When contemplating a divorce, it is important to understand what assets will and will not be subject to distribution by the Court.
Generally, if an asset, such as a home, is owned prior to the marriage then the owner of that home will keep it. Kenneth A. White, a partner here at Shane and White, was recently interviewed by NJMoneyhelp.com on this topic. He is quoted as stating, “assets owned by one party are immune from equitable distribution unless the assets were commingled” during the course of the marriage. What does this mean? Well in the case of a marital home, the asset is “commingled” when the owner-spouse puts the other parties name on the deed. “Marital property” is subject to equitable distribution during a divorce proceeding, and this usually applies to property acquired during the course of a marriage, however a home that was once in one spouses name but is now in both spouses name may be subject to equitable distribution. There are other factors to consider as well.
The Court will take a detailed look at the assets in a divorce action and, while owning a home for years prior to a divorce is usually a sign you will keep all, or most, of the equity in that home, the Court will consider other factors as well. As Kenneth A. White explains, these other factors include whether the home was brought in anticipation of the marriage, the outstanding mortgage balance at the time of the marriage, whether the property was refinanced during the course of the marriage, or if any significant improvements were made on the property as to positively impact its value. In his interview, Mr. White stated that “while the primary value of your home may be immune from equitable distribution, your soon-to-be ex-spouse may have a claim to share on the increase in value of the subject real property that is a result of your joint marital efforts.” If any argument can be made that the non-owning spouse contributed to the increased equity in the home then they may have a claim on a portion of that increased value. This would also apply if existing debt against the home was paid down and therefore, the net equity was increased during the marriage. There would be no claim to a right to share equity that existed in the home as of the date of the marriage or any right to an increase on the value due simply to market conditions.
It is important to protect yourself during a divorce action and here at Shane and White, LLC we are committed to your matrimonial and family law needs. Please contact our office at 732-819-9100 to set up a consultation today.
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