As a general rule, most property owned by a divorcing couple in New Jersey is subject to equitable distribution. Equitable distribution is a legal phrase that basically means “dividing marital property.” There are, however, certain assets that are normally excluded from equitable distribution in New Jersey. This post will highlight some of the assets not subject to equitable distribution in New Jersey. Please note that for all of the following, there is no hard-line rule. Commingling funds, for example, may take away a property’s separate nature.
Equitable distribution traditionally refers to property acquired during a marriage. If you enter into a marriage with a house, for example, that house will likely not be subject to equitable distribution at the time of the divorce. Again, this is a fact sensitive determination and you will have to speak with an attorney or other expert to determine whether your property is in fact excluded from equitable distribution. If property is commingled then it might become marital property. Same thing if someone puts their spouse’s name on the deed. Rental or other income may be considered for purposes of alimony and child support. Also, a spouse who contributes to the house or other property (and this could be financial or “sweat equity”) might also have a successful claim to a portion of a property. (These caveats will likely apply for all exceptions, and I will therefore not repeat them below, but it should be noted that they do likely apply).
Gifts from third parties are often not subject to equitable distribution. Gifts to each other during the marriage, however, (think: jewelry) will likely be considered marital assets and thus subject to equitable distribution. If someone gives a gift to both spouses, then it is likely subject to equitable distribution. A common fact pattern involves inlaws giving a gift and now claiming it was only for their son or daughter but not the son-in-law or daughter-in-law. The burden of proof generally falls on the party seeking the exception.
As with gifts, most inherited property is not subject to equitable distribution.
Personal Injury Monies
The portion of a personal injury (or other such lawsuit) award regarding physical or emotional pain is generally not subject to equitable distribution, although the rest of the award, if applicable, generally will be considered marital property.
Even when one party is the breadwinner and the other party a “stay at home” spouse, unless there is an exception such as outlined above, most property will be subject to equitable distribution. Again, the above exceptions are very fact sensitive. The above information is general in nature, and should not be relied upon for your specific case. To see if your property falls into an exception to equitable distribution, you should speak with an attorney who is licensed in your area and practices in this area of law.
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