Preservation of family wealth and inheritance proceeds is often a key issue in a high net worth divorce. This is particularly true when a long-term marriage ends. A divorcing spouse who is accustomed to a certain lifestyle, or who has lived in expectation of a substantial bequest, could face serious disruption, and possible financial instability. 

Under New Jersey law relating to the division of marital property, inheritances left to a husband or wife individually are generally considered as separate property. This means that the beneficiary retains full ownership of the bequest when a marriage ends unless the bequest has been commingled with shared assets. If you have received funds or other property of substantial value through a gift or inheritance, you should be careful to keep them distinct from the marital estate if you hope to keep them in a divorce. 

One example of commingling occurs when a husband or wife receives a monetary bequest and then deposits the funds in a joint bank account. Another common scenario is when a family home is left to an individual, who then retitles the property in their name, as well as their spouse’s. Even though the assets were obtained through one party, it is unlikely that they can be restored as separate property. 

Expected inheritances can loom large in a high-net-worth divorce—but they are treated differently from assets already in hand. A husband or wife might make decisions about their career, finances or retirement presuming that they will eventually be able to access funds from a significant inheritance that their spouse should receive at some point. While, a mere expectancy (what a parent or relative may leave in the future) is not property and is typically not divided by the court, it can influence bargaining positions and what a judge considers to be fair.  

New Jersey’s equitable distribution standard means that a judge can look at any factor they believe to be relevant when deciding how to allocate marital property among divorcing spouses. Along with commingling of assets, representations that one party made to the other regarding inherited funds and the potential hardship faced by the non-recipient could play a role in the court’s decision. Whether you are looking to preserve your inheritance or obtain a fair ruling on assets bequeathed to your spouse, it’s important to discuss the particular issues with a seasoned attorney. 

Hollander, Strelzik, Pasculli, Vandenberg, Hontz & Associates, LLC represents New Jersey clients in high net worth divorces and other family law matters. To make an appointment with an experienced attorney, please call 973-737-1023 or contact us online. We have locations in Newton and Succasunna.