How Are Assets and Debts Divided in a NJ Divorce?

What Assets and Debts Are Subject to Distribution?

In a New Jersey divorce, only “marital property” is subject to distribution between spouses. Marital property generally encompasses all assets and debts acquired by either or both spouses from the date of marriage until the filing of the divorce complaint.

This can include the marital home, bank accounts, retirement funds, investments, cars, and business interests developed during the marriage, as well as joint debts like mortgages, credit card balances, and loans.

Separate property, however, is excluded from division. This typically involves any asset a spouse owned before the marriage, or property received during the marriage as a gift or inheritance from a third party. However, if separate property is commingled with marital assets, it may become subject to distribution. For example, if inherited money is used for a home down payment. Determining the date of acquisition and the source of funds is important in determining whether the property is marital or separate.

How Are Assets and Debts Divided in an NJ Divorce?

In New Jersey, the division of marital assets and debts is governed by the principle of equitable distribution. This does not mean an automatic 50/50 split. Instead, the court aims for a fair, though not necessarily equal, division based on the specific circumstances of the marriage.

Once the court has determined which assets and debts are marital and subject to distribution, the estate is valued and then allocated between the parties. Spouses are strongly encouraged to reach a settlement through mediation or other negotiation tactics. However, if they cannot agree, a judge will ultimately decide the distribution of assets and debts to ensure the final division is equitable to both parties.

How is an Equitable Split Determined?

When spouses cannot agree on the division of marital property, a New Jersey court will evaluate a variety of factors to determine an equitable split. The goal is to reach a fair result, which depends on the unique facts of the case.

Courts evaluate many factors, including:

The duration of the marriage

The age and physical and emotional health of the parties

The income or property brought to the marriage by each party

The standard of living established during the marriage

The present value of the property

Financial or other contributions made by the parties

A judge uses these criteria to tailor the distribution to the parties’ needs and contributions to the marriage. For more information and to secure the help of a legal professional, contact a divorce attorney today.