KEEPING SEPARATE PROPERTY SEPARATE AFTER MARRIAGE

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Joining two lives in marriage is an exciting time, and no one wants to think of what will happen if the couple divorces. It is important, though, to have an understanding both at the outset and throughout your marriage of separate and marital property and the importance of keeping the two unconnected. In New Jersey, upon divorce, marital property is subject to an equitable distribution by the court. This means that if you divorce, any property that is considered marital property will be divided up. Anything that is separate property, though, will remain intact and will belong to the spouse who owns it. Generally, anything that you own before the marriage is separate property, and your spouse does not have a claim to it in the divorce. Anything acquired during the marriage is marital property and will have to be divided up. There are exceptions to this, however. If you receive something by gift or inheritance, for example, this will be your separate property. There are specific techniques to apply and avoid in order to make sure your separate property remains yours alone.

Commingling is the first and most important thing to avoid. Commingling means to merge your separate property together with marital property. For example, if you inherit $10,000 from a relative and promptly deposit that money in a joint account you share with your spouse, it has probably become marital property subject to distribution in a divorce. If, however, you maintain it in a separate account held in only your name, you have not commingled it, and it will stay separate property as long as it stays in that account.

It is also important to maintain accurate and detailed records. Having paperwork to prove that a particular piece of property or account was owned by you before the marriage occurred will be powerful evidence that it is separate property. In addition, if it is a financial account, keeping detailed records can help establish that marital funds were never commingled into that account.

Often times separate property appreciates in value over time. In some situations, the increase in value will be marital property, even if the original account or property remains separate property. The common example here is a rental property. If one spouse owned the property before marriage, it is separate property. However, if the other spouse contributed to the property during the marriage by helping to improve the property and therefore increased the value, then the increase in value may be marital property.

In sum, the best way to make sure that your property stays separate is to make sure you keep it as isolated from marital property as possible and keep good records. We can help you develop a plan to keep your property separate. Contact us today at (732) 479-4711 to talk about your options.

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