Dividing property is one of the most important and often most contentious issues when a couple divorces. New Jersey requires equitable distribution, which means marital property must be divided fairly. If you are facing a divorce and wondering what you are entitled to keep, understanding how equitable distribution in New Jersey works is essential.
At Weiner Law Group, we guide clients through every stage of the divorce process, including complex property division matters. Since 1988, our firm has delivered personalized legal representation with a strong focus on protecting each client’s interests. Reach out to speak with someone today.
New Jersey Property Division
New Jersey law requires courts to divide marital property in a way that is fair to both spouses, but that does not necessarily mean it will be split 50/50. New Jersey courts divide property by:
- Identifying all assets owned and debts owed by either spouse;
- Classifying that property as marital or non-marital; and
- Distributing marital property equitably.
Equitable distribution in New Jersey involves weighing each spouse’s earning capacity, marital contributions, and other relevant factors.
Marital vs. Non-Marital Property
Courts do not divide all property spouses own during a divorce. They generally distribute only marital property, making understanding the distinction between marital vs. non-marital property essential to understanding equitable distribution.
What Is Marital Property?
Marital property refers to most assets and debts acquired by a spouse during the marriage, such as:
- Income,
- Bank accounts,
- Investments,
- Real estate, and
- Retirement accounts.
Marital property belongs to both spouses, even if titled in only one person’s name.
What Is Non-Marital Property?
Non-marital or separate property generally includes:
- Property acquired before marriage or after separation;
- Gifts or inheritances received by one spouse;
- Property excluded by a valid agreement; and
- Certain personal injury legal settlements.
To keep it from becoming marital property, you generally must treat the property as separate, meaning only one spouse treats the property as theirs.
Transforming Non-Marital Property into Marital Property
Non-marital property is typically not subject to equitable distribution unless it has been commingled or otherwise transformed into marital property. You may purposefully or accidentally mix separate property with joint property, which can transform it into marital property and subject it to equitable division.
For example, if a spouse owned a home before the marriage but the couple lived in it and made joint mortgage payments, a portion of the home’s value may be subject to equitable distribution.
Factors Considered in Equitable Distribution
Factors considered in an equitable distribution in New Jersey include:
- The length of the marriage;
- The age and health of each spouse;
- The standard of living established during the marriage;
- Each spouse’s income, separate property, and earning capacity;
- Each spouse’s contributions to the marriage and the home;
- Any written premarital or marital agreements;
- The need for a parent with custody of minor children to occupy the marital home;
- Debts and liabilities of each spouse;
- Tax consequences of the proposed distribution;
- Waste or misuse of marital property by a spouse; and
- Mistreatment of one spouse by the other.
Courts may consider any other relevant factors, too.
Duration of the Marriage
Longer marriages often involve more complex financial entanglements. Courts may be more inclined to divide property equally in long-term marriages, where you have spent more of your lives intertwined.
Age and Health
If both spouses are of relatively similar age and health, the court may be less inclined to deviate from an equal distribution of property. However, one spouse being significantly older and having a lower earning capacity or a spouse having a severe disability affecting their ability to work may justify adjusting the distribution.
Standard of Living
Courts consider the lifestyle the couple maintained during the marriage when dividing property. This includes housing, vacations, spending habits, and overall financial comfort. The goal is to allow both spouses to live as closely as possible to that standard after the divorce.
Property and Earning Potential
The court may adjust property distributions if one spouse earns significantly more than the other. This outcome is more likely if the lower earner sacrificed their career attainment for the marriage or the other spouse.
Marital Contributions
Courts consider financial and non-financial contributions to a marriage, including:
- Acquisition of and improvements to marital property,
- Provision of homemaking and childcare services; and
- Support enabling one spouse to achieve a higher earning potential.
A spouse who managed the home or raised children full-time must receive a fair share of marital assets, even if they did not bring money into the home.
Written Agreements
If the couple signed a prenuptial agreement, the court considers it. Courts usually follow fair, voluntarily signed agreements that do not hide important financial information. If an agreement appears unfair, the court may disregard part or all of it.
Custodial Parent Needs
If one spouse has the primary custody of minor children, courts may prioritize keeping that parent (the custodial parent) and children in the marital home. Homes often represent a large percentage of overall marital property, which can impact a court’s ability to achieve equal property distribution.
Debts and Liabilities
Debts work like assets in divorce. Just as property must be divided fairly, so too must liabilities, such as:
- Mortgages,
- Credit card balances,
- Personal loans, and
- Tax liabilities.
Courts examine who incurred each debt, why it was taken on, and who benefited.
Tax Considerations
Some assets come with significant tax consequences. Courts consider potential tax liabilities when crafting an equitable distribution plan to ensure the property distribution does not unfairly burden either spouse.
Waste or Misuse of Funds
Courts may reduce one spouse’s share of the marital estate if they wasted or misused assets before or during divorce. This is known as a dissipation of assets. Examples include gambling away money, giving large gifts to someone outside the marriage, or intentionally spending down accounts after the relationship ends.
Mistreatment of One Spouse
Although New Jersey is a no-fault divorce state, the court may still consider serious mistreatment, such as physical or emotional abuse, when dividing property. For example, if one spouse’s abuse caused the other to lose a job or suffer long-term financial harm, the court may award a greater share of marital assets to the affected spouse.
Weiner Law Group Can Help You Protect What Matters Most
Dividing property during a divorce is rarely straightforward, but it will likely affect your financial well-being for years to come. At Weiner Law Group, we take pride in providing strategic, compassionate representation. With decades of experience and a commitment to personalized legal service, we are here to help. Call us at 973-403-1100 or contact us online to schedule a confidential consultation.