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

May 31, 2021 | 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.

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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