When a marriage ends, many people assume that each person in the relationship will receive half of what they own together. While that may sound logical, that is not what typically happens. Rather, in New Jersey divorces, asset division is guided by the principle of equitable distribution.

What Is Equitable Distribution?

Equitable distribution is the concept that the court divides the assets in a marriage as well as all debts in a fair manner. This does not mean equal. To do this, the court will consider the following factors:

  • The length of the marriage
  • The age and both the physical and emotional health of each person
  • The income and property that each party brought into the marriage
  • The standard of living experienced during the marriage by both parties
  • Any statements each party made prior to or during the marriage that may provide guidance on property division should the marriage fail, such as prenuptial agreements
  • The economic circumstances of each person both before and during the marriage
  • Each person’s income and earning capacity, including factors related to educational background, specialized training or certifications, employment skills, length of being out of the job market, work experience, and other factors such as the custodial responsibility for children
  • The contributions each person makes to the other in terms of education, training, and earnings
  • The contributions each person made to the acquisition, dissipation, preservation, depreciation, and appreciation of any of the marital property owned
  • The tax consequences of distributions (such as from retirement accounts)
  • The current value of all property
  • Any specific needs that one parent has when providing care for the children
  • Debts and liabilities within the marriage

These are some of the most influential aspects of a marriage a judge will consider when determining the best way to divide assets after a marriage ends in a New Jersey divorce.

What Is the Goal of Equitable Distribution?

Unlike equal asset division, the goal is not to simply split everything based on current values. Instead, with equitable distribution, the goal is to provide each party with the fair share they deserve based on all factors contributing to the marriage.

One partner may have the necessary skills, job experience and means to rebuild their life after divorce, while the other partner faces more challenges to move on after the marriage ends. For example, if one spouse spent years working to build a career while the other stayed at home with the children, the parent who stayed home does not have an equal ability to build financial freedom after a divorce.

By contrast, equal distribution focuses on dividing assets 50/50. That is not always ideal for various reasons. If one spouse acquired all of the marital assets because they worked and provided all the financial resources during the marriage while the other chose not to work, a 50/50 split may not be fair.

Marital Assets vs Non-Marital Assets

It is also helpful to know that, under divorce law in NJ, not all assets and liabilities are considered the responsibility of both parties. That is, not all assets are subject to equitable distribution.

  • Assets acquired or accumulated in divorce over the course of a marriage are mostly considered “marital assets.” Most of these assets are settled based on equitable distribution.
  • Assets and debts incurred independently by just one spouse may not be considered equitable for both to pay. These may be exempt from consideration when equitable distribution decisions are made.

Some examples of marital assets could include:

  • The family home or any real estate or property purchased during the marriage
  • Cars and other assets owned within the home
  • Retirement assets built during the marriage
  • Pets
  • All debts incurred during the marriage, including mortgages
  • Family-owned and private businesses built during the marriage

Some examples of non-marital assets that may not be considered a component of equitable distribution include:

  • Types of debts or assets acquired prior to the marriage and not paid down or managed during the marriage as a component of the marriage’s financial funds
  • Inheritances by one spouse before or during the marriage
  • Gifts given to one spouse specifically by a third party during the marriage
  • Assets bought or received by a spouse with the clear and direct result of income or efforts made before the marriage
Reasonable Allocation Tailored to Each Couple’s Unique Situation

The goal of a family law judge in a divorce is to determine what is fair. In many situations, fair asset division can be a complex component of the marriage. In every situation, if you and your ex can work out a plan that you both believe is fair and present it to the judge, the judge is more likely to approve it. If both individuals cannot agree on the terms of asset division, you are left to the decisions made by the court.

For example, one spouse may wish to remain in the family home. In exchange for that ownership, the other spouse may be able to receive all of the retirement savings (based on the value of each). There are situations where both parties may not want the same thing. This is where divorce mediation can be helpful. Your divorce attorney will work with you to protect your family and your future.

Keep in mind that the same rules apply to debt division. Even if one person was responsible for building all of the debt during the marriage, both partners may be responsible for paying the debt equitably, depending on your individual circumstances.

Working with a New Jersey Family Lawyer Is Critical

When it comes to navigating divorce law in NJ and ensuring fair asset division, you need to work closely with an experienced family law attorney who can offer guidance and support.

If you are considering divorce or are going through a divorce and feel you are not being treated fairly, call Family Law Attorney Abigale Stolfe and the legal team at Jersey Coast Family Law for a consultation at 732-361-4718. Our New Jersey family lawyer will provide you with guidance on various equitable division opportunities that may work well for your specific situation.

With offices in Toms River and Red Bank and serving clients throughout New Jersey, you can depend on Jersey Coast Family Law, Where Family Comes First, to protect your interests through the divorce and asset division process.

Where Family Comes First

Check out our other blogs: Divorcing Later in Life: Understanding Gray Divorce in New Jersey

Divorce Challenges in Spring Lake or Red Bank? Reach Out to Jersey Coast Family Law for Expert Guidance.