One of the most commonly asked questions of our Morris County family law attorneys when representing clients during divorce is which, if any, assets will be protected from New Jersey equitable distribution laws during the divorce.
While there is no “one size fits all” answer to this question as equitable distribution laws depend upon many factors which are specific to each situation, we can help to clarify some of these dependent factors, and provide you with a better idea of which of your assets may be subject to equitable distribution laws, and which assets may be protected from asset division during divorce.
Marital Agreements and Marital Asset Division
Florham Park, NJ Prenuptial Agreement Attorneys
The first, and perhaps most important factor, which can affect marital asset division during divorce is that of a prenuptial agreement or any other kind of marital agreement. If you and your spouse have a signed prenuptial agreement in place, and it is considered legal and binding by the courts (the requirements for which you can view on our prenuptial agreement page), then any assets such as homes, business holdings, and investments mentioned in your prenuptial agreement will be divided in the manner outlined in said agreement.
Beyond prenuptial agreements, it is also possible that you and your spouse have signed a postnuptial agreement as well. While these agreements tend to be much more difficult to enforce than premarital agreements, that doesn’t mean that they ultimately will not be. Much of this depends upon how and when the postnuptial agreement was signed, the terms it describes, and the advocacy of your attorney. The terms of your postnuptial agreement may also be considered evidence of the parties’ intentions as to the distribution of assets, or in relation to issues of support.
Duration of the Marriage
Hanover, NJ Divorce Attorneys
The second factor that will need to be taken into consideration when determining how marital assets are divided during divorce is the duration of the marriage in question. For longer duration marriages, chances are both you and your spouse will have made “marital contributions” which entitle each of you to the equitable distribution of all marital assets and debts. Marital contributions can be anything from actual money spent on the purchase, upkeep, or maintenance of assets and properties, to personal sacrifices or efforts made which contribute to the acquisition or continued ownership of these same assets and properties.
On the other hand, for shorter duration marriages, there may be circumstances when you choose to “each keep your own” assets, even though those very assets may have been acquired during the marriage and are still considered marital property. In deciding whether to keep your own assets or distribute all marital assets, it is imperative that you have an attorney who can help you assess the financial advantages and downsides to each scenario.
It is important to remember that certain assets which were the sole property of one individual prior to the marriage often remain their sole property, exempt from equitable distribution. Your Hanover divorce lawyer can help you determine if your pre-marital assets are exempt or if they may be at risk for being considered part of the “marital pot.”
Commingling and Equitable Distribution
Madison, NJ Marital Asset Division Attorneys
Beyond the factor of marital duration, certain specific assets may also be exempt from equitable distribution laws. These assets include things like inheritances, third-party gifts, and properties or retirement funds held prior to the marriage. However, these assets are only exempt if they are not “commingled.” Commingling refers to when assets are put into the name of the couple, or a joint account, rather than in the name or account of one individual.
A common example of this is engagement rings. As an engagement ring is a gift from one party to the other, they are usually exempt from equitable distribution. However, if at some point the gifting spouse makes a contribution to the ring, for example replacing or enhancing the stone, that new stone would not be exempt, while the old one would still be.
When it comes to retirement accounts like 401(k)s or IRAs, it is often the case that the pre-marriage value of these accounts is exempt from marital asset division, while any contributions made during the marriage would be equitably distributed between the parties. However, it can often be difficult to determine the exact pre-marriage value these accounts had and may require financial investigation and consultation with forensic analysts in order to accurately determine the pre-marriage value of these accounts or holdings.
As there is a great deal of varying case law and precedents when it comes to determining when assets are exempt, and how premarital assets which were later commingled are divided, it is critical that you retain experienced legal counsel during the asset division process in order to gain the best possible understanding of your options, what case law may or may not apply in your situation, and how to go about securing the division of assets which most accurately reflects your unique needs, concerns, and individual rights.
Contact Our Morris County Equitable Distribution Attorneys Today
At Jacobs Berger, our attorneys have extensive experience helping clients across Madison, Randolph, Florham Park, Hanover, Morristown, Morris County, and throughout New Jersey to accurately value marital assets, assess the implications of prenuptial and post-nuptial agreements, and fairly divide marital assets based on our investigations and findings.
The unique approach of our firm focuses on finding constructive solutions to family law issues which protect the relationships and financial stability that you have already worked so hard to achieve, while simultaneously taking into account your individual needs, concerns and situation. While we prefer to resolve disputes first through negotiation and mediation in order to avoid the stress, expense, and often tumultuous process of courtroom litigation, when these methods fail to achieve resolutions which meet your needs, we are also prepared to aggressively represent your rights and needs to a judge in family law court, and help you ensure that any settlement you reach is fair to you, and properly reflects the needs of you and your children.
To speak with our firm today in a strategic planning session regarding your divorce or your options when it comes to marital asset division, please contact us online, or through our Morristown, NJ office at (973) 710-4366.