There are so many myths floating around about divorce, especially finances in divorce, that people often make mistakes while trying to protect themselves. Having the right information about your rights and obligations in a New Jersey divorce can help you make better decisions and avoid legal mistakes that could complicate your divorce or result in a less favorable outcome, particularly when it comes to the division of your possessions.
For example, some people mistakenly presume that if their name is the only name on an account, their spouse has no claim to the funds in the account. Whether the account in question is a checking account, an investment account or a retirement fund, the truth is that whether or not the courts want to split the accounts will depend more on what legal protections you have and when you funded the account.
Do You Have an Agreement With Your Spouse to Keep Finances Separate?
It is more common than ever for married couples to choose to remain financially independent for a variety of reasons. While you may have trouble proving that you entered into a verbal agreement with your ex to keep your accounts and income separate during the marriage, if you have a prenuptial or postnuptial agreement, that will be very clear evidence to the courts that you intended to maintain financial independence throughout your marriage.
Any accounts specifically addressed or earmarked as separate property in a prenuptial or postnuptial agreement will typically remain exempt from division in modern New Jersey divorce proceedings.
Additionally, if the account is something you inherited from a family member and have maintained separately throughout your marriage without giving your spouse access or control, you can typically protect those assets from division in the divorce.
The Name on the Account Isn’t as Important as the Funds You Use
New Jersey applies the equitable division standard to splitting up your assets in a divorce. What you accrue and earn during the marriage is usually subject to division, while your separate property retains protection from getting split up.
If you use money earned during your marriage to fund an account, whether it’s your personal investment account or a retirement fund, the courts will typically want to split that between you and your spouse. Deposits made prior to marriage will typically remain separate property that you can retain. Attempting to hide an account in order to not split it could open you up to legal and financial penalties if the courts, your ex or their attorney find hidden accounts during the divorce.