One of the issues that must be resolved in New Jersey divorce proceedings is the division of assets between the spouses. A key question that must be answered before the court or the couple may distribute assets is which property is marital property, rather than separate property. The answer to this question is critical in determining “who gets what” following a divorce, and it can even affect alimony and child support awards. If you have questions concerning marital property, contact Bergen County divorce attorney Brian D. Iton. He proudly represents people in Hackensack, Paterson, Newark, Jersey City, and other communities throughout Bergen, Essex, Hudson, and Passaic Counties. The guidance of a property division lawyer may be critical in exploring your options.
Today, many individuals enter into a marriage after they have already acquired personal assets, sometimes even significant assets like houses or investment funds. In addition, nearly every married couple—particularly if they have been married for a long time—acquires even further assets during the marriage. Similarly, they may also acquire debts, both before and after the marriage: student loans, car loans, credit card debt, and more. How and when property is acquired may determine its character as either separate or marital.
As a general rule, separate property is any property owned by one spouse prior to the marriage, or any property acquired by one spouse during the marriage through gift or inheritance. Any appreciation in value or income from separate property is also separate. Similarly, separate debt is any debt owed by one spouse prior to the marriage. Conversely, marital property is generally any property acquired by the couple during the marriage using marital funds.
This may sound straightforward, but it rarely is. Once a couple decides to divorce, they may discover an extensive list of assets and debts that are difficult to characterize. This is because there are complicating factors. For example, if one spouse manages or invests in the other’s separate property—such as if a husband manages his wife’s former home as a rental property or provides funds for remodeling it—and it earns money or increases in value, the asset may no longer be regarded as separate, or only a portion of it may remain separate, and the other portion may become marital. Conversely, if a spouse owns a house as separate property but borrows against it to put a down payment on a house that is marital property, the debt may be marital property, while the house itself remains separate property. In other words, how the couple manages their property during the marriage can affect its characterization.
While a marriage is intact and happy, couples may not pay much attention to the character of their property. When a divorce becomes likely, this changes. In a divorce, separate property remains separate, and only marital property will be divided between the couple. As a result, even though a court will divide the assets equitably, the characterization of assets or debts as separate or marital will likely have a significant financial impact on both spouses following the divorce. If you need assistance, advice, or legal representation on any matter dealing with marital property, contact Bergen County divorce lawyer Brian D. Iton toll-free at (844) 431-3380, or you can use our online form to set up a free consultation.