NEW JERSEY DIVISION OF ASSETS
In a New Jersey divorce case, the division and distribution of assets and liabilities between the parties is known as Equitable Distribution. Equitable generally means “fair” and does not always mean equal. Only marital assets and liabilities are subject to division, i.e., those that are acquired from the date of the marriage (except a gift or inheritance) up until the time of the filing of the complaint or some other agreed upon equitable distribution cut-off. “Clearly any property owned by a husband or wife at the time of marriage will remain the separate property of such spouse and in the event of divorce will not qualify as an asset eligible for distribution,” so long as it is not comingled with marital assets. Painter v. Painter, 65 N.J.196, 214 (N.J. 1974).
Equitable Distribution NJ
New Jersey is an equitable distribution state which means that, in the event of a divorce, marital property is not automatically split 50-50. Rather, equitable distribution is defined as the division of marital assets in a manner that is fair but not necessarily equal.
NJ’s Three Step Equitable Distribution Process
New Jersey courts have developed a three (3) step process to distribute assets; identification, valuation and distribution.
First, the Court must identify what assets are subject to equitable distribution. Typically, courts will deem marital property to be property acquired by the parties during the marriage (from the date of marriage through the filing of the complaint for divorce). This can include, but is not limited to, the marital residence, a business, vacation home, stock, stock options, airline miles, pensions, automobiles and retirement accounts.
Once all assets have been identified, the Court will value the marital property for purposes of distribution. In the context of the distribution of a marital business, this may require the retention of a forensic account to value the business. On the other hand, in the context of retirement accounts, valuation may be as simple and straightforward as looking at a most recent statement.
In step three, the court is tasked with equitably distributing the marital assets. In accordance with the Equitable Distribution Statute, a Court must consider the following factors when effectuating an equitable distribution of marital assets:
- Duration of the marriage;
- Age and physical and emotional health of the parties;
- Income or property brought to the marriage by each party;
- Standard of living during the marriage;
- Written agreements made by the parties before or during the marriage concerning distribution;
- Economic circumstances of each party at the time the division of property becomes effective;
- Income and earning capacity of each party;
- The contribution by each party to the education, training or earning power of the other;
- The contribution of each party to the acquisition, dissipation, preservation, depreciation or appreciation in the amount or value of the marital property as well as the contribution of a party as a homemaker;
- Tax consequences of the proposed distribution;
- The present value of the property;
- The need of a parent who has physical custody of a child to own or occupy the marital residence and to use or own the household effects;
- The debts and liabilities of the parties;
- The need for creation, now or in the future, of a trust fund to secure reasonably foreseeable medical or educational costs for a spouse or children;
- The extent to which a party deferred achieving their career goals; and more
Wilentz New Jersey Family Lawyers can assist you in an accounting of many of the different types of property including your:
- Vacation home
- Pension plan
- Cars, trucks, boats, planes, motorcycles
- Business interests
The time period for determining what property is acquired during the marriage, and ultimately subject to equitable distribution, is generally the period from the date of marriage to the filing of the divorce complaint. It must be stressed that in accordance with New Jersey law, how the properly is titled or held does not determine distribution. Most often, the marital residence may be purchased in one spouse’s name only, but it still would be considered marital property and subject to equitable distribution.
For any additional questions on division of assets, please contact us today or call our family law firm lawyers at 1.(732) 726-6236.