One of the most important parts of a New Jersey divorce is dividing marital assets fairly. Understanding the legal principles that govern property division is essential for protecting your financial future. It’s important to be aware of the system New Jersey uses when dividing property during a divorce. Continue reading and work with a Union County property division attorney for more information today.
What System Does NJ Use When Dividing Property in a Divorce?
New Jersey uses the principle of equitable distribution when dividing property during a divorce. This system is different from community property states, where spouses generally automatically get an equal 50/50 split of assets. Instead, it requires a fair division of the property acquired by the couple during the marriage.
The term equitable means fair, not necessarily equal. A judge will review various factors to determine what constitutes a fair distribution. These factors include the duration of the marriage, the age and health of each spouse, their economic circumstances, and contributions made to the marriage. Contributions can be financial or non-financial, such as supporting a spouse’s career or being a homemaker. The court seeks an outcome that is just and reasonable for both parties under the specific circumstances of their case. This approach allows the court flexibility to address each marriage’s needs.
What Counts as Marital Property?
Marital property in New Jersey generally includes all assets, both real and personal, that a couple acquired or that significantly appreciated during the marriage. This can encompass a wide range of assets, such as the marital home, bank accounts, retirement funds, investment portfolios, vehicles, jewelry, artwork, and even business interests developed during the marriage.
Marital property does not include assets owned by either spouse before the marriage or property received during the marriage as a gift from a third party or through inheritance. These assets are typically considered “separate property.” However, if separate property is commingled with marital assets or appreciates in value due to the efforts of one or both spouses during the marriage, that appreciation may be subject to equitable distribution. Only property deemed marital is subject to division by the court.
Who Gets the House in an NJ Divorce?
The marital home is often the most complex asset to divide under equitable distribution in New Jersey. Since the goal is fairness, not necessarily a 50/50 split, there are several common options for handling the primary residence.
One spouse may “buy out” the other’s interest, often by refinancing the mortgage and paying a lump sum. The couple may also agree to sell the house and divide the net proceeds. In some cases, particularly when minor children are involved, the court may award one parent the exclusive use of the home for a set period before it must be sold. The final decision depends on the spouses’ financial capacity and the needs of any children.
