Equitable Distribution of Marital Property in New Jersey
Divorce creates two households, which requires the marital property—both assets and liabilities—to be divided. Ideally, the divorcing couple can come to a private agreement with assistance from their New Jersey family law attorneys. If that is not possible, however, an arbitrator or a judge will divide the property, and since New Jersey is an equitable distribution state, the property will be divided as that person deems fair rather than 50/50.
In New Jersey, “marital property” as a legal term refers to assets and debts that were legally acquired during the marriage. Most assets and debts acquired during a marriage are included for the purpose of dividing property in a divorce, but there are exceptions, such as inheritances and any gifts given to a spouse by any party other than the other spouse. Assets include both real property, such as real estate, and personal property, such as artwork and automobiles.
Prenuptials and Property Acquired Prior to Marriage
Assets and debts acquired prior to marriage are considered separate property and are therefore excluded from the distribution process. Consequently, there is no need to have a prenuptial agreement to protect assets brought with a person into a marriage. There are, however, potentially many other benefits to a prenup, including maintaining certain in-marriage acquisitions as separate. It is also possible for separate property to become marital, such as depositing previously held money into a joint account or putting a spouse on the title of a home that was owned prior to the marriage.
Equitable Distribution vs. Community Property
Most states have equitable distribution laws in place. In fact, there are only nine states remaining with universal community property laws. With equitable distribution, it is important to note the distinction between equitable and equal. The goal of such laws is to achieve fairness rather than equality, and while arbitrators and judges must operate within a statutory framework, you may not agree with their opinion of what is fair. With community property laws, on the other hand, a married couple owns all property equally, and during a divorce, all assets and debts must be divided on a 50/50 basis.
Factors Considered by the Court
In order to divide marital property, the court must consider many factors, including the length of the marriage and the shared standard of living that was established during the marriage. They will consider officialized prenuptial and postnuptial agreements. A judge or arbitrator will look at age, health, income, earning capacity, and other economic circumstances. A spouse who earned more may be entitled to more, but the court will also consider sacrifices made by one spouse for the other.
Is Marital Misconduct a Consideration?
Generally, a judge will not consider marital fault or misconduct. There are exceptions, however, such as wasting away marital assets through gambling, and while adultery alone is usually not a factor, using marital assets during an adulterous affair often is.
How Equitable Distribution Works
The first step is to determine whether property is marital or separate. Any property deemed separate is excluded and is no longer considered. It is then necessary to value the marital property using the valuation rules set forth by the equitable distribution laws. The third step is determining how much each spouse is entitled to receive. Finally, the property is divvied up, and this process can be quite complex if it involves a spouse buying the other out of certain assets, liquidation of assets, and so forth.
Divorce Representation in New Jersey
If you are considering or expecting divorce or if proceedings have already been initiated by your partner, the law firm of Morgenstern & Rochester is here to assist you. We have represented many clients as they have navigated property division through private negotiations, arbitration, and the courts. Let us evaluate your case through a consultation with a New Jersey family law attorney. You can contact us online or call us at our Cherry Hill office at (856) 489-6200.