How Equitable Division Works in New Jersey Divorce Cases

Understanding Equitable Distribution in New Jersey Divorces

While many people in New Jersey decide to end their marriages, the state has one of the lowest divorce rates in the U.S. According to Statista. In fact, only 2.7 divorces occur per every 1,000 residents. While the divorce rate is low, people who decide to end their marriages in New Jersey will need to understand how equitable distribution works, which is how property is divided in divorces.

What Is Equitable Distribution?

While some states divide marital property equally between the spouses, New Jersey does not. Instead, the state uses a legal process called equitable distribution to divide the assets that couples have accumulated during their marriages. The equitable distribution of assets means that they will be divided fairly, but the division will not necessarily be equal. This practice is in contrast to community property states, where the assets are divided equally between the spouses.

How New Jersey Courts Distribute Assets

In New Jersey, the courts follow a three-step process to distribute property in a divorce. This multistep procedure includes the:

  • Identification of the assets that are subject to distribution in the divorce
  • Valuation of the assets that will be distributed
  • Determination of the most equitable way to divide the assets

The assets that might be subject to distribution in a divorce include property and belongings that either spouse has purchased or earned during the marriage. Marital assets may also include improvements to the separate property that was obtained during the marriage. Some examples of the assets that may be divided in a divorce include:

  • The marital home
  • Other real estate
  • Businesses
  • Automobiles
  • Bank accounts
  • Household furnishings
  • Lottery winnings
  • Art collections
  • Pensions
  • Retirement accounts
  • Stock options
  • Bonuses

Marital property generally includes any possessions that have been acquired by either spouse from the date that he or she got married until the date that the divorce was filed.

Separate Property

Separate property generally includes assets that were acquired by either spouse before the couple got married. It also includes property that was acquired by one spouse during the marriage as a gift from someone else or through an inheritance. Finally, separate assets include property that a spouse acquired after the divorce was filed. For example, if you purchase a car after filing a petition for divorce, your vehicle will not be included in the marital estate.

It is important to understand that separate property must not be commingled with a couple’s assets to prevent them from being deemed to be marital property. For example, if you receive an inheritance during your marriage, you might want to keep it separated from the funds in your joint bank account. Separate property that is improved during the marriage might also end up being considered a joint asset. For example, if you owned a home before you got married and used marital funds to improve it after your marriage, it might no longer be considered to be separate property. The court will look at whether incremental increases in the value of the separate property during the marriage resulted from contributions by one or both spouses or if the increase was simply due to fluctuations in the market.

Understanding Equitable Distribution in New Jersey Divorces

Valuing the Property

Valuing the marital property can be a fairly straightforward process or a very complex experience depending on the types of assets that have been acquired. For example, if you have an extensive art collection or own a business, you might need to hire an art appraiser or an accountant to value your collection or business. An accountant might also be needed to figure out the value of certain types of business benefits, including stock options, restricted stock and deferred compensation. For other types of assets, bank statements, account statements and real estate appraisals might prove to be sufficient.

The Factors Courts Consider in Equitable Distributions

According to New Jersey statutes N.J.S.A. 2A:34-23(h), judges are granted broad discretion in determining how to divide assets in the most equitable way. Courts in New Jersey consider several factors when deciding how to complete an equitable distribution of assets. These can include:

  • The length of the marriage
  • The age and health of both spouses
  • The property or income that each spouse brought into the marriage
  • The standard of living the couple enjoyed during the marriage
  • Whether a prenuptial or postnuptial agreement exists concerning property division
  • The spouses’ current financial circumstances at the time the property is divided
  • The earning capacity and income of both spouses
  • How much each person contributed to the education and earning power of his or her spouse
  • Contributions that a spouse made as a homemaker
  • Actions that each spouse took to acquire, depreciate or appreciate the value of the marital property
  • The present value of the property
  • The tax consequences of a proposed distribution
  • Whether the spouse who has been awarded physical custody of the children needs to remain in the marital home and keep the household furnishings
  • The debts of both spouses
  • Whether a trust fund needs to be established to pay for the future educational or medical costs of the children or a spouse
  • Whether one spouse put off achieving his or her career goals for the benefit of the marriage
  • Any other relevant factors

This is not an exhaustive list, but these considerations are meant to provide some guidance to judges when they are trying to determine how to equitably divide the marital estate in a divorce.

There are a couple of important things to keep in mind when you are thinking about equitable distribution. In general, the marital assets only include the belongings that are acquired from the date of your marriage until the date that the complaint for divorce was filed. It also does not matter in which spouse’s name an asset was acquired. For example, if your spouse purchased a vehicle during your marriage that is only in his or her name, it will still be considered to be marital property. It is also important to note that one spouse’s fault in a divorce is not considered when it comes time to divide the property.

Get Help From an Experienced Divorce Lawyer

People who end their marriages in New Jersey will need to contend with many issues. One of the most contentious issues in many divorces concerns how to divide the assets that have been acquired during the marriage. The information provided above is simply an overview of the equitable distribution laws of New Jersey and is not a substitute for the help that an experienced divorce lawyer can provide. No two divorces are the same. In some situations, the division of the property can be fairly simple. In other circumstances, property division can be very complex.

Contact the Law Offices of Kelly Berton Rocco to schedule a consultation and learn more about how equitable distribution might work in your divorce. Our offices are located in Court Plaza North in Hackensack. We can be reached via telephone at (201) 343-0078 and by email at Get in touch with us today so we can help you with your divorce.

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