By: Justin M. Smigelsky, Esq.
In deciding how to appropriately distribute marital property upon divorce in New Jersey, the Court must determine what property is subject to equitable distribution, determine the value of the property, and then ultimately decide how allocation of the property can equitably be made between the spouses. Pursuant to New Jersey statute, all gifts, inheritances, and intestate distributions received by either spouse from a third party are ineligible for equitable distribution; however, gifts between spouses are not entitled to such immunity. Specifically, N.J.S.A. 2A:34-23(h) states:
Except as provided in this subsection…the court may make such award or awards to effectuate an equitable distribution of the property…[h]owever, all such property, real, personal or otherwise, legally or beneficially acquired during the marriage or civil union by either party by way of gift, devise, or intestate succession shall not be subject to equitable distribution, except that interspousal gifts or gifts between partners in a civil union couple shall be subject to equitable distribution. [emphasis added]
In addition to the exclusions specifically stated in the statute, property brought into the marriage by either spouse may also be excluded from equitable distribution. Pursuant to New Jersey case law, if such property later increases in value, the increment may enjoy like immunity. Furthermore, any income derived from the immune asset, any asset acquired in exchange for an immune asset, or the traceable proceeds from the sale of the immune asset may similarly be excluded (depending upon the circumstances) from equitable distribution upon divorce.
It is important to note that the burden of establishing immunity from equitable distribution will rest upon the spouse who asserts such immunity. Moreover, if the separate property is acquired in contemplation of marriage, is commingled, there is an intention of making a gift to the other spouse, one spouse represents that the property will be shared, or the asset increases in value as the result of marital efforts, the asset may lose the benefit of immunity.
If you have any questions in regards to divorce in New Jersey, equitable distribution, or family law, you may wish to consult with an experienced family law attorney. This article is for information purposes only, and is neither legal advice nor the creation of an attorney client relationship.
Justin M. Smigelsky, Esq. / Timothy J. Little, P.C. / 2016 – All Rights Reserved
Timothy J. Little, P.C. is a full-service law firm with offices in Woodbridge and Chesterfield, New Jersey. Timothy J. Little, P.C. offers specialized legal assistance to individuals, families and businesses throughout New Jersey including Middlesex County (Old Bridge, Woodbridge, Sayreville, East Brunswick, Spotswood, Perth Amboy, Dunellen, Colonia, Sewaren, Iselin, Avenel, Fords, Keasbey, Menlo Park, Port Reading, South Amboy, Monroe, Edison, Carteret, Cranbury, Helmetta, South River, Milltown, Highland Park, Jamesburg, Laurence Harbor), Monmouth County, Union County, Ocean County, Somerset County, and Burlington County. If you have any questions or concerns regarding family law or divorce, please contact the attorneys at Timothy J. Little, P.C.
Family Law Practice Specialties:
Divorce, equitable distribution of assets and liabilities, alimony, domestic violence, child custody, child support, parenting time, emancipation applications, removal applications, Marital Settlement Agreements, post-judgment enforcement and modification applications