Who Keeps the Family Home in a New Jersey Divorce?

Key Takeaways

In a New Jersey divorce, the marital home is divided by equitable distribution, meaning fairly rather than automatically 50/50.
A home one spouse owned before the marriage can still have a marital share if marital funds paid the mortgage or the home gained value during the marriage.
Whose name is on the title does not by itself decide who keeps the home.
Where minor children are involved, the law weighs the custodial parent’s need to stay in the home.

During a New Jersey divorce, a marital home is generally divided in accordance with the equitable distribution law, meaning the home may be divided fairly, not necessarily equally. Homes purchased during the marriage are considered marital property. However, a home owned by one spouse prior to the marriage may have a marital share if joint funds were used to pay the mortgage, or the home gained value during the marriage. The name on the title does not automatically dictate who will keep the home. Additionally, if minor children are involved, the law will also consider the custodial parent’s need to remain in the home. Generally, the most common options are selling, buying out a spouse’s share, or continued co-ownership. If you are getting divorced in New Jersey, you may be wondering whether you or your ex-spouse will get to keep your family home. Read on to learn more.

How Are Assets Divided in New Jersey?

In New Jersey, your assets will most likely be divided through the process of equitable division. It is important to note that equitable does not mean equal. For the most part, your assets will not be split 50/50. Instead, they will be divided in a way that is fair to both parties. In order to make this decision, the court will consider:

The length of the marriage
The age and health of the parties
The standard of living established during the marriage
Any written agreement made by the parties before or during the marriage related to property distribution, for example, a prenuptial agreement
The income and earning potential of each party
The contribution by each party to the education, training, or earning power of the other
The debts and liabilities of the parties
The child custody arrangement of the parties (if applicable)

Is My Home Marital or Separate Property?

When a court determines the division of assets, they do so by considering what assets are marital property and what assets are separate property. Marital property is assets that were accumulated throughout the duration of a marriage, while separate property refers to assets acquired before or outside the marriage. Marital property is subject to equitable distribution, and separate property is exempt from it.

A couple’s family home is considered marital property if it was bought during the marriage or converted into marital property during the marriage. If a spouse owned the house prior to the marriage, its premarital value will typically remain separate property, though the home is not automatically shielded from equitable distribution.

Two things can give the other spouse a marital interest in a home one spouse owned first:

Commingling: If marital income was used to pay for the home, including mortgages, taxes, or renovations during the marriage, the home may become commingled, and tracing the original separate portion of the home’s value becomes difficult.
Increase in value during the marriage: If the home’s value increases as a result of the efforts of either spouse, or marital funds were invested in the home, that portion of the increase can be subject to equitable distribution in accordance with N.J.S.A. 2A:34-23.1. Growth that can be solely attributed to the market with no marital effort will generally remain separate property.

How Is a House Divided?

When equitably distributing a house, there are three main ways that this can be done. Spouses can sell the house and divide the proceeds. Alternatively, one spouse can buy out the other spouse’s equity in order to keep the home. A final option can include co-owning the house in order to allow a family to keep their children under the same roof.

A buyout depends on the home’s net equity, found by subtracting the mortgage balance from the home’s appraised value, so the parties usually agree on a joint appraiser. The spouse keeping the home typically has to refinance the mortgage into their own name alone.

When Children Are Involved

The presence of minor children can impact the outcome of the division of marital assets, including the marital home. In accordance with the statute, the need of a parent with physical custody of a child to own or occupy the marital residence specifically lists this as a factor.

In practice, this means the court may allow the custodial parent and children to remain in the home rather than forcing an immediate sale. Sometimes, this occurs through a deferred sale, which means the home is not sold until a fixed future date, like when the youngest child finishes high school, at which point the proceeds would be divided.

If you are getting divorced in New Jersey, our firm is here to help. Reach out today to speak with an experienced and dedicated divorce attorney about your options.