Divorce is undoubtedly a challenging and emotionally charged time for all parties involved. Amidst the chaos, one thorny issue that often arises is the division of assets. Specifically, the critical matter at hand is the allocation of property that was either inherited or gifted during the marriage. In New Hampshire, the legal framework precisely determines the distribution of such property in the event of a divorce.
New Hampshire’s Equitable Distribution Principle
Before delving into the specifics of the division of inherited or gifted property in a New Hampshire divorce, it is crucial to grasp the fundamental concept that governs the state’s approach. New Hampshire operates under the principle of equitable distribution. In essence, this means that during a divorce, the court is responsible for apportioning marital property in a manner that is fair and just, though not necessarily equal.
It is important to note that martial property encompasses both assets and debts acquired during the marriage, irrespective of the property’s ownership status or the account holder’s identity. Conversely, separate property refers to assets acquired prior to the marriage, after a legal separation, or through inheritance or gift during the marriage.
Division of Inherited or Gifted Property
In New Hampshire, inherited or gifted property is generally classified as separate property. However, there are exceptions to this general rule that must be taken into account.
Transmutation
The legal concept of transmutation comes into play when separate property assumes the characteristics of marital property. This situation can arise if the spouse who received the separate property treats it as if it were shared marital property. For instance, if a spouse inherits property and uses marital funds for property improvements or maintenance, it may be deemed a transmutation to marital property.
Commingling
Commingling occurs when separate property is blended with marital property to an extent that differentiation becomes challenging. For example, if a spouse deposits an inheritance into a joint bank account, the inheritance may be considered commingled with marital assets. In such cases, it becomes the responsibility of the spouse who received the inheritance to provide evidence that it is still considered separate property.
Active Appreciation
If a spouse inherits or is gifted property and actively contributes to its growth or increased value during the marriage, the appreciation in value may be regarded as marital property. For instance, if a spouse inherits a rental property and actively manages and enhances its value during the marriage, any increase in rental income or property value may be deemed marital property.
The Significance of Prenuptial Agreements
To avoid any confusion or disputes regarding the division of inherited or gifted property in a divorce, couples may opt for a prenuptial agreement. Such an agreement allows couples to outline how property will be distributed in the event of a divorce, explicitly addressing inherited or gifted property.
In Conclusion
Divorce is never an easy journey, but having an understanding of how inherited or gifted property is divided in a New Hampshire divorce can significantly alleviate stress and uncertainty. If you find yourself going through a divorce and need guidance on property division matters, it is crucial to seek the advice and expertise of a qualified divorce attorney.