How Are Inheritances Treated During a NJ Divorce?

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If you are facing a divorce in New Jersey, there are likely concerns about asset division, particularly inherited property. It is a common misconception that inheritances are automatically shielded from equitable distribution, as they are commonly assigned as separate property. However, the treatment of an inheritance is complex, hinging on various legal and factual details, and errors in handling these matters can be financially detrimental. To ensure your financial security, it is essential to consult with an experienced Ocean County Property Division Attorney.

Is New Jersey an Equitable Distribution State?

Like many states, New Jersey operates under an equitable distribution system. This means that assets are divided fairly, but not necessarily 50/50. Courts examine the couple’s unique circumstances when dividing property, including the duration of the union, each spouse’s contributions, the standard of living established during the marriage, and each spouse’s unique financial circumstances.

To determine how an inheritance will be distributed, a key distinction must be made:

Marital Property: Assets acquired during the marriage are subject to division.
Separate Property: Assets acquired before the marriage are excluded from equitable distribution.

An inheritance’s classification depends on how it was managed throughout the marriage. Generally, inheritances that are received by one party, irrespective of whether it was acquired before or after the union, are classified as separate property and exempt from equitable distribution. However, an inheritance can be classified as marital property if it is commingled, utilized for joint marital expenses, or retitled in both spouses’ names. If the asset appreciated in value over time due to the active efforts of both parties, the increase in value could be subject to division.

How Do I Protect an Inheritance During a Divorce?

To safeguard an inheritance during a New Jersey divorce, it is vital to keep it separate from marital funds (don’t commingle). You can achieve this by using dedicated accounts and avoiding joint expenses. It is advisable to document everything thoroughly and consider crafting a prenuptial/postnuptial agreement or trust for security. Prompt action is crucial after receiving an inheritance to avoid unintended consequences. Keep in mind that if you were the one who inherited property, you will carry the burden of proving it is your separate property to the court.

It should also be noted that the court could consider inherited assets when determining the ability to provide spousal maintenance or child support.

If you are seeking a divorce in New Jersey and have questions about how an inheritance will be handled, consult with a knowledgeable attorney at the Law Offices of Sarina Gianna, LLC. Our legal team will advocate for your rights, shield your assets, and guide you through each stage of this complex process. Connect with our firm today to schedule a consultation.