Telling The Difference Between Marital & Separate Property

When you divorce in New Jersey, it’s the state’s equitable distribution law that lays the basis for how a couple’s property is to be divided. Under New Jersey equitable distribution, property is classified as belonging to one of two categories, either it’s marital property, which is property considered owned by both you and your spouse; or it’s separate or non-marital property, which means it is something considered to belong to you or your spouse individually.

How can tell the difference between the two? Here are 10 quick and general guidelines for helping to determine whether the asset — or debt! — is marital or separate/non-marital property.

1. If the asset or debt was acquired after the date you were married, it is presumed to be a marital asset or debt unless you or your spouse to prove otherwise. For the next on what happens to these marital assets and debts, see our article on factors in equitable division.

2. A non-marital asset or debt is one that was acquired before the date of your marriage. The property may also qualify as a separate asset if it was acquired as a gift or inheritance (as long as it was not a gift from your spouse) after marriage.

3. Marital assets can include the increase in value of a non-marital asset during the marriage (such as value appreciation of a rental home bought by one spouse before marriage), or if marital funds are used to pay for or improve the property.

4. Any income from separate/non-marital property is also seen as non-marital property. For example, rent you receive from an investment property you bought before marriage.

5. If you exchange a non-marital asset or debt after your marriage, it is still non-marital. For example, you had a $10,000 car before you were married. After the marriage, you traded it for a different $10,000 car. The replacement car remains non-marital property.

6. Items acquired after you and your spouse separated may be considered non-marital property.

7. If you and your spouse signed an enforceable prenuptial agreement, certain assets and debts named in the contract may be considered non-marital (or marital if you so agree).

8. All rights accrued during the marriage, such as pension, retirement, profit-sharing, insurance, and similar plans, are typically considered marital assets.

9. If one spouse makes a gift of non-marital property to the other spouse, it can become marital property. For example, if one spouse gives the other spouse the car he or she drove before marriage, it can become marital property to be divided.

10. Real estate that is in both names is considered marital property unless one spouse can prove otherwise.