Equitable Distribution of Property in New Jersey: Who Gets What and Why?
In New Jersey, a divorce involves the equitable distribution of property, which means dividing marital assets and debts fairly, not necessarily 50/50. Understanding how this works is key if you’re getting a divorce in the state.
Table of Contents
Who Gets What?
Marital property in New Jersey is divided by the principle of equitable distribution. That means marital assets and debts are divided in a way deemed fair by the court, pursuant to statutory factors, which doesn’t always mean 50/50. The court looks at many factors to determine each person’s share, trying to get a distribution that fits the unique circumstances of the marriage.
Why?
The principle of equitable distribution recognizes that both spouses contribute to the marriage in different ways, both financial and non-financial. By looking at multiple factors the court tries to provide a fair allocation of assets and debts that consider both people’s contributions and future needs.
Get Help With Your Family Law or Divorce Matter
Our experienced attorneys are here to provide you with the legal guidance and support you need. Contact us today!
What Is Fair?
“Fair” in equitable distribution depends on the facts of each case. The court looks at factors such as length of marriage, standard of living, each person’s income and earning potential, and contributions to the marriage, including non-financial contributions like child-rearing and homemaking. Both parties are entitled to a portion of the marital estate that reflects their contributions and accounts for their future needs.
Are All Assets on the Table?
Not all assets are subject to equitable distribution. New Jersey makes a distinction between marital property – assets and debts acquired during the marriage – and separate property – such as assets obtained before the marriage, inheritances, and gifts to one spouse. But if separate property has been commingled with marital assets it can be considered part of the marital estate.
When Does the Court Decide?
Ideally, spouses agree on the division of assets and debts through negotiation or mediation. If that’s not possible the issue is presented to the court and a judge will make the final decision based on New Jersey’s statutory equitable distribution factors.
Get Help With Your Family Law or Divorce Matter
Our experienced attorneys are here to provide you with the legal guidance and support you need. Contact us today!
What Does the Court Look At?
New Jersey courts look at many factors when dividing assets:
- Length of Marriage: Longer marriages may favor an equal distribution.
- Age and Health of the Parties: The physical, emotional, and mental condition of each spouse can impact the division based on their needs and abilities.
- Income and Property Brought to the Marriage: Assets owned before the marriage may stay separate and affect the distribution.
- Standard of Living Established During the Marriage: The court is directed to maintain the same (or comparable) lifestyle for both parties post-divorce.
- Economic Circumstances of Each Party: The court considers the financial circumstances of the parties, both during the marriage and after.
- Contributions to the Education or Earning Power of the Other Spouse: Financial and non-financial support given to enhance the other’s career and earning capacity can impact distribution.
- Income and Earning Capacity: The court reviewes each spouse’s ability to support themselves post-divorce.
- Contributions as a Homemaker: The court considers all non-financial contributions by each party, such as child-rearing and managing the household.
- Tax Consequences: In dividing assets, the Court will review the potential tax implications, as some assets may be taxable and some assets may be nontaxable.
- Present Value of the Property: The current worth of assets affects their distribution.
- Need for a Parent to Occupy the Marital Home: Especially relevant when minor children are involved.
- Debts and Liabilities of the Parties: Marital debts are divided with assets.
- Any Other Factors Deemed Relevant: The court has discretion to consider other factors.
How Do I Protect My Marital Assets in Divorce?
Protecting your interests in a divorce involves several proactive steps:
- Full Financial Disclosure: Ensure all assets and debts are disclosed to prevent surprises and build trust during negotiations. This also mitigates the risk of the settlement being reopened in the future due to one party claiming a lack of important information in entering into the agreement.
- Prenuptial or Postnuptial Agreements: These agreements can outline asset division terms, providing clarity and protection.
- Avoid Commingling Assets: Keep personal assets separate to prevent them from being considered marital property.
- Maintain Detailed Records: Document all financial transactions and asset valuations to support your claims during distribution discussions.
- Consider Mediation: Mediation can help you agree amicably, giving you more control over the outcome and potentially more of your assets.
- Consult a Family Law Attorney: Legal guidance is key to navigating equitable distribution and advocating for your interests.
Frequently Asked Questions:
- Does marital fault matter in asset distribution?
Generally, no, New Jersey courts do not usually consider marital misconduct (e.g. infidelity) when dividing assets. The court focuses primarily on economic factors and each party’s contributions to the marriage.
- What happens to retirement accounts?
Retirement accounts accumulated during the marriage are marital property and subject to equitable distribution.
- Can we agree on asset division without going to court?
Yes, couples can agree on a settlement through negotiation or mediation and the court can then approve it and make it binding.
- How are debts divided?
Marital debts are divided fairly (pursuant to the statutory factors), based primarily on who incurred the debt and for what purpose.
- What if my spouse is hiding assets?
If you suspect asset concealment, forensic accountants can investigate, and courts can penalize the concealing for non-disclosure.
Knowing the intricacies of equitable distribution in New Jersey is key to protecting your interests and getting a fair result in your divorce. Be informed and seek the right legal advice.
Get Help With Your Family Law or Divorce Matter
Our experienced attorneys are here to provide you with the legal guidance and support you need. Contact us today!