To protect assets, you should understand how property works in New Jersey. In the State of New Jersey, there are two types of ‘property’; Separate Property and Marital Property. Marital Property is defined as all property acquired during the course of the parties’ marriage. Both parties’ incomes earned during the marriage are marital. Retirement assets acquired during the marriage are marital. Property, real or personal, acquired during the marriage is marital. Separate Property is all property which was owned prior to the marriage by either spouse, and maintained as separate property, OR property received by one of the spouses by inheritance, devise, or bequest. Separate Property, in order to be maintained as “Separate“, cannot be commingled with marital assets.
By way of example, if either party owned a bank account prior to the parties’ marriage, and added their spouse’s name to that account; it could then be presumed that the funds in that account were intended to be given as a gift to the other party; OR, if the party who had the Separate Account did not add their spouses name to the account, however, deposited marital funds into said account; that could then alter the nature of this account and could render it marital. Marital funds in the previous example, would be any funds acquired during the course of the marriage.
If either party receives an inheritance during the course of the marriage, that inheritance is deemed their separate property. The same rules apply for inherited property, as premarital property. In the event that the party who receives the inheritance puts joint names on the inheritance, there is a presumption of an intent to gift the inheritance to their spouse. While this presumption can be rebutted, it opens the door for the property to be considered marital. If that party uses joint marital funds to support their inheritance (such as paying on taxes on an inherited property using marital funds), an argument can be made that the property has been commingled, and that the ‘Separate’ nature of the property has been changed to ‘Marital’ property.
With regard to family heirlooms and personal property, Courts are usually loathe to become involved with the division of these types of assets. As a general proposition, if either party received family heirlooms from their family during the course of the marriage, in the division of the parties’ property they should be entitled to receive that property as theirs.
One of the questions people often ask when they come into our office is:
“How can I protect my funds?” What they often mean by this is their income, or what they perceive to be their property. The answer is, the only way to protect your property going forward, is to commence an action for divorce, which draws the line in the sand as to the trigger date for the end of the marriage. Once a Complaint for Divorce has been filed with the Court, any income, retirement funds, or other assets that either party receives from the date you filed for divorce going forward is separate property; and with very few exceptions would not be subject to equitable distribution. What would one of the exceptions be? An exception to that general rule would be if a bonus is received after the commencement of the action, but representing work done during the course of the marriage.
For the majority of people it is difficult, if not impossible, to “hide” funds. Most people are paid by check, which are deposited into bank accounts and there is a record made of withdrawals and deposits, so people can be held accountable. To the extent parties are paid in cash, it can be more difficult to account for their funds, but not impossible.
Bari Zell-Weinberger is a Certified New Jersey divorce lawyer and partner with the firm of Weinberger Divorce & Family Law Group, LLC. in Parsippany, New Jersey, where she exclusively practices family and matrimonial law.