Distinguishing Between Marital and Non-Marital Property
As part of every divorce action, it is necessary to divide the parties’ marital property between them.
In New Jersey, this process is called equitable distribution.
Before determining how to properly divide the parties’ assets, it is first necessary to determine which assets are actually divisible.
To do this, property is divided into two different categories: marital property, which is divisible as part of a divorce, and non-marital property, which is not divisible as part of a divorce.
Understanding Marital Property
In general, marital property is property that is acquired by either spouse during the marriage. This can include homes, cars, jewelry, bank accounts, collections, retirement benefits, pension plans and even pets. Marital property can be divided between both spouses during a divorce. It does not matter whether one spouse makes all of the money during the marriage, or if the spouses keep their assets separate and in their own names, as long as the property was acquired during the parties’ marriage.
Nevertheless, there are a few types of property that are not marital, and therefore not divisible, even if they are acquired during the marriage. They include: inheritance, gifts and monies received by either party for pain, suffering and disabilities resulting from personal injuries. Such property is generally not divisible as part of a divorce, unless such property is intermingled with other marital property and used for marital expenses.
What is Non-Marital Property?
Non-marital property generally includes any property that either party possessed prior to getting married. Nevertheless, such property can (and often does) become marital, if the property is intermingled with marital property and used for marital expenses. In some cases, an asset can even be comprised of both marital and non-marital property, meaning that only a portion of the asset is divisible as part of a divorce. This generally occurs when a party brings an asset into the marriage, which is then added to, improved on or increases in value as a result of active contribution during the marriage and with marital assets.
How is Marital Property Divided?
Once all of the parties’ property has been categorized as either marital or non-marital, it is still necessary to determine how to divide such property. As explained above, this process is called equitable distribution in New Jersey. Importantly, equitable distribution does not necessarily mean equal distribution. New Jersey is not a common property state, where all marital property is divided 50/50.
Instead, a set of non-exhaustive factors must be weighed to determine the most equitable distribution of the parties’ marital assets. Such factors include:
The duration of the marriage
The age and physical and emotional health of the parties
The income or property brought to the marriage by each party
The standard of living established during the marriage
The economic circumstances of each party at the time the division of property becomes effective
The income and earning capacity of each party, including educational background, training, employment skills, work experience, length of absence from the job market, custodial responsibilities for children, and the time and expense necessary to acquire sufficient education or training to enable the party to become self-supporting at a standard of living reasonably comparable to that enjoyed during the marriage
Can Non-Marital Property Ever Become Marital Property?
The simple answer is yes. Non-marital property can become marital property if such property is intermingled with marital property or otherwise used for marital purposes.
For example, if one spouse enters the marriage with a pre-marital checking account, which is then used by the parties as their joint checking account into which their paychecks are deposited and from which all of their marital expenses are paid, it will likely become impossible for the parties to distinguish between the marital and non-marital portion. As a result, the account will likely be considered marital.
In such circumstances, the burden falls on the spouse claiming the property to be non-marital to prove that a portion is non-marital. This burden can be very difficult to meet, especially when dealing with a long marriage, where the intermingling has occurred for money years, or where the records may no longer even exist.
The Law Office of Steven M. Cytryn, LLC, can help you understand whether property is marital or non-marital, and can assess the impact this issue may have on your divorce. Scheduling a consultation with us will provide you with the opportunity to discuss these issues and to better understand what you may realistically expect based on the facts of your case. Call us at (201) 803-8874 now for a consultation.