Dividing property during a divorce can become particularly complicated when investments are involved. If you own stocks, receive dividend payments or have a brokerage account, you may wonder whether your spouse is entitled to a share.
In New Jersey, the answer depends on whether the investments are considered marital or separate property under the state’s equitable distribution laws.
When are stocks considered marital property?
New Jersey follows the principle of equitable distribution, meaning marital property is divided fairly, though not always equally. In general, stocks purchased during the marriage with marital income are considered marital assets, no matter whose name is on the account.
Stocks acquired before the marriage, through an inheritance or as a gift to one spouse are usually separate property. However, if those investments are commingled with marital funds or both spouses contribute to their growth, some or all of their value may become subject to equitable distribution.
What about dividends?
Dividends are treated according to the ownership of the underlying stock. If the stock is marital property, dividends earned during the marriage are usually included in the marital estate.
Even dividends from separate property may become subject to division if they were regularly deposited into a joint account, reinvested using marital funds or otherwise commingled with marital assets. Every situation is fact-specific, making financial records especially important.
Full financial disclosure matters
New Jersey courts require both spouses to provide complete and accurate financial disclosures during divorce. This includes investment accounts and all other financial assets. Failing to disclose investments can result in legal consequences such as court sanctions and an unequal property award.
If you have questions about how stocks or dividends may be treated in your New Jersey divorce, speaking with a legal professional can help you understand your rights, protect your financial interests and work toward a fair property division.