Dividing assets in a divorce can be complicated, especially when premarital assets have grown in value during the marriage. In New Jersey, premarital assets are generally considered separate property, but any interest or appreciation accrued during the marriage may be subject to division under certain conditions.

What Are Premarital Assets?

Premarital assets include property, savings, investments, or other assets owned by one spouse before marriage. While these assets are typically considered separate property, any income, interest, or appreciation they generate during the marriage might be viewed as marital property, depending on how they were handled.

Marital vs. Separate Property in New Jersey

New Jersey follows the principle of equitable distribution, dividing marital assets fairly, though not necessarily equally. The court may consider many factors in assessing how assets should be divided.  Some of these factors may include: income of the parties, children of the marriage, alimony and other assets. While premarital assets are usually protected, any growth or income from those assets during the marriage may be considered marital property if it results from marital effort or if the assets were commingled with marital funds.

Examples of Premarital Asset Interest in Divorce

To understand how these principles apply, here are some common examples:

• Investment Accounts: If one spouse had a premarital investment account that appreciated due to market growth, it's likely that this passive increase will remain separate property. However, if that spouse actively managed the account, making decisions that contributed to its growth, the appreciation might be considered marital property.

• Real Estate: Suppose one spouse owned a property before marriage that increased in value due to improvements funded by marital income. The appreciation might be classified as a marital asset due to the use of shared funds.

• Bank Accounts: Interest earned on a premarital bank account typically remains separate property if it wasn't commingled or used for marital expenses.

Protecting Your Premarital Assets

If you have premarital assets and want to protect them, there are several steps you can take:

1. Keep Separate Accounts
   Maintaining premarital assets in separate accounts, rather than joint ones, can help prevent commingling. This separation makes it easier to prove that these assets are separate property during a divorce.

2. Document Asset Growth
   Keeping clear records of any growth or interest on premarital assets can help establish whether the appreciation was passive or active. Detailed documentation can strengthen your case if you need to prove that growth was due to market factors rather than marital effort.

3. Consider a Prenuptial Agreement
   A prenuptial agreement can outline how premarital assets, including any future appreciation or interest, will be handled in the event of a divorce. This agreement can help avoid disputes and clarify ownership from the beginning.

Navigating the division of premarital assets and accrued interest can be complex, especially when it comes to distinguishing between marital and separate property. An experienced divorce attorney can help you protect your premarital assets and advocate for a fair division that respects your financial contributions to the marriage.

Contact Us for Guidance on Asset Division in New Jersey

At Marotta Tuchman & Blazini, (MTB), we specialize in safeguarding premarital assets and achieving equitable outcomes in property division. If you need assistance with interest on premarital assets or equitable distribution, call us at (201) 368-7713 to schedule a consultation. We'll help you protect your financial future and move forward with confidence.