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What happens with gifts and inheritances during divorce?

One of the interesting and challenging parts of the Family Law practice is its interplay with other areas of the law.  Family Law often intersects with its sister practice area of wills, trusts and estate planning.

Many Family Law disputes arise from gifts and inheritances from extended family.  The starting point is that gifts and inheritances from third parties are “immune” from equitable distribution; in this context immune simply means the assets are outside of the marriage when equitable distribution is in dispute.  Case law tells us that it is the burden of the party asserting immunity, that is, claiming that an asset is a gift or inheritance and therefore outside of the marriage, to demonstrate that the asset was received as a gift or inheritance and that it was not co-mingled into the family funds.

Careful trust, gift letter and last will and testament drafting is needed to insure that a gift or inheritance to your family member or loved one remains his or her property in the case of a marital break-up and distribution of debts and assets.

Indeed, the New Jersey Supreme Court has addressed this issue in a very interesting case called Tannon v. Tannon.

Issues involving interplay of family law, gifts and inheritances are frequently part of our practice and we are frequently requested to address the distribution of immune assets.

Please don’t hesitate to contact us if you have similar questions or concerns.