What is the Equitable Division of Assets

In basic terms, the equitable division of assets standard is a legal framework used by New Jersey courts to distribute marital property and debt fairly between divorcing spouses.

Equitable distribution is a legal framework used to divide marital property fairly during a divorce. Unlike community property states in which assets are split 50/50, New Jersey courts aim for a division based on what is deemed fair and equitable under the facts and circumstances of a particular case. The end result is that the division of assets and debts may not always be equal, may not necessarily be a 50/50 split.

Marital Property vs. Separate Property

Marital Property: Marital assets is that property and those liabilities acquired during the course of the marriage. Generally speaking, it does not matter which spouse technically obtained the property or asset. Nor does it matter whose name is on a title if we are talking about a vehicle or real estate. Commonplace examples include:

• Income earned during the marriage
• Real estate purchased during the course of a marriage
• Retirement accounts,
• Debts including mortgages, vehicle loans, or credit card balances

Separate Property: Separate property (and debts) or nonmarital assets (and liabilities) refer to assets (and debts) acquired before the marriage, after the date of separation, or via inheritance or gifts specifically given to one spouse. Separate property is generally not subject to division, but there are exceptions. For example, if separate property was commingled with marital assets (perhaps like depositing an inheritance into a joint bank account), it potentially could lose its separate property status.

Factors Considered in Equitable Asset Division

As mentioned previously, New Jersey courts consider a variety of factors when determining how to divide marital property pursuant to the equitable division standard. These factors are outlined in New Jersey statutes and include:

• Duration of the marriage
• Age and health of each spouse
• Income and earning capacity of each spouse
• Standard of living enjoyed during the marriage
• Contributions of the parties to the marriage
• Tax consequences
• Debt and liabilities
• Custody of children
• Any agreements between the parties

Steps to Divide Assets When Applying Equitable Division Standard

Before presenting the basic steps that are followed to divide assets using the equitable division standard in a New Jersey marital dissolution case, we emphasize (as noted previously) every case is unique. Thus the exact process can vary from one divorce case to another. Nonetheless, the basic steps associated with dividing assets and debts in a New Jersey divorce proceeding are:

• Identification of assets
• Valuation of assets
• Classification of assets
• Division of assets

Bear in mind that at each one of these points in the process, a dispute might very well arise in regard to assets and how they should be divided. Four areas of contention that are more apt to occur in a New Jersey divorce case are:

• Retirement accounts
• Real estate
• Businesses
• Hidden assets

Legal Counsel and Protecting Your Interests

Because of the complexity that can be associated with asset and debt division in a New Jersey divorce, this fundamental component of marital dissolution proceedings underscores the need for skilled, dedicated, and experienced legal counsel. A tenacious New Jersey divorce lawyer can best protect your interests on a number of fronts, that include:

• Identifying and valuing all marital assets and debts
• Advocating for a fair and equitable division based on your unique circumstances
• Protecting your separate property and protecting you from your spouse’s separate debt
• Navigating complex issues like business valuation or retirement account division

If you have questions concerning equitable distribution of assets and divorce in New Jersey, call the Law Offices of Peter Van Aulen today at (201) 845-7400 for an initial free consultation.