New Jersey is Not a Community Property State

Many people assume that when you’re married, everything automatically belongs to both spouses equally. Understanding that is an understandable belief on some level, that simply is not true in most U.S. states, including New Jersey. In this regard, New Jersey is not a community property state. If you are contemplating a New Jersey divorce, or if you’ve been served with divorce papers in the Garden State, it is important for you to understand the way assets and debts will be dealt with in your proceedings.

As mentioned, a moment ago, New Jersey is not a community property state. Rather, family law courts in New Jersey utilize what is known as the equitable distribution of property standard. We explore why New Jersey is not a community property jurisdiction at the same time

New Jersey Is Not a 50/50 State

In community property states, most assets earned during marriage are split right down the middle. Assets are allocated 50 percent to each spouse unless there exists some reason why this should not be the case. This is what is meant by a community property state. New Jersey does not work this way.

In the Garden State, courts focus on what is fair and equitable, not what is equal. That means marital property is divided based on the circumstances of the marriage, not automatically split in half. Depending on the situation, one spouse may receive more than the other. Such a division can be considered a fair and equitable outcome.

What Property is Actually Divided?

Not everything you own is automatically on the table for equitable division in a New Jersey divorce. Rather, courts divide only marital property, which typically includes:

• Income
• Savings
• Homes
• Retirement accounts
• Debts

This is all assets and debts acquired during the marriage.

Property you owned before getting married generally is considered separate property and not marital property. Thus, these assets and debts are not divided during divorce proceedings. Other possible examples of separate property not subject to equitable division may also include personal gifts and inheritances.

How Judges Decide What’s “Fair”

Because New Jersey follows the equitable distribution or division of property standard, judges look at the overall picture of the marriage and associated divorce case. They consider factors that can include:

• Length of marriage
• Each spouse’s income and future earning potential
• Age of parties
• Health of parties
• Lifestyle the couple created while married

Non-financial contributions matter can be taken into consideration as well, including such factors as:

• Raising children
• Managing a household
• Supporting a spouse’s career

The goal is to reach an outcome that makes sense based upon the overarching facts and circumstances of a particular case. Please note even though nowhere in the New Jersey equitable distribution statute says there should be a 50/50 split of assets, most divorces there is a 50/50 split.

Debt Isn’t Automatically Split Either

Just like property, debt in New Jersey is divided fairly and equitably and not equally. Credit card balances, loans, and other debts taken on during the marriage are reviewed carefully.

Courts may look at who benefited from the debt and who is better positioned to repay it. One spouse could end up responsible for more debt if they earned significantly more or if the debt was largely for their own use. This often surprises people who expect debts to be split evenly.

Planning Ahead Saves You Stress in a New Jersey Divorce

Keep in mind that because New Jersey doesn’t automatically divide everything 50/50, planning matters in a marriage. For example, prenuptial and postnuptial agreements allow couples to decide in advance how property and debt will be handled if the marriage ends.

Even without a formal agreement, being thoughtful about how accounts are titled, how assets are shared, and how money is managed can help protect both spouses. Clear financial boundaries during a marriage can prevent confusion, conflict, and costly legal battles later.

In the final analysis, in New Jersey, the best protection is understanding how the system works and making informed decisions early when it comes to matters surrounding assets and debts in marriage dissolution proceedings. If you have any questions or need legal assistance, you can schedule a no cost, no obligation initial consultation by calling the Law Offices of Peter Van Aulen at 201-845-7400.