How property is divided is often one of the most sensitive issues in New Jersey divorces. Both spouses want to ensure they get their fair share, and there may be specific properties that a spouse particularly wants to keep, such as the family home or ownership of a business, which can cause disagreements that must be resolved.
But before decisions can be made about who gets what in property division, it has to be determined what assets are marital—belonging to both spouses—and what are separate, belonging exclusively to one spouse. Only marital property is subject to being split.
WHAT IS MARITAL PROPERTY VERSUS SEPARATE PROPERTY?
In general, assets acquired during marriage are marital property and assets a person had before the marriage are separate property. Inheritances, third-party gifts to one spouse, property protected by a valid prenuptial or postnuptial agreement, and personal injury settlements/awards are also generally separate property. However, if separate property is commingled during the marriage, such as depositing a third-party gift of money into a jointly held bank account or using an inheritance to purchase a home, an argument can be made that these assets are marital property to be divided.
All property is considered marital property at the beginning of the division process, until it is proven to be otherwise. For this reason, to protect your assets, divorce lawyers recommend keeping clear and complete records about gifts, inheritances, and assets you owned prior to marriage. This way, if any dispute arises during divorce, there is proof of the property’s separate status, assuming it has not been commingled.
METHODS OF DIVIDING MARITAL PROPERTY IN DIVORCE
When divorcing, you can either come to agreement between yourselves about how to divide assets or, if you can’t agree, the New Jersey court will decide for you.
NEGOTIATING A SETTLEMENT AGREEMENT
Negotiating a settlement agreement requires compromising with your spouse. Most likely, you will not both get everything you want, but you may be able to negotiate to get what is most important to you by giving your spouse something they really want. Before starting negotiations, think through what assets you most wish to keep.
Your attorney can help you with the negotiation process. Sometimes, mediation can help advance you toward settlement if you reach a stalemate. Once you and your spouse agree on how everything will be divided, your attorney will prepare a settlement agreement for your signatures and the court to review and sign off on.
Negotiating a property settlement agreement is frequently the most beneficial way to divide property. It leaves you and your spouse in control of the process and, ultimately, the outcome. However, negotiating marital property division in divorce is not always possible if there is too much acrimony between spouses or if both spouses really want the same asset.
HOW THE NEW JERSEY COURT DIVIDES MARITAL PROPERTY
If a judge divides your property, they will follow New Jersey’s rule of equitable distribution. Under equitable distribution, property is divided fairly but not necessarily equally. You could end up with 50% of assets, less than 50%, or more than 50%. It all depends upon your unique marital situation. Every divorce case is different.
The court will consider several factors to make determinations about who gets what. Some of the factors judges look at include:
- The length of the marriage
- Ages and health of the spouses
- What assets and income each spouse brought to the marriage
- The marital standard of living
- The income and earning capacity of each spouse
- Whether one party contributed to the other’s education or earning power
- Tax consequences to each spouse
- Debts of each spouse.
The judge will consider anything that they think is pertinent to making the decision. You can read the full list of criteria at N.J.S.A. 2A:34-23.1. Once the decision is made (and barring a successful appeal), you and your spouse will have to live with the judge’s ruling, which is why it is crucial to work with an experienced divorce lawyer who will advocate vigorously for you to get the best possible decision for your wishes and goals.
TYPES OF MARITAL PROPERTY TO BE DIVIDED IN DIVORCE
Here are examples of types of marital assets subject to division in divorce:
- Bank accounts
- Retirement accounts
- Investment accounts and properties
- The family home
- Vacation properties
- Rental properties
- Stocks and bonds
- Motor vehicles
- Artwork and jewelry
- Coin collections and other collectibles
- Furniture and rugs
- Business interests.
The term “division” does not necessarily mean that an asset will be split in two, although it could be. But in property division, whether negotiated or through the court, one spouse may get to keep their retirement account, for example, while the other spouse receives other assets of similar value.
Before an asset can be divided, its value has to be determined. While some assets are more straightforward to value, such as a bank account, others may require valuation by experts including real estate professionals, fine art appraisers, and forensic accountants.
HIDING ASSETS IN DIVORCE
Sometimes people try to hide assets in their divorce to avoid adding the items to the marital property bucket. Hiding assets is illegal—all property (and debts) must be disclosed in divorce. If a party hides assets, they may be forced to turn the asset over to the other spouse and could be held in contempt of court.
If you believe your spouse is hiding assets in your divorce, your attorney can investigate to discover the truth and hold them accountable.
CONTACT AN EXPERIENCED NEW JERSEY DIVORCE LAWYER FOR HELP
For help with your divorce, including the issue of property division, reach out to our experienced law firm. The attorneys at [MFR] Men’s & Fathers’ Rights Divorce Lawyers focus exclusively in the area of family law and divorce in New Jersey. We also have extensive experience assisting clients through their high-net-worth divorces. We will work diligently to help you get a fair outcome in property division and keep what is rightfully yours, whether through a negotiated settlement or in the courtroom.
Call us today at (201) 880-9770 today to schedule a confidential case evaluation.
