When you and your spouse file for divorce, one of the most contentious aspects of this process for many couples is the division of assets. While you may know that your marital home and bank accounts are subject to division, you may be surprised to learn that gifts obtained during the marriage may be subject to distribution. As such, if you’re unsure what will happen to this property, the following blog explores what you should know about this matter. The divorce process can be complex, so work with an experienced Mountainside property distribution attorney for more information and representation.
How Does New Jersey Classify Property in a Divorce?
When a couple gets divorced in New Jersey, it’s important to understand how property will be divided. Generally, the first step is to determine what is marital (joint) property and what is separate property.
Marital property is typically anything that is obtained after a couple is legally married. It is considered to be the property of both spouses, regardless of whose name is on the account or who “technically owns it.” In a New Jersey divorce, only marital property is subject to division between spouses.
Separate property refers to assets owned prior to the marriage or after separation. This will remain the sole property of the spouse who owns it during a divorce.
Exceptions
In some instances, separate property can become marital property if it is commingled with marital assets. For example, if your spouse owned a vacation property before your marriage, but uses funds from a joint account to make renovations, subsequently increasing the value of the property, it can be considered marital property.
Similarly, some assets obtained during a marriage, like an inheritance that goes to a sole spouse, may be considered separate property, despite the fact that it was acquired during the marriage.
Is New Jersey an Equitable Distribution State?
New Jersey is an equitable distribution state. This means that during a divorce, all marital property will be distributed between spouses in a way that is fair and equitable to both parties, rather than an automatic, 50/50 split.
Factors Courts Consider When Dividing Property
Under NJ Rev Stat § 2A:34-23.1, the factors considered by the court during this process include:
- The length of the marriage
- Each spouse’s income and earning capacity
- Each spouse’s age and health
- The standard of living during the marriage
- Each spouse’s financial situation
- Economic and non-economic contributions to the marriage
- Any other factors the court deems relevant
Are Gifts Considered Marital Property in New Jersey?
While New Jersey’s equitable distribution system states that assets accumulated during the marriage are considered marital property, a notable exception is found in gifts and inheritance.
Any gift given to both you and your spouse will be considered marital property. This includes wedding gifts, anniversary presents, housewarming gifts, etc. If the giver of the gift intended the item to be used or enjoyed by both you and your spouse, the gift is jointly owned.
However, gifts that were given to one spouse specifically are generally considered separate property and not subject to equitable distribution. If you receive a gift from someone outside of your relationship and it is intended for you and you alone to take ownership of, you can keep the item in your divorce. However, you must be able to prove that it was given to you only and that the gift did not commingle with shared funds or property.
Examples of Gifts Considered Marital Property
Gifts that the courts often consider marital property include:
- Wedding gifts addressed to both spouses
- Anniversary gifts
- Housewarming gifts
- Gifts intended for joint use
Examples of Gifts Considered Separate Property
Gifts often deemed separate property by the court often include:
- Inheritances (when kept separate)
- Gifts specifically addressed to one spouse
- Gifts intended solely for one spouse
What Happens to Gifts From One Spouse to Another?
A common issue of contention involves gifts given from one spouse to the other during the marriage. These are known as interspousal gifts and will be subject to asset distribution during a divorce. Even if the gift was purchased using separate funds, interspousal gifts are considered marital property and will be divided between the spouses during property distribution. Examples of common interspousal gifts include:
- Jewelry
- Clothing
- Electronics
- Artwork
- Vehicles
How Can I Keep a Gift?
Even if you believe that your marriage will never end, if you want to ensure that you maintain all rights to a gift in case you get divorced, you must take proper steps to keep the asset separate.
Keep Records
First, keep detailed records of who gave you the gift, how, and when. Maintaining official documentation, like keeping cards, emails, or receipts, can help prove that the gift was intended for you. Additionally, you should follow all legal requirements, like paying property or inheritance taxes with separate funds.
Avoid Commingling
It is also important to avoid mixing the gift with marital funds:
- Do NOT deposit gifted funds or inheritances into joint accounts
- Do NOT title gifted property in both spouses’ names
- Do NOT use marital funds to maintain gifted property
Doing so can transform a separately owned gift into marital property subject to division during your divorce.
Contact an Experienced Mountainside Divorce Attorney Today
When you are going through a divorce in Union County and find that gifts are a hotly contested issue, working with an experienced attorney with Ross & Calandrillo can help you protect your best interests. Our team can help you gather the necessary information to fight for the best possible outcome for your unique circumstances. For more information on how to keep gifts separate, reach out to a skilled lawyer today.
