Friday, July 21, 2017
What is Equitable Distribution in NJ?
New Jersey follows the law of equitable distribution. Many times this the term arises in the context of a divorce proceeding, but few people understand what it actually means. The goal of equitable distribution is fairly straightforward: to distribute property acquired during a marriage to both spouses, regardless of whether or not the property was in the name of one or both spouses. The theory underlying equitable distribution is that a marriage is viewed as an “economic partnership” and each spouse is entitled to a share of the property acquired during the marriage. The distribution can either occur through a voluntary agreement or by order of the Superior Court. This process is often very complex and emotionally charged, especially when considering the reasons for which the divorce is sought in the first place.
Governing Law in New Jersey Regarding Equitable Distribution
New Jersey law requires courts to consider the factors listed below when making an equitable distribution of property:
A. The duration of the marriage or civil union;
B. The age and physical and emotional health of the parties;
C. The income or property brought to the marriage or civil union by each party;
D. The standard of living established during the marriage or civil union;
E. Any written agreement made by the parties before or during the marriage or civil union concerning an arrangement of property distribution;
F. The economic circumstances of each party at the time the division of property becomes effective;
G. The income and earning capacity of each party, including educational background, training, employment skills, work experience, length of absence from the job market, custodial responsibilities for children, and the time and expense necessary to acquire sufficient education or training to enable the party to become self-supporting at a standard of living reasonably comparable to that enjoyed during the marriage or civil union;
H. The contribution by each party to the education, training or earning power of the other;
I. The contribution of each party to the acquisition, dissipation, preservation, depreciation or appreciation in the amount or value of the marital property, or the property acquired during the civil union as well as the contribution of a party as a homemaker;
J. The tax consequences of the proposed distribution to each party;
K. The present value of the property;
L. The need of a parent who has physical custody of a child to own or occupy the marital residence or residence shared by the partners in a civil union couple and to use or own the household effects;
M. The debts and liabilities of the parties;
N. The need for creation, now or in the future, of a trust fund to secure reasonably foreseeable medical or educational costs for a spouse, partner in a civil union couple or children;
O. The extent to which a party deferred achieving their career goals; and
P. Any other factors which the court may deem relevant.
See N.J.S.A. 2A: 34-23.1.
It quickly becomes clear that many factors play into the distribution of assets and liabilities during a divorce, and often, the division is not a 50/50 split. Instead, the measurement of distribution is based on contributions made during the marriage – and not just financial contributions. Raising children, maintenance of the home, and emotional support are considerations of the economic value achieved during the marriage.
The Extent of Assets (and Liabilities) That May Be Subject to Equitable Distribution
Again, property acquired during the marriage is the primary subject of equitable distribution. Property that was acquired prior to the marriage is typically deemed premarital property, and is not subject to equitable distribution unless it is commingled with marital property (i.e., not kept separate). Property acquired “in contemplation” of a marriage may be subject to distribution, such as a vehicle purchased in expectation of marriage. Among the many assets that are included in the distribution process, some include:
- Retirement Benefits
- Social Security Benefits
- Business Assets
- CDs, Savings Bonds, Stocks, and Bonds
- Tangible Property
- Investment Property
- Cash, Money Market Accounts, and more.
While many people tend to focus on how assets are distributed in a divorce, few recall the debts associated with a marriage that must be confronted. These debts can include a mortgage, a car loan, credit card, taxes, and more. Further, both spouses are generally responsible for the debt acquired by one party during the marriage.
Therefore, if your spouse accumulates credit card debt while you are still married and later defaults on that debt, the creditors can seek to fulfill the debt from either party’s financial resources. Student loans are typically one kind of debt that is considered separate and usually is the sole responsibility of the person who took on the debt. However, student loan debt may be considered part of your economic condition when deciding a “fair” distribution of what assets remain from the marriage. It is essential to consider debt as part of the equitable distribution process.
Contact an Experienced Divorce Attorney Today at Weiner Law Group
Do you have more questions about how equitable distribution will affect you in your divorce proceedings? The process of equitable distribution requires additional considerations beyond those addressed in this blog. This post is intended to serve as a basic overview of what often becomes a lengthy and complex aspect of divorce.
If you are considering getting divorced in New Jersey, it is imperative to plan for how your property will be divided. Call at 973.403.1100 or contact us online to speak with an experienced divorce attorney at Weiner Law Group to learn more about the process of equitable distribution and how it can impact your divorce.