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tors come into play when distributing an
This article is reprinted with permission from the AUGUST 15, 2005 issue of the New Jersey Law Journal. ©2005 ALM Properties, Inc. Further duplication without permission is prohibited. All rights reserved.
2 NEW JERSEY LAW JOURNAL, AUGUST 15, 2005 181 N.J.L.J. 608
ject to distribution.” Valentino v. effort at home and to the parties’ child client used premarital funds to pur-
Valentino, 309 N.J. Super. 334, 338 allowed the husband to devote his time chase the home, if the other party can
(App. Div. 1998) citing Scavone, 230 to this property and work to pay down demonstrate that both parties partici-
N.J. Super. at 488. The increased value the mortgage on the property, thereby pated in the decision to buy the home,
of the active immune asset is subject to subjecting a portion of its value to dis- it was intended to be the marital home
distribution to the extent that the tribution. Valentino, 309 N.J. Super. at when purchased and that he was active-
increase is attributable to the expendi- 339-340. ly involved in making improvements to
tures or effort of the nonowner spouse. Similarly, your client may come to the home, its premarital status may
Valentino, 309 N.J. Super. at 338 you and advise that during marriage her well be lost. Weiss, 226 N.J. Super. at
Accordingly, one must determine the spouse received a gift of stock in the 287-288.
extent to which the original investment family business that existed long before On the other hand, suppose your
was enhanced by contributions of either marriage. While the value of the interest client owned her own home prior to
spouse. Id. in the business when the gift was made marriage. After marriage the parties
The spouse claiming asset immuni- is not subject to distribution, any resided in that home and neither the
ty bears the initial burden of demon- enhancement in the value of the interest deed nor the mortgage were changed to
strating that the asset is not subject to resulting from husband and wife’s con- include the husband’s name and the
distribution. Sculler v. Sculler, 348 N.J. tributions to the business during the husband did not contribute at all
Super. 374, 380 (Ch. Div. 2001). This marriage is subject to distribution. towards the mortgage or upkeep. But, a
raises a rebuttable presumption that any Weiss, 226 N.J. Super. at 290; Scherzer, few years into the marriage the husband
subsequent increases in value will also 136 N.J. Super. at 401. Even if the inherited $50,000 and these funds are
be immune. The nonowner spouse must nonowner spouse does not work in the used to pay for an addition on the home.
then show that 1) the value of the asset business, a valid argument can be made The once premarital asset is now sub-
increased during the marriage; 2) the that the nonowner spouse’s work at ject to distribution and involves a
asset was one that could increase in home and caring for the children process of establishing values to be uti-
value as a result of the parties’ efforts; allowed the owner spouse to devote lized for distribution.
and 3) the increase in value can some- time to the business, thereby subjecting While many of the pitfalls associat-
how be linked to the nonowner spouse’s any increase in the owner spouse’s ed with premarital assets can be avoid-
efforts. Id at 381. interest to distribution. Id. ed with a well-written premarital agree-
Contributions do not have to be While the pattern in these cases is ment, as practitioners, the majority of
actual, physical on-site work. Our obvious, we have yet to see them our cases have no premarital agreement
courts have long recognized that a applied to a more modern case where and some commingling of premarital
homemaker’s contributions and entitle- both spouses work fulltime and their assets. New Jersey case law addresses
ment to an asset can stem from the fact children are in day care or cared for more traditional marital circumstances
that their work at home and efforts car- during work hours by a nanny. Query wherein one spouse is the primary or
ing for the family’s children enabled the how the nonowner spouse argues for an only wage earner and the other spouse
other spouse to devote time and effort to interest in a premarital business when is the homemaker, primarily responsi-
a pre-marital asset such as a business or she cannot show that her efforts at home ble for child rearing. However, today’s
property. Scherzer v. Scherzer, 136 N.J. made it possible for her spouse to professional men and women have
Super. 397, 401 (App. Div. 1975), cert. devote time and effort to the business. modified the traditional notions of mar-
denied 69 N.J. 391 (1976); Weiss v. Things can be complicated even riage, particularly the roles played by
Weiss, 226 N.J. Super. 281, 290 (App. further. For example, your client may the parties. Marriage has been altered,
Div. 1988), cert. denied 114 N.J. 287 advise you that prior to marriage she for better or for worse, to include
(1988). So while your 30-something used her savings to purchase a home unions where both parties work fulltime
client may plead to you that her spouse that was placed in her name alone. and where a third party frequently cares
never worked in the business that she After some questioning, it is deter- for the children.
alone created and runs, this may not be mined that this home was purchased in The entitlement you once found
a point of contention strong enough to contemplation of marriage and that for your client based upon her home-
exempt it from distribution. both parties decided upon the home to maker status often no longer applies.
For example, your client may be purchased. Additional questioning In addition, the more straightforward
advise you that he owned a commercial leads you to discover that your client’s distribution cases involving assets
property prior to marriage and that his husband had been actively involved in acquired during marriage are increas-
wife had nothing to do with this proper- making improvements to this home ingly becoming outnumbered by those
ty. Nonetheless, the property’s appreci- both prior to and subsequent to the cases involving substantial premarital
ation may be subject to equitable distri- marriage. These efforts can range from assets. Query whether the case law
bution. While the wife did not make hanging curtains, finishing floors and will eventually tackle the societal
improvements to the property or work cleaning to more substantive work, changes that now complicate equitable
there, her expenditures of time and such as actual construction. While your distribution. ■
3 NEW JERSEY LAW JOURNAL, AUGUST 15, 2005 181 N.J.L.J. 608
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