Is My Inheritance Divided in a New Jersey Divorce?

When couples in New Jersey move toward divorce, one of the first and most stressful issues they confront is that associated with property and debt division. One area in which divorcing New Jersey residents can face a considerable amount of confusion and concern is an inheritance received during the course of a marriage. Some people make an automatic assumption about matters associated with the prospect of inheritance divided in a New Jersey divorce. In this regard, some people will automatically assume that an inheritance is automatically protected from being divided in a New Jersey divorce

The reality is that dealing with an inheritance in a Garden State marriage dissolution proceeding can be more complicated in some instances. With that said, New Jersey law generally treats inherited assets as the separate property that will be set aside to the spouse who received them. However, there are certain circumstances that can cause an inheritance to become part of the marital estate and subject to division between the divorcing spouses. Understanding how and when that can happen is essential for any New Jersey resident navigating a divorce in the Garden State.

The Starting Point: New Jersey Presumes Inheritances Are Separate Property

New Jersey follows the doctrine of equitable distribution in divorce proceedings. Equitable division typically requires marital property to be divided in a just, fair, and equitable manner. As an aside, this does not mean that assets will be equally divided. This absolutely is the case when it comes to inheritance divided in a New Jersey divorce.

Pursuant to governing New Jersey law, marital property consists of assets and debts acquired during the course of marriage. There are certain classes of property specifically excluded by statute or case law, however.

An inheritance is one of those exclusions in New Jersey law. Whether or not the inheritance was received before the marriage or during it, New Jersey courts more often than not do view inherited money or property as the individual asset of the spouse who received it. New Jersey Courts usually maintain that as long an inheritance has been kept separate and not comingled with marital assets, it usually remains outside the scope of equitable distribution during a divorce case.

More Commonplace Examples of When an Inheritance can be Considered Marital Property

While an inheritance begins as separate property, it does not always stay that way, as we touched upon a moment ago. This is a primary issue in regard to inheritance divided in a New Jersey divorce. As was also noted, the most commonplace threat to the initial separate nature of inherited property is commingling. This is the mixing of inherited property in some manner with marital funds. It can also occur when inherited assets are treated as part of the shared financial life of the marriage. There are some examples of commingling that occur with greater frequency:

• Depositing inherited money into a joint bank account: By way of example, if you inherit $100,000 during the course of your marriage and place those funds into a joint checking account shared with your spouse, New Jersey courts may consider that placement as an indication that you intended for this money to be marital assets. 
• Placing inherited property in joint title: If you inherit a residence but later add your spouse to the title, you very well may have converted the property into marital property. In the grand scheme of things, joint titling is one of the clearest signs the inheritance was intended to benefit the marriage.
• Using inherited money to buy or renovate the marital home: Using inherited funds for marital purposes can transform those assets into a marital asset. These examples include:
  • Using an inheritance for a down payment on a jointly titled home
  • Paying for a major renovation on marital property
  • Using inherited funds for family expenses, vacations, debt reduction, or business ventures
  • In situations such as these, the inheritance may end up being considered a gift or other intentional contribution to the marriage

In conclusion, the issues that can be associated with inheritance divided in a New Jersey divorce underscore the need for talented, experienced legal counsel. The failure to retain the services of a dedicated, tenacious New Jersey divorce lawyer can prove to be a highly expensive oversight with long-term implications. If you are looking to file a divorce, call (201) 845-7400 for a free consultation today.