Asset division is one of the more taxing parts of separation in New Jersey. You may not know what you will receive at the end of this process, and that can be difficult and stressful. The New Jersey divorce lawyers of Ziegler Law Group, LLC are here to explain how asset division in New Jersey separation works and what you can expect.
- New Jersey employs an equitable distribution model in divorce, ensuring a fair, though not necessarily equal, division of assets.
- Nearly all assets acquired during the marriage, including homes, investments, and business interests, are subject to distribution in a New Jersey divorce.
- The court considers various factors such as the duration of the marriage, financial contributions, and existing agreements like prenuptial or postnuptial agreements to determine a fair and just distribution.
Is New Jersey an Equitable Distribution State?
Yes, New Jersey is an equitable distribution state. This means that, in divorce, your marriage property is not split straight down the middle, 50-50. Instead, your assets are divided in a manner that the court rules as fair. In other words, one individual may receive more of the assets than the other. Equitable distribution does not have to be equal.
In order to divide assets, the court goes through a three-step process of identifying the assets to be distributed, valuing the marital properties, then reviewing the properties and other assets using a lengthy list of factors. The court will also determine what is considered “marital property” and “separate property.”
What Can Be Divided During a NJ Divorce
Here is a list of items that may be divided up during your separation or divorce:
- Permanent residence
- Vacation home
- Investment properties
- Home equity lines of credit (HELOCs)
- Credit card debt
- Deferred compensation plans
- Supplemental executive retirement plans (SERPs)
- Pension plans and retirement accounts
- Profit sharing plans
- Personal possessions
Essentially, any property, asset, or debt you or your spouse have acquired during your marriage will be potentially subjected to distribution.
Factors Affecting the Division of Assets in New Jersey
As mentioned previously, the court is granted discretion to analyze your assets and divide them up between you and your spouse. In accordance to the New Jersey Equitable Distribution Statute, the following factors are considered when deciding who gets what:
- Duration of your marriage
- Standard of living during your marriage
- Age, physical, and emotional health of both parties
- Income and properties brought to the marriage by both parties
- Any written agreements, such as pre- and postnupital agreements, created before or during the marriage concerning property division
- Economic circumstances for both parties once division becomes effective
- Contribution in the education, training, and earning power of the other party
- Present value of properties
- Taxes, debts, and liabilities
- Present trust funds and the creation of future ones for children or the other party
- Parental responsibilities and child custody
- Extent to which either party deferred their career goals for the other
- Any other factor that court may deem relevant to your case
The main purpose of the court considering these factors is to take into account spouses who have created a joint enterprise or those who were stay-at-home parents and homemakers. This means that, even if one spouse stayed at home to take care of the children while the other worked, the items purchased through the single spouse’s income are still considered marital property acquired through the effort of a married couple, not a single individual.
Assets That Qualify as Separate Property
Now let’s look at the assets that may be considered “separate property,” or property that cannot be distributed between the parties during divorce.
1. Assets Obtained Before Marriage
Property acquired by either spouse before entering into the marriage is typically considered separate property. This includes real estate, financial accounts, investments, and personal belongings obtained prior to the marital union. The legal principle behind this classification is to acknowledge and respect the individual financial histories of the spouses.
It's essential to note that commingling of assets, where separate property becomes mixed with marital property, can complicate the determination. Legal guidance is recommended to navigate these nuances and ensure a clear delineation between separate and marital assets.
2. Assets Obtained After Filing For Divorce
Assets acquired after the official filing for divorce are generally classified as separate property and are exempt from equitable distribution. This provision encourages spouses to maintain financial independence during the divorce process. Any income, property, or assets obtained after the divorce proceedings have commenced are considered separate and do not form part of the marital estate subject to division unless purchased with marital money.
3. Inherited or Gifted Assets
Inheritances or gifts received by one spouse during the course of the marriage are typically considered separate property. This includes money, real estate, personal property, or any other assets bequeathed or gifted to one spouse by a third party. The rationale behind this is to recognize the individual nature of these acquisitions and to protect them from being subject to division during divorce proceedings.
However, it's important to note that the way these assets are managed during the marriage can impact their classification. For instance, depositing inherited funds into a joint account might alter their status.
4. Assets in a Prenuptial or Postnuptial Agreement
Assets outlined as separate property in a valid prenuptial or postnuptial agreement are exempt from equitable distribution. Prenuptial and postnuptial agreements allow couples to define the terms of asset division and specify which assets are to be treated as separate property in the event of a divorce. These legally binding agreements provide clarity and predictability, helping to streamline the asset division process.
It's crucial for individuals considering or currently undergoing a divorce to ensure that their prenuptial or postnuptial agreements are properly drafted, executed, and in compliance with New Jersey law. Seeking legal counsel from a NJ divorce attorney like those at Ziegler Law Group, LLC during the creation of such agreements can help avoid potential challenges in the future.
Contact the Family Law Attorneys of Ziegler Law Group, LLC Today
For those seeking to separate or divorce in New Jersey, equitable distribution can be confusing. That is why you need guidance from a family law or divorce lawyer. Ziegler Law Group, LLC has assisted many individuals through their separation. Contact us today at 973-533-1100 to schedule a consultation and benefit from the guidance of experienced professionals committed to securing the best possible outcome for your unique situation.
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