A divorce or dissolution of a civil union typically requires that the “marital property” be divided between the spouses or partners. Unlike a “community property” state where the assets of the couple are divided 50/50, New Jersey provides for division of property through “equitable distribution”. Equitable distribution requires that assets and earnings accumulated during marriage or a civil union are divided fairly, or “equitably”, but not necessarily equally.
The property and debt issues are settled between the parties by a signed Settlement Agreement or by order of the Court. It is unlikely that a spouse or a partner in a civil union will entirely waive their rights to the marital property; therefore, a matrimonial attorney can be extremely helpful during the equitable distribution process, including mediating and negotiating a Settlement Agreement, and litigating the matter before the Court, if necessary.
Ideally, the parties will come to an agreement on their own about how their marital property will be divided. The parties will need a third party to mediate an agreement for equitable distribution of their marital assets. The Marlton-based family law attorney, Richard C. Klein, Esq., can help you and your spouse come to an acceptable property division arrangement through mediation. If voluntary mediation is not an option, however, the firm’s divorce lawyers will vigorously negotiate a Settlement Agreement with your spouse’s attorney that protects your best interests and preserves your financial well-being.
It is imperative to have an experienced, knowledgeable divorce attorney at your side in court when a Settlement Agreement cannot be amicably negotiated and a complaint for equitable distribution is filed in court. South Jersey family law attorney Richard C. Klein, Esq., stands ready to provide the legal representation you require. If you are anticipating a complicated and hostile battle over your marital assets, Richard C. Klein’s 30+ years of litigation experience will be essential as you navigate the complex court proceedings to determine equitable distribution of your hard-earned assets.
New Jersey Courts & Equitable Distribution
New Jersey courts have developed a three-step process to divide marital property.
1. Determining Marital Assets & Liabilities
First, the Court will go through a discovery process to classify which property and debt is to be considered marital, and therefore subject to equitable distribution. Assets that may be included in equitable distribution are:
- Automobiles and other vehicles
- Businesses owned by one or both spouses
- Cash value of life insurance policies
- Real estate (including the marital home, vacation home and investment property)
- Furniture and fixtures in real estate
- IRAs, Pension Plans, 401K’s and other funds invested for retirement
- Stocks, bonds, cash & savings accounts
Marital assets usually, but not always, include any property acquired by one or both of the spouses during the course of the marriage or civil union, from the wedding day until the filing of the divorce or dissolution complaint. An asset does not need to be in the name of both spouses to be considered marital property.
Generally, property acquired prior to the marriage or civil union, property acquired during the marriage or civil union as gifts or by inheritance, and property acquired after the filing of the divorce or dissolution complaint is considered “separate property” and not subject to equitable distribution. In New Jersey, however, a premarital asset may be subject to equitable distribution if acquired “in contemplation of marriage.” Moreover, separate property must be kept separately and not “co-mingled” with marital assets to prevent it from being considered as marital property. Also, if separate property is improved during the marriage, it may also become a marital asset.
The Court not only orders equitable distribution of marital property but also marital liabilities and debt. Marital liabilities include but are not limited to:
- Car loans
- Credit card balances
- Debts owed to banks, savings and loan association, or any lending institutions
- Home improvement loans
- Loans payable to relatives or friends
- Mortgage balances on real estate considered marital property
- School loans (if not premarital)
- Unpaid bills (utilities, medical, etc.)
As with marital assets, it doesn’t matter whose name is on the debt instrument or contract for services. It is considered a marital liability subject to distribution between the divorcing spouses if it was incurred during the course of the marriage and does not pertain to separate property.
2. Valuing the Marital Property
After determining the marital assets subject to equitable distribution, the court will assign a monetary value to the marital property and debt. This step may be as easy as totaling up the amounts in bank accounts. On the other hand, it may require the retention of an appraiser, a forensic accountant and/or a financial analyst to provide valuations and analysis of real estate, personal property, businesses, and employment benefits such as stock options and deferred compensation.
3. Dividing the Marital Property
Once the marital assets are valued, the Court will equitably distribute them between the two spouses. “Equitable” does not mean equal, but rather what is deemed by the Court to be fair. Section 2A:34-23.1 of the New Jersey Statutes defines the factors that a court should consider in making an equitable distribution of property. Under New Jersey law, the court will consider, but not be limited to, the following factors:
- The duration of the marriage or civil union;
- The age and physical and emotional health of the parties;
- The income or property brought to the marriage or civil union by each party;
- The standard of living established during the marriage or civil union;
- Any written agreement made by the parties before or during the marriage or civil union concerning an arrangement of property distribution;
- The economic circumstances of each party at the time the division of property becomes effective;
- 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;
- The contribution by each party to the education, training or earning power of the other;
- 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;
- The tax consequences of the proposed distribution to each party;
- The present value of the property;
- 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;
- The debts and liabilities of the parties;
- 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;
- The extent to which a party deferred achieving their career goals; and
- Any other factors which the court may deem relevant.
Cherry Hill Divorce Lawyer, Richard C. Klein, Advocates for Divorcing Couples
Richard C. Klein, Esq., has represented countless spouses living in Cherry Hill, Mt. Laurel, Medford, Moorestown, Pennsauken, Haddonfield, Haddon Heights, Marlton and Voorhees, as well as the other municipalities located in Camden and Burlington and all South Jersey Counties. He is also well-known and well-respected in the other counties of New Jersey, including Gloucester, Middlesex, Monmouth, Somerset,Hunterdon, Salem, and Mercer County. No matter where you reside, you want an aggressive, experienced family law attorney to help you with your property division issues and to vigorously protect the financial security that you’ve built up throughout the years of your marriage. Call New Jersey divorce lawyer at the Law Offices of Richard C. Klein today at 856-988-5470 or contact us online to discuss your rights and liabilities in your divorce and how equitable distribution will impact your life.