Understanding the “Equitable Distribution” of Property in Your New Jersey Divorce
As part of the divorce process, you and your spouse will need to divide your marital assets. Even setting aside disagreements over items with sentimental value, there are a number of issues that will likely make this one of the most challenging aspects of your divorce. At Schultz & Associates, LLC, we represent spouses in Bergen County and throughout New Jersey in protecting their interests during the “equitable distribution” of their marital property.
In New Jersey, the process of dividing a couple’s assets in divorce is known as the “equitable distribution” of marital property. Importantly, equitable does not necessarily mean equal, and there are a number of reasons why one spouse could have a legitimate claim to more than half of the couple’s marital assets during their divorce.
In order to ensure that you receive not only your fair share of marital property, but the specific assets you desire to keep following your divorce, it is critical to have experienced legal representation on your side. Even if your divorce does not end up in court (as is usually the case), you will still need an experienced advocate who can negotiate on your behalf and effectively assert your right to an “equitable” share of your marital estate. The equitable distribution process inherently involves some give-and-take, but with the right legal representation, you can feel confident knowing that you have protected your property rights as much as possible.
“Marital Property” or “Separate Property”?
When dividing assets in a New Jersey divorce, one of the first steps is understanding which assets are subject to distribution. Any assets that qualify as “separate property” will remain with their current owner, while the couple’s shared assets, or “marital property,” will need to be divided consistent with the principles of equitable distribution.
So, what qualifies as “separate property”? As a general rule, any assets that one spouse owned prior to the marriage will remain separate, and assets acquired by one spouse through gift or inheritance will be treated as separate property as well. However, there are numerous exceptions that can convert previously-separate assets into marital property – presenting one of the earliest challenges in the equitable division process.
Depending upon whether they qualify as marital or separate property, assets that may be subject to distribution in your divorce include:
- Bank accounts
- Retirement accounts
- Stocks and other non-retirement investments
- Privately-held business interests
- Personal property assets, including vehicles, jewelry, furniture, and collections
- Real estate assets, including your family home, rental properties, and commercial real estate
Who Decides What is “Equitable”?
Most divorces settle out of court, and it is up to the spouses and their attorneys to negotiate a settlement that reflects an equitable distribution of the marital estate. But, if divorcing spouses reach an impasse, they will need to go to court, where a judge will distribute their marital assets based upon an assessment of factors such as:
- The duration of the marriage
- The spouses’ respective ages and health conditions
- The spouses’ marital standard of living
- The spouses’ respective economic circumstances following a proposed distribution
- The spouses’ respective incomes and earning capacities
- The spouses’ debts and liabilities
- The tax consequences of particular distributions
Keep in mind, this list is not exhaustive. In order to protect your rights, you will need to work closely with an experienced divorce attorney who can assess all of the relevant factors and use the law to secure a fair outcome in your divorce.
Spotlight: Assets that Increased in Value During the Marriage
For many couples – and high net worth couples in particular – a key question will be how to deal with assets that have appreciated in value during their marriage. Take for example, stocks that one spouse owned prior to the marriage: If the stocks increased in value during the marriage, is the appreciated value considered separate or marital property?
The answer to this question (and others like it) is not as straightforward as it may seem. The law calls for different treatment under different circumstances, and a number of factors can influence whether one spouse is entitled to a share of the appreciation of the other spouse’s separate property.
Schedule an Initial Divorce Consultation at Schultz & Associates, LLC
If you would like to speak with an attorney about your divorce, contact the Bergen County, NJ law offices of Schultz & Associates, LLC. To speak with one of our experienced divorce lawyers in confidence, call 201-880-9770 or request an appointment online today. We respond to all inquiries in 24 hours or less.