If you’re filing for divorce in New Jersey, you may be wondering how all your property will be sorted out - especially if there’s an asset you’d really like to keep.
Courts do allow couples to make their own arrangements for these things, whether through a prenuptial agreement, mediation, or just reaching an amicable accord between the two of you. However, as our Red Bank divorce lawyers can explain, disagreements will be sorted by the court, in accordance with equitable distribution statutes.
In principle, equitable distribution aims for the fair distribution of marital assets and debts between the parties. “Marital property” is generally understood to be any asset or liability acquired during the marriage. N.J.S.A. 2A:34-23.1(p) establishes a rebuttable presumption that both parties made substantial contributions (financial or otherwise) to the acquisition of both income and property while they were married. That means you both have just as much right to claim that property unless you can provide evidence that contributions weren’t equal.
However: Equitable distribution is not the same as equal distribution. An even split of marital property might be the ideal, but life isn’t always straightforward that way. It’s not unusual for the court to award disproportionate property or debt division that favors an economically-disadvantaged spouse.
Some factors that can skew equitable distribution in NJ divorce:
- Income disparities. When one spouse’s income-earning abilities are significantly lower than the other’s, courts will generally seek to even the playing field, so-to-speak.This is frequently cited in cases involving stay-at-home parents or homemakers, caregivers of children with disabilities, or spouses who are disabled or have major health problems.
- Misconduct. If one spouse squandered a sizable portion of shared/marital assets on expenses that were not for the benefit of the family, the court will take that into consideration. We might see this in a case where one spouse had a gambling problem or ran up credit card debt while wining-and-dining an affair hook-up. It might also be a factor if it’s discovered that one spouse was trying to hide assets to avoid them being
- Disproportionate contributions. If one party contributes a large portion of non-marital assets to obtain certain marital assets. For example, if one person uses personal savings obtained prior to the marriage to make a down payment on the marital home. Even in this case, the court will factor in the length of the marriage, each party’s income/earning potential, etc.
Examples of Marital Assets in NJ Divorce
Basically, absent a prenuptial or postnuptial agreement, most assets in a NJ divorce are going to be considered “marital property,” and therefore subject to equitable distribution.
That doesn’t necessarily mean you’ll be expected to give up your autographed collectibles or treasured artwork. But if those items were acquired during the marriage or with marital property/income, the value of those things can be considered in the equitable distribution process. That means there is usually a trade-off: You keep your signed baseball cards, but forego the fancy leather couches.
In general, you can expect the following to be subject to equitable distribution in a NJ divorce:
- Real estate. If it was acquired during the marriage, or served as the primary marital residence, it is likely to be considered marital property. This is true even if only one partyname’s is on the deed. Sometimes, depending on how long you have been married, real estate acquired prior to marriage might still be considered marital property.
- Bank accounts, stocks, and bonds. There may be limited exceptions for investment accounts held in a trust for other people (particularly any children you share) or stocks bonds acquired prior to marriage (particularly if the marriage was a short one). But otherwise, bank accounts can be subject to equitable distribution.
- Retirement accounts and pensions. Even if these accounts haven’t vested or matured at the time of divorce, their present value can be factored into equitable distribution. That means the other spouse could get a larger share of other divisible assets as a “buy-out” to offset the account’s value.
- Honor prizes, royalties, copyright, and patent interests. Win a Nobel Prize or write a popular book? If you did it during the marriage, compensation for these interests can be divisible in NJ divorce equitable distribution.
- Business interests. Sometimes it depends on when the business was started, how it was structured, etc. In general though, because businesses are often income sources for the spouse who holds interest, the other spouse is likely entitled to a cut. If there is a business contract between business partners that prevents spouses from taking any share or control of the company in the event of a divorce, the current value of the company can still be weighed in equitable distribution.
- Personal property. Jewelry, artwork, cars, furniture, clothes, burial plots, credit card points – even pets – all of it can be subject to equitable distribution, particularly if acquired during the marriage. Sometimes even if it was acquired before the marriage, it can be subject to equitable distribution if the parties’ property became co-mingled.
Gifts and inheritances may not be subject to equitable distribution IF they were received prior to the marriage AND they were not commingled with marital assets. Engagement rings are often not considered marital property because they are gifts received prior to marriage. However, if you inherited a home before marriage that you later both lived in, that is likely to be considered commingled property, and thus subject to distribution.
If you are approaching the possibility of divorce and have concerns about how to protect certain types of property, it’s best to speak to an experienced divorce attorney as soon as possible.
Call our New Jersey divorce attorneys at (732) 810-0034 or use our online form to request your free & confidential consultation!