When a couple decides to divorce, one topic that inevitably must be addressed is how their assets (and liabilities) will be divided when they go their separate ways. Distribution of assets and liabilities in New Jersey is handled in a way that attempts to make the division as equal as possible.
“Equitable” distribution in New Jersey involves what is known as “equitable property.” This means that all property that was acquired during the marriage should be split as evenly as possible between the spouses. This division of marital assets should be done in a way that is fair and equitable to both parties.
Marital vs. Non-Marital Assets
The first step in determining distribution of assets in New Jersey is defining which assets and liabilities are marital and which ones are considered non-marital. Generally, these can be defined as follows:
Marital Assets typically include any and all assets that were acquired during the marriage or are the result of the marriage “enterprise.”
Non-Marital Assets typically are items that can clearly be defined as belonging only to one spouse, such as gifts, inheritances, personal injury awards or the proceeds of a pension earned by one party prior to the marriage.
Typically, any business or property owned by either spouse prior to the marriage also is considered non-marital. However, if the value of the business or property increased during the period of the marriage, the other spouse may be entitled to a portion of that increase. In most cases, non-marital property that has been commingled with marital property becomes marital property.
There are a number of “factors” involved in determining the Equitable Distribution of Assets in New Jersey, as defined by New Jersey Statutes, Section 2A:34-23.1. These factors are considered by the court with regard to distribution of assets. More details can be found here.
Distribution of Assets in New Jersey – The Process
It is important to note that division of marital assets in New Jersey does not necessarily involve a physical division. In many cases, each spouse simply gets a certain percentage of the total value of the property. Once the percentages have been established, each spouse will then be entitled to items for which the value or worth equals his or her percentage. This process can get very complicated very quickly. When a judge and several lawyers are added to the mix, divorcing couples often find themselves more frustrated than when they started.
How Mediation Can Help?
The process of defining which assets are marital versus non-marital can be complicated and can become confusing. An experienced mediator understands how division of marital assets in New Jersey works and can help define the property in question, go over all of the factors at hand and facilitate the process in an effective manner.
Distribution of assets in New Jersey can be contentious and emotional for a divorcing couple and mediation can provide a neutral environment in which they can work together to reach an agreement on how their property should be divided.
Contentious Equitable Distribution Issues
The Marital Home
The equity in the marital home is often one of the biggest assets the spouses divide. The equity is established by determining the current market value of the home at the time of separation, less any debts or liens associated with the property. Making this calculation requires a paid real estate appraisal, or a real estate agent may prepare a market analysis for free.
Pensions and Retirement Accounts
Vested pensions, as well as unvested pensions, may also be considered marital property. A pension vests when all the requirements to receive the pension have been met. Outside experts may be required to determine the marital portion of pension assets.
Similarly, retirement account benefits and savings plans earned by the couple may be considered as marital assets subject to equitable distribution. Retirement and savings plans can vary greatly but generally there are account statements that will best determine the value of these accounts. If necessary, outside experts may be called in for evaluation or to determine the marital portion of these accounts.
These many difficult issues related to the equitable distribution of assets and liabilities can best be addressed within the setting of mediation with an experienced mediator.