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Buying Property During Divorce? It Might Complicate Your Case.


Emotionally, you’ve already moved on from your marriage. But if your divorce is still pending, you may want to hold off on pulling the trigger on a major purchase. At the very least, it’s a smart idea to have a discussion with your Freehold divorce attorney.

Divorcing parties have the right to purchase property at any time, just like anyone else. But whether that will complicate your divorce proceedings is a separate – and perhaps complicated - question. The main issue is: Where did the money come from?

As our longtime divorce lawyers, we can explain that marital assets are generally divided as of the date of separation. However, if marital assets were used to purchase the new property, that property also becomes subject to equitable distribution, per N.J.S.A. 2A: 24-23.1.

That doesn’t necessarily mean you can’t buy that new house or car. What it does mean is the other spouse could be entitled to an offset.

For example, a husband may want to move forward with buying that new condo, but the tradeoff is he’s also responsible for a much larger share of the couple’s shared debts. On the other hand, if he purchased that condo after separation in only his name using only his own separate money and the wife never lives there, contributes to or participates in the upkeep, it may not be considered marital property. But determining what “his own money” is may not be cut-and-dried. Just because it’s in your personal bank account doesn’t mean it belongs only to you.

The terms of a pre-marital or post-marital agreement could affect this too. The exact terms of any such agreement will be carefully analyzed by attorneys from both sides. Don’t assume the agreement covers your purchase until you have your lawyer review it.

You’ll also want to consider the possibility that you may struggle to afford the new property once the divorce is final. Divorce is often one of the most financially impactful processes a person may encounter. Sometimes, it’s unclear how it will all shake out. It may be smart to wait to see how your finances are going to be affected before committing yourself to a sizable investment.

In any case, it’s important you understand the implications of this before you sign the paperwork. That’s why most mediators and divorce lawyers will advise clients to hold off until the divorce is finalized before making any significant purchases. At the very least, they should be discussed with an attorney beforehand.

If you decide after careful consideration and consultation with your lawyer to proceed with a large purchase while your divorce is pending, you might be advised to:

  • Be certain all records – presale documents, closing documents, the bill of sale, tax records and deed – are signed only by you.
  • Make sure the funds you are using for the purchase and all related costs are made solely with separate funds that are not considered marital property.
  • Ask your soon-to-be ex to sign a legal property agreement specifying you alone will be the exclusive owner of the property, and that your former spouse will have no interest in it. Talk to your attorney about this before making the request; they may be able to help negotiate this for you. If your spouse refuses, it may be a tip-off that he or she will attempt to claim some ownership interest, which should give you further pause.

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