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:
7 Tips on How to Prepare for an Initial Consultation with a Divorce Lawyer
If you are contemplating a divorce, one of your first steps should be to set up an initial consultation with a lawyer to discuss your personal circumstances and explore the options you may have available. In order to get the most out of your consultation, you will want to come prepared. Here are seven steps you can take to get ready for your initial divorce consultation:
1. Learn about Your Options for Getting Divorced
When most people picture a divorce, they picture a messy, complicated, and expensive process that involves both spouses airing their grievances in court. But, the reality is that relatively few divorces follow this path. Far more often, divorcing spouses are able to work together, using a variety of different methods to reach an amicable solution that serves each of their respective interests as well as those of their children.
When preparing for your initial divorce consultation, you should take the time to learn about negotiation, mediation, and collaborative divorce. By gaining a better understanding of these options, you will be better able to discuss the best strategy for your divorce.
2. Understand the Issues that Will Require Resolution During Your Divorce
In addition to understanding the methods for resolving the issues in your divorce, it will also be helpful to make sure you understand exactly what those issues are. In a typical divorce, the spouses will need to come to terms (either amicably or through litigation) with regard to:
3. Copy Your Financial & Property Records
In order to move forward with your divorce, you will need to make sure you (and your attorney) have a clear picture of all of the assets and sources of income that are – and aren’t – subject to division. As a result, it can be helpful to begin compiling your family’s financial and property records as you get ready for your initial consultation. As a starting point, it will be helpful to provide your attorney with copies of:
- Bank, retirement, and investment account statements
- Property deeds and titles
- Family business records
- An inventory of non-titled assets (such as furniture, collections, and jewelry)
- A list of items that you or your spouse owned prior to your marriage
- Your prenuptial or postnuptial agreement (if any)
4. Think about What You Want from Your Divorce
Getting divorced necessarily involves an element of compromise. In order to avoid going to court, you and your spouse will need to agree on how you will split your marital assets, you will need to agree on the terms of your custody arrangement, and you will need to come to terms regarding alimony that are mutually-satisfactory.
When preparing to meet with a divorce attorney, it will be helpful to spend some time thinking about what matters the most to you in your divorce. Do you want to keep the family home? Do you have specific wants or needs with regard to child custody? These are just a couple of the questions you will want to consider thoroughly.
Common assets that are brought up during a divorce include:
- Bank, investments, and retirement accounts
- Rental property
- Investment property
- International property
- Cash (i.e. tips or revenue from selling personal property)
- Deferred compensation
- Physical assets
- Artwork or art collections
- Oriental rugs
- Coin collections
- Summer home(s)
- Gifts from parents
- Small business income, inventory, and equipment
- Privately-held business interests
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.