New Jersey's Equitable Distribution Law: What It Means for Your Divorce

New Jersey's Equitable Distribution Law: What It Means for Your Divorce

If you live in New Jersey and are considering divorce, you might not understand how your assets and debts will be divided. Many couples who have never divorced believe that their assets will be equally divided between them if their marriage ends. However, New Jersey follows equitable distribution in divorce cases, which does not always mean that a couple's assets will be divided equally. Instead, equitable distribution means your assets and debts will be divided fairly. Understanding New Jersey divorce laws for property division is important when you're planning to end your marriage.

Here's some information about equitable distribution from a divorce lawyer in New Jersey at Ziegler Law Group, LLC.

Equitable Distribution vs. Community Property

Like most other states, New Jersey follows equitable distribution for property division in divorce cases. Only a handful of states are known as community property states. In a community property state, a couple's assets and debts are divided equally between them when they get divorced. By contrast, equitable distribution means a couple's assets will be divided in a way the court believes is fair. This is not always an equal division.

The first step to understanding the equitable distribution and how it might affect your case is to understand the difference between separate and marital property. A couple's marital property and debts are what will be divided. The separate property of one spouse will not be included in the marital estate and will not be divided.

Marital vs. Separate Property in New Jersey

A couple's marital property includes nearly all assets that were acquired by either spouse during the marriage under N.J.S.A. § 2A:34-23(h). There are a few exceptions, however. During the marriage also doesn't mean until the date the divorce decree is issued. Instead, it means all assets acquired between the date of your marriage and the date either you or your spouse file for divorce. Once the divorce paperwork is filed, any assets you or your spouse acquires between then and when your divorce is final will be separate property.

Some examples of marital property that might be divided in your divorce include:

  • Money either of you earned while married
  • Bank accounts
  • Retirement savings contributions made during the marriage
  • Investments made during your marriage
  • Cars, the marital home, household furnishings, and other assets purchased during your marriage
  • Business started by either spouse during the marriage
  • Gifts between spouses
  • Appreciation of investments and retirement accounts during the marriage
  • Debts acquired by either spouse during the marriage


Your separate property includes all of the assets you owned before you married and anything you might purchase after you file your case. In addition, an inheritance either you or your spouse received during your marriage will be the beneficiary's separate property. A gift you or your spouse received from a third party is also the separate property of the recipient. However, gifts between spouses are considered marital property. Finally, the increase in value of separate assets is also considered to be separate in New Jersey.

However, separate property can lose its separate nature if it is commingled with marital assets. For example, if your spouse received an inheritance but deposited the proceeds in your joint checking account for both of you to use, it will no longer be considered your spouse's separate property.

The increase in a separate asset's value during the marriage will be separate as long as the other spouse doesn't contribute to it. For example, if you owned your home before you married, the appreciation in its value during your marriage will also be your separate property. However, if your spouse financed a major renovation, paid half of the mortgage, and made other similar contributions, the portion of the increase attributed to your spouse's efforts would be marital property.

NJ Divorce Laws on Splitting Assets

Since your assets and debts will be divided fairly, it's important to understand how the property division works in New Jersey. If you and your spouse can't reach an agreement on how to divide your property and debts, the court will decide for you. Courts consider what is fair when making decisions about property and debt division, and you might not receive the result you want.

You need to understand how much your property is worth before trying to determine how to divide your marital property. While it is easy to value certain assets, others will require a professional valuation or appraisal. Having an expert value a business, your home, or other similar assets can help to ensure you receive your fair share in your divorce.

You and your spouse can negotiate with each other to try to reach a property settlement agreement. It's important to understand the value of all of your marital assets and the extent of your liabilities to ensure a fair division. You'll also need to understand potential tax consequences that might occur with taking certain assets, and a divorce lawyer in New Jersey might help.

If you leave the decision up to a judge, they will consider multiple factors, including:

  • How long your marriage lasted
  • You and your spouse's respective ages
  • You and your spouse's physical and mental health
  • Any property and income each of you brought into the marriage
  • The standard of living you enjoyed during your marriage
  • The financial circumstances of both you and your spouse once your divorce is final
  • Any contributions you or your spouse made to facilitate the other's education and earnings potential
  • Whether one of you put off starting your career during the marriage for the benefit of the other spouse
  • The value of the marital property and the contributions each of you made to it
  • Tax consequences for each of you
  • If there are children, whether the primary custodian needs to continue living in the marital home for the benefit of the children
  • The debts and liabilities of each of you
  • Whether a trust fund might need to be established for the children's future educational or medical needs

Who Gets the House in a Divorce in NJ?

In many cases, the marital home is the most valuable asset a couple owns. Determining who will get the house in a divorce is frequently the source of significant conflict. There are a few ways to resolve this issue. If you agree, you and your spouse could sell your home and split the equity. If one of you doesn't agree to sell the home, the other spouse could ask the court to force the sale. There isn't a guarantee that a forced sale will be ordered, however.

If you have minor children and are their primary residential custodian, you might want to stay in your home instead of forcing your children to move. There are a couple of ways to address this issue. If you can afford it, you could buy out your spouse's interest by giving up other assets. You could also obtain a cash-out refinance of the mortgage and use the excess to pay your spouse. Finally, some couples choose to continue co-owning the marital home until the children have grown and take turns staying in the home with the children.

Dividing Debts in Divorce

Debts are included in property division in New Jersey divorces. If a spouse had debts before the marriage, they will remain their separate and sole responsibility. However, any debts you incurred during your marriage will be divisible. If a marital asset has a secured debt attached, the spouse who receives that asset during the division will typically be responsible for the debt. For example, if you get a car during your property division, you'll likely be responsible for making the payments on the auto loan.

In some cases, a judge will order one spouse to be solely responsible for debts they incurred during the marriage. For example, if your spouse opened a large number of credit card accounts without your knowledge and ran the balances up by making frivolous purchases you didn't know about, the judge might order them to be solely responsible for paying them off instead of including them in the total value of your marital estate.

However, you should keep in mind that your creditors are not part of your divorce case. This means that they can still come after you for repayment if your spouse fails to make payments on debts held in both of your names after your divorce. If your spouse fails to make payments as agreed after your divorce on a jointly held debt, the creditor could come after you for repayment. For this reason, it's best to try to pay off any debts held in both of your names before divorcing if possible.

Talk to a Divorce Lawyer in New Jersey

Deciding how to divide your assets and debts is a major concern when you are preparing to get divorced. It's a good idea to consult an experienced attorney from Ziegler Law Group, LLC to ensure your rights are protected. Call us today to schedule a consultation at (973) 533-1100.

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