Inheritance Laws During Marriage in New Jersey

By Beverly Bird

Nobody likes to think about divorce when they're happily married, and most couples don't plan their day-to-day activities and decisions around the possibility. If you don't give it some thought, however, you could end up sharing your separate property if your marriage ends. Under New Jersey law, if you receive an inheritance while married, it's yours alone – unless you do something to change that.

Nobody likes to think about divorce when they're happily married, and most couples don't plan their day-to-day activities and decisions around the possibility. If you don't give it some thought, however, you could end up sharing your separate property if your marriage ends. Under New Jersey law, if you receive an inheritance while married, it's yours alone – unless you do something to change that.

Separate Property

Only marital property is subject to division in a divorce in New Jersey. This typically includes anything purchased, earned or acquired by either spouse from the date of the wedding until they take some official action to end the marriage, such as signing a property settlement agreement or filing a complaint for divorce. Inheritances aren't "acquired," however, at least initially. They're gifted, and this exempts them from consideration as marital property. Therefore, your spouse is not normally entitled to a portion of it.

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Commingling

New Jersey's law regarding inherited property only applies if you consistently maintain ownership of the asset in your sole name. If you inherit cash and deposit it into a bank account that you hold jointly with your spouse, it's no longer immune from distribution. You've commingled the asset. If you place the cash in an account held in your own name, withdraw $10,000 and give it to your spouse to start his own business, the $10,000 becomes marital property because you've gifted it to him. If you inherit a home and use marital money to maintain it, any appreciation in its value might be subject to division in a divorce. In addition, the entire home could become marital property if you title it in joint names.

Equitable Distribution

If you commingle your inheritance, you can't be sure how much of it the court will award to your spouse because New Jersey is an equitable distribution state. Unlike in community property states where the law requires judges to divide marital assets 50/50, equitable distribution depends on what the judge feels is fair after considering all facts and issues particular to your marriage. New Jersey's statutes include 15 separate factors a judge should consider, plus one rather ambiguous one: anything the court might feel is relevant. Some of the more firm factors include the length of the marriage and whether each spouse will be able to earn enough to sustain the marital standard of living post-divorce. These factors can contribute to a 55/45 division, a 60/40 division, or even a 70/30 division. If your spouse is disabled and unable to work full time, if you have other considerable separate assets and he has none, or if you were married for 20 years, it's entirely possible a judge could award him more than 50 percent of your inheritance if it becomes commingled marital property.

Burden of Proof

All is not necessarily lost if you commingle your inheritance, but New Jersey law puts the burden of proof on you to convince the court that it should not be divisible. You might meet that burden if you can account for all transactions regarding the asset from the time you received it until the time your marriage ends. For example, if you placed inherited funds into an account in your own name, then deposited your paycheck into that account, you've commingled or tainted it. However, if you can trace the source of each and every deposit, it's possible that a judge might only declare that their total value is marital property, leaving your initial inheritance intact as a separate asset.

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New York Divorce Law Concerning Inheritances

References

Related articles

Is an Inheritance Received During Marriage Subject to Division?

Spouses who receive an inheritance are entitled to do whatever they please with it while married. This includes sharing it with the other spouse or keeping it separate. If kept separate, inheritance is generally not subject to division. However, inheritance may become subject to division during a divorce under certain circumstances.

Is an Individual Bank Account Considered Joint Property in a Divorce?

Married couples often share bank accounts, with both spouses depositing and withdrawing money. When a divorce court judge looks at the money in those bank accounts, he must apply your state’s laws to decide whether the funds are joint property or one spouse’s separate property. The name on the bank account does not necessarily determine whether the account is joint or separate property.

How to Trace a Commingled Inheritance for a Divorce

The longer you’re married, the more likely you are to commingle or mix your legally separate property -- such as an inheritance -- with marital assets. The laws in every state exempt inheritances from distribution to your spouse in a divorce, but this is a sure thing only if you keep the asset consistently titled in your own name. This takes a concerted effort over time, especially with "liquid" inheritances, such as cash or investment accounts. Luckily, most states allow you try to undo your mistakes by creating a paper trail that proves the money was initially yours.

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