Division of Premarital Assets in New Jersey

There are many different types of assets that a couple may acquire together during a marriage that they will then have to divide during a divorce. However, assets that were acquired before a couple’s marriage are typically not subject to the asset division process and can instead be retained in the divorce by the spouse that owned them. This applies to pieces of property that an individual may have invested in before they got married. A skilled divorce attorney can further explain how premarital assets are divided in New Jersey and help ensure that your assets are protected in your divorce.

How Are Premarital Assets Protected?

Whether a premarital asset can be protected from division depends on certain factors, such as whether the spouses commingled the premarital asset with marital assets. Depending on the type of asset, such as whether it takes the form of stock options or real estate, there are certain exceptions. An asset may not be considered premarital, for example, if the other spouse’s contributions to the asset during the marriage increased its value.

If the premarital property in question was a piece of real estate, and the spouse who owned the asset did not contribute any funds earned during the marriage into that property, it will often be exempted from equitable distribution. However, if the owner had invested a significant amount of money that was earned during the marriage into that property, the other party could ask for a portion of its value because it was improved with marital funds. That percentage would have to be determined during divorce proceedings.

Another exception may be in cases of real estate purchased before the marriage that was specifically intended to be used for the benefit of both spouses in anticipation of marriage.

The best way to protect significant premarital assets is through a prenuptial agreement. An experienced lawyer in the New Jersey area can help someone create a solid prenup that outlines the specific pieces of property they are bringing to the union and allows them to retain control over those assets and exempt them from division in the event of a divorce.

Active and Passive Assets

Active assets are assets that someone actively works on improving. For example, if someone had a plot of land that was premarital, but they acted as a property manager of the premarital assets and worked towards increasing it’s value, that property would be considered an active asset.

The same idea applies to investment accounts. If someone spends significant time trading or selling a premarital stock and reinvesting it during the marriage, then it could arguably be an active asset. Conversely, a passive asset is something that exists and sustains itself without the contribution of the owner. For example, an account that was never touched but grew substantially on its own throughout the marriage can be considered a passive asset.

The difference between active and passive is basically that an active asset involves someone actually contributing to its growth, either financially or with time and effort, while a passive asset increases as a result of market forces. Legal counsel can advise whether a particular premarital asset may be considered active or passive and is subject to division under New Jersey law.

Get in Touch with a New Jersey Attorney about the Division of Premarital Assets

If you acquired assets before you entered into a marriage, you may often be able to hold onto them in the event of a divorce. A New Jersey divorce lawyer can be a valuable resource as you undergo the property division process and can address any concerns you may have regarding the security of your premarital assets. Contact our office today to schedule a consultation and get started on your case.

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