Morristown area family law and divorce lawyers deliver equitable divorce settlements in Chester, Chatham, Mendham, Harding, and Morris Township
We recently published an article about Equitable Division of assets in which we clarified what this means in New Jersey. In this article, we will start with a brief reminder of why “fair” and “equal” are usually not the same. Then, we will take a closer look at the first steps of property division: classification of properties and some methods for determining the “real” value.
Let’s begin with the end in mind. Make a decision ahead of time for yourself to surrender any temptations to pull to win as much as you can in a tug-of-war battle. Instead, replace it with an absolute determination to follow a give-and-take strategy for your divorce settlement. This is truly the winning strategy. It truly is all about negotiation.
Morristown Lawyers Fight for Fair and Equitable Division Of Assets
Let’s start with a quick reminder that an “equitable” division aims for fairness, not equality in the division. You and your spouse have critical parts to play to avoid an all-out war. Opt instead to think about the division as a kind of trade and exchange arrangement where you both will get what you want some of the time, but knowing that you aren’t likely to get everything that you think is “fair”.
Equitable division in divorce is about agreeing to trade, not winner take all.
Achieving an equitable distribution has much more to do with your attitudes and having a trade-type negotiation strategy than it does with the law –until, of course, you find yourselves in court facing a judge who is deciding for you. Then, “equitable” becomes something else –we have a suggestion for you about this at the end.
Chester Property Classifications in Divorce
Now let’s review the different categories of property types, including a business. The first step in equitable distribution is to classify property. All property falls into two categories: the first classification defines whether the property is marital separate. The second characteristic distinguishes the property as either tangible or intangible.
Divorce property is classified as marital or separate
As implied by the category names, separate property identifies the property that clearly belongs to one spouse. For example, property acquired before the marriage or inherited before or during the marriage would be identified under different categories. Marital property includes property acquired during the marriage. It sounds straightforward, but actually determining which is which is not always black and white. It is pretty easy to decide which car is who’s or who owns the ski equipment; but it can be very difficult sometimes for spouses to decide who owns the pet, country club membership or the credit card bill.
Divorce assets are classified as tangible or intangible
Tangible refers to physical property. That’s easy: the house, the cash, the boat. It is anything that can be physically touched. Intangible, of course, is the opposite and refers to things like patents, trademarks & logos, trade secrets, copyrights, debts, future income or rents, business contracts, brand recognition and company good will.
Valuation of all divorce property in Morris County
The next step is to determine the value of the property. For most assets or debts, the value will be the fair market value as of the date of separation. For some items, the fair market value will be easy to determine, while others will be more complicated.
A bank account is the easiest item to value; simply find the account balance as of the date of separation. The marital residence is usually easy to value too by getting an appraisal or agreeing to use the tax value of the property. On the other hand, the value of your frequent flier miles, timeshare, or a qualified pension plan can be tricky. One of the more difficult assets to value is a business interest.
Contact Townsend, Tomaio & Newmark today. Our Divorce and Family Law Team has extensive experience handling divorces involving equitable distribution, asset division, business valuation, and high net worth cases. Ask for a free and confidential consultation regarding your divorce settlement, equitable distribution in your case, and valuation of business assets.
Valuation, division and distribution of Business Property’s assets/liabilities
While a business owned by one spouse before the marriage might be considered to be his/her separate property during the marriage, a portion of the business can also be deemed marital property. If, during the marriage, the business increased in value, both spouses worked at it, or family money was used to finance the business then some part of the business belongs to both spouses. Frequently, whenever an individuals property is commingled with marital assets, some percent of it becomes marital property.
When the business interest has, or is expected to have, a high monetary value, both spouses will likely hire independent experts. If spouses can’t agree and the divorce settlement goes to court, there could be a “battle of the experts”. Both experts will testify respectively as to the value or worth of the business. In court it will be up to the judge to decide which expert he/she finds more credible. Your attorney will make sure that your settlement agreement minimizes tax consequences, avoids penalties and protects your business assets.
There’s a lot more to NJ equitable distribution than splitting everything 50-50
Equitable division is mostly about attitudes and negotiation skills; it’s about trades and exchanges. The divorce settlement lawyers at Townsend, Tomaio & Newmark will guide you through the process of dividing and negotiating during divorce. We encourage pretrial negotiations if at all possible, however, we are prepared to litigate and fight for the rights of our clients if trial becomes our only option.