New Jersey is an “equitable distribution” state. This means property division is based on fairness rather than a strict 50-50 split. To achieve a fair outcome, you should use a strategic give-and-take approach. This is more effective than a winner-take-all battle.
The winning strategy for any divorce settlement is negotiation. You must understand how property is classified and valued to protect your interests. Our family law team serves clients in Chester, Chatham, Mendham, Harding, and throughout Morris County. We guide you through every step of this multifaceted process.
How Property is Classified in a New Jersey Divorce
Classification is the first step in equitable distribution. Every asset and debt is categorized to see if it is subject to division. These classifications fall into two main areas:
1. Marital vs. Separate Property
- Separate Property: This identifies assets belonging exclusively to one spouse. It typically includes property acquired before the marriage or an inheritance received at any time.
- Marital Property: This includes most assets and debts acquired by either spouse during the marriage.
The definitions may seem clear, but the lines often blur. Determining ownership of items like country club memberships, pets, or credit card debts requires legal guidance. This ensures a fair classification for your settlement.
2. Tangible vs. Intangible Assets
- Tangible Assets: Physical property you can touch. Examples include the marital home, cash, vehicles, and boats.
- Intangible Assets: Non-physical assets that hold significant value. These include patents, trademarks, copyrights, business contracts, and brand recognition.
Valuation of Divorce Property in Morris County
After classification, we determine the fair market value of each item as of the separation date. Some items are straightforward, but others are highly complex:
- Simple Valuations: Bank account balances are easily determined by statements. Marital residences are typically valued through professional appraisals or tax values.
- Complex Valuations: Assets such as frequent flier miles, timeshares, or pension plans require deeper analysis.
- Business Interests: One of the most difficult assets to value is a business interest.
If you own a business, contact Townsend, Tomaio, Newmark & Clancy today. We have extensive experience in high-net-worth cases and complex business valuations.
Dividing Business Property and Liabilities
A business owned by one spouse before the marriage may be separate property. However, a portion can be deemed marital property if certain conditions are met:
- The business increased in value during the marriage.
- Both spouses worked to grow the company.
- Marital or family funds were used to finance business operations.
Separate property often loses its status when commingled with marital assets. In high-stakes cases, both spouses may hire independent experts. If you cannot reach a settlement, a “battle of the experts” may occur in court. A judge will then decide which valuation is most credible.
Why Negotiation Outperforms Litigation
Equitable distribution relies heavily on negotiation skills. The divorce settlement lawyers at Townsend, Tomaio, Newmark & Clancy encourage pretrial negotiations. This approach helps minimize tax consequences and avoid penalties. However, we are fully prepared to litigate and fight for your rights if a trial becomes necessary.
Contact us online or call our Morristown, NJ office at 973-840-8970.
