17 Oct Can I protect my house if we file for divorce?

Q. I bought my house months before getting married to protect myself just in case the marriage didn’t work out. In the last 10 years my spouse and I have been on and off, separated for three years but never legally separated. What options do I have to protect myself and my home? I paid for the house with money I had saved prior to the marriage and I paid the mortgage the entire time that I’ve owned a house. He contributed to the utilities and his name is not on the mortgage or the deed.
— Contemplating divorce

A. New Jersey is an equitable distribution state.

That means marital property is divided equitably or fairly upon divorce. It does not necessarily mean equally.

“Marital property” is defined as assets and debts acquired or earned during the course of the marriage, either individually or jointly, including real property, personal property, retirement accounts and bank accounts, as well as mortgages, loans, revolving debt, and the like, said Jeralyn Lawrence, a family law attorney with Lawrence Law in Watchung.

She said in New Jersey, property titled in the name of one spouse rather than both spouses is not enough to exclude that property from the proverbial “marital pot.”

There is also what’s known as “separate property.”

“‘Separate property’ is defined as assets and debts acquired prior to your marriage, as well as after the filing of a Complaint for Divorce, and would also include property you might obtain during the marriage such as an inheritance or gifts you receive from someone other than your spouse,” Lawrence said. “There are actions one spouse could take to convert his or her separate property into marital property, which is a relevant concept to your inquiry.”

Focusing primarily on the marital residence as your point of concern, you said that you purchased the residence in your sole name months prior to your marriage to protect yourself in the event your marriage did not survive, you used pre-marital money for the down payment and marital income to maintain the mortgage, which was also in your sole name.

You also said your husband has always contributed to the utilities during the marriage.

Therefore, your interest lies in protecting, and recovering, as much of this asset as possible in the event of divorce.

Lawrence said the issue of a pre-marital down payment arises frequently in family law.

While the equity you acquired in the home for the months between its purchase and your wedding may be excluded from equitable distribution, that position rests on additional factors, she said.

For example, did your current husband live in the residence during that period as well, contributing to expenses? Also, was the residence purchased in contemplation of your marriage to your current husband?

“If the answers to these questions are ‘yes,’ a court could determine that the residence is a joint marital asset subject to equitable distribution regardless of whose name appears on the deed and/or mortgage,” she said. “If the answers are unequivocally ‘no,’ you might be successful in preserving the pre-marital portion of your investment.”

As it relates to your husband’s ability to claim up to one-half of the equity acquired during the marriage even though he may not have contributed to the mortgage, it is relevant that he contributed to the utilities in the home, Lawrence said. Other relevant factors would include whether improvements were made to the home using marital income, whether your husband invested manual labor into the upkeep of the home, and/or what other marital efforts, if any, caused an increase in the value of the home.

“If your husband did contribute to these efforts, personally or financially, he may have grounds to claim a portion of any increase in value as a result of those efforts,” Lawrence said.

It sounds like you should speak to an experienced attorney to fully understand how to protect yourself.

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This story was originally published on Oct. 17, 2019.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.