New Jersey is an equitable property state, meaning distribution of property and assets during a divorce may not necessarily be evenly divided (50/50), rather in a division that is fair to both parties, not equal.
Legally, it is presumed that property and assets acquired during the marriage are marital property and will be divided accordingly. Non-marital property is generally considered to belong to one spouse and not divided. Further differences of marital and non-marital property include:
Marital property or assets subject to equitable distribution:
- It does not matter whether one party obtained or solely paid for property and assets during the marriage. As long as these items were acquired during the marriage, they are considered shared marital property.
- Property and assets acquired through income of both spouses is considered marital for equitable purposes, as long as they were acquired after the marriage.
- Gifts from one spouse to the other are considered marital property and assets.
Non-marital property or assets not subject to equitable distribution:
- Property and assets acquired by either spouse prior to the marriage are generally considered non-marital and not subject to equitable distribution
- Property gifted by a third party to one spouse only either before the marriage or during
- Inheritance received by either spouse prior or during the marriage
- Property or assets purchased or received by one spouse during the marriage, but clearly the direct results of the income or efforts of the same spouse prior to the marriage
How Are Assets Distributed in New Jersey?
The courts follow a three-step process to determine distribution of assets in New Jersey, as follows:
- Identifying marital assets: The court determines what assets are subject to distribution, such as residences, businesses, bank accounts, vehicles, retirement, stock options, pensions, bonuses, and lottery winnings, however:
- Property and assets acquired prior to marriage are generally not considered to be equitable property and the courts require these assets to be held separately and not co-mingled in order for them not to be identified as marital property. However, in certain circumstances, these assets may qualify as marital property, such as improvements made during the marriage to property one spouse acquired prior to the marriage.
- The court will also determine whether the property’s incremental value occurred due to fluctuations in the financial market or the efforts of one spouse to determine whether the incremental value is subject to equitable distribution.
- Determining value: Once marital and non-marital assets have been identified, the court will use various methods to determine the value of each item in order to divide it equitably
- Determining distribution: Courts in New Jersey are granted wide discretion under the state’s Equitable Distribution Statute in determining the percentage of distribution for each spouse, which is based on:
- Length of the marriage
- Age, physical, and mental health of both spouses
- Income or property each spouse brought to the marriage
- Present value of property and assets
- Living standards during the marriage
- Overall economic standing of each spouse
- Legal written agreements, such as a pre-nuptial agreement, between spouses regarding property division prior to or during the marriage
- Future financial condition of each spouse once division of assets is complete
- Earning capacity and income of each spouse through review of employment skills, level of education, training, work experience, and time and cost of acquiring training or education for one spouse to support themselves following the divorce in the same standards of living during the marriage
- Contributions either spouse contributed toward the other’s education, training, and earning capabilities
- Any contributions by one or both spouses to acquire, preserve, improve, or waste marital property, including homemaker contributions
- Tax liabilities of each spouse after asset distribution
- Need of any children’s custodial parent to occupy or own the marital home and effects
- Debts and liabilities of each spouse
- Present or future for educational or medical trusts for children or either spouse
Marlton Divorce Lawyers at Burnham Douglass Represent Clients During Divorce Proceedings
If you have decided to divorce, representation by a skilled Marlton divorce attorney at Burnham Douglass will ensure you are treated fairly and leave the marriage with the property and assets you are entitled to. Contact us today at 856-751-5505 or visit our website for a free consultation. Located in Marlton and Northfield, New Jersey, and we serve clients throughout South Jersey, including Camden County, Burlington County, Atlantic County, Gloucester County, and Mercer County.