuss with your lawyer.

4. Review Your Legal Documents

For real estate, vehicles, and assets acquired through inheritance, you can go back through your files to find the legal documents that confirm the date (or means) of acquisition. You should make copies of these documents as you find them to share with your lawyer as well.

5. Collect Photos and Other Evidence

If you have been married for a long time, you might not have access to account statements or other documents that prove how and when you (or your spouse) acquired assets that qualify as separate property. In this scenario, you can use old photos and any other evidence you can think of to help prove what belongs to whom. For example, if you have photos that predate your marriage and that show you with a particular piece of property, your lawyer may be able to use these photos to help establish your ownership of this separate asset in your divorce. 

Schedule an Initial Divorce Consultation at Helmer, Conley & Kasselman, P.A.

If you are considering a divorce (or if your spouse has filed for divorce) and you would like to know more about New Jersey’s equitable distribution law, we encourage you to contact us for a confidential initial consultation. To speak with a New Jersey divorce lawyer at Helmer, Conley & Kasselman, P.A. in confidence, call 877-435-6371 or request an appointment online today.

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