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Asset and Property Division

Equitable Distribution in New Jersey Divorce

What is Equitable Distribution in Divorce?

How Do We Define Equitable Distribution?


Equitable distribution refers to how marital assets will get distributed as part of a New Jersey divorce. Essentially, it is the division of marital property and marital debt. Property division is a crucial part of New Jersey divorce proceedings and can have a substantial impact on both spouse’s economic futures


New Jersey is an equitable distribution state. This means that New Jersey law states that marital assets should be distributed fairly to both spouses as part of a divorce, but not necessarily equally. In contrast, in community property states like California, marital property is considered equally owned by both spouses and subject to a 50/50 division in divorce or separation. 

How does a Court decide how to distribute marital property?


The equitable distribution of assets in a divorce is governed by N.J.S.A. 2A:34-23.1 or New Jersey’s equitable distribution statute. This equitable distribution law lays out a variety of factors the Court must consider in fairly dividing the assets the spouses acquired during their marriage. These factors include:


  1. The length of the marriage or civil union

  2. The age of the parties and their physical and emotional health

  3. The income or property brought to the marriage or civil union by each party;

  4. The standard of living established during the marriage or civil union;

  5. Any written agreement made by the parties before or during the marriage or civil union concerning an arrangement of property distribution;

  6. The economic circumstances of each party at the time the division of property becomes effective

  7. The income and earning capacity of each party, including their educational background, training, employment skills, work experience, length of absence from the job market, custodial responsibilities for children, and the time and expense necessary to acquire sufficient education or training to enable the party to become self-supporting at a standard of living reasonably comparable to marital standard of living;

  8. The contribution by each party to the education, training or earning power of the other;

  9. The contribution of each party to the acquisition, dissipation, preservation, depreciation or appreciation in the amount or value of the marital property, or the property acquired during the civil union as well as the contribution of a party as a homemaker;

  10. The tax consequences of the proposed distribution to each party;

  11. The present value of the property;

  12. The need of a parent who has physical custody of a child to own or occupy the marital residence or residence shared by the partners in a civil union couple and to use or own the household effects;

  13. The debts and liabilities of the parties;

  14. The need for creation, now or in the future, of a trust fund to secure reasonably foreseeable medical or educational costs for a spouse, partner in a civil union couple or children;

  15. The extent to which a party deferred achieving their career goals; and

  16. Any other factors which the court may deem relevant.


In other words, the divorce Court will weigh these sixteen (16) equitable distribution factors and make a decision on dividing the marital property. Important considerations will be what each spouse contributed to the marital enterprise; the marital standard of living; and each spouse’s income and earning capacity. 


While New Jersey Courts generally lean towards an equal distribution of marital property, the Court may deviate from a 50-50 distribution arrangement in weighing these statutory considerations. In other words, a weighing of the factors governing property division in New Jersey may lead the Court to order a non-equal split of marital assets. 


What assets are subject to equitable distribution?


Generally speaking, all assets acquired during the parties’ marriage are subject to equitable distribution. Typically, marital property includes any equity in the marital home; marital funds contained in the parties’ bank accounts; other real estate acquired during the marriage; each spouse’s pension or retirement accounts, including 401(K) plan, deferred contribution plans, and defined benefit plans; and any investment accounts held by either or both spouses.


Gifts and inheritances bequeathed to one spouse individually can be excluded from equitable distribution. 


In addition, premarital property (or property held by one spouse prior to the marriage) may be excluded from equitable distribution, provided that it has been properly segregated and not commingled with marital funds. 


How does the Court distribute marital debt?


As with marital assets, the Court in divorce litigation will decide how to fairly distribute debts incurred during the marriage. To be considered marital debt, the debt must have been incurred sometime between when the spouses were legally married and when the complaint in divorce was filed. The debt also must have benefitted the marital enterprise in some way. Examples of marital debt include incurring a mortgage to purchase a marital home or incurring credit card debt to pay for household expenses.

Debts which do not serve to benefit the marital relationship are not marital debts. For instance, if one spouse takes on credit card debt to further an affair or extramarital relationship, this would not be considered marital debt. 


Likewise, spousal debts incurred before the marriage start date or after the divorce complaint has been filed are not typically considered marital liabilities. 


Skilled divorce attorneys can help you strategically litigate issues like equitable distribution and property division. Divorce litigation can be complicated. Having a strong advocate by your side can help protect your economic interests and ensure you are treated fairly. Schedule a free consultation with a property division attorney at Ormond Law and get legal help in your South Jersey divorce today. 

More on Asset and Property Division

This article will explain the circumstances under which a house is sold during a divorce and under what circumstances a home can be sold before the divorce process is finalized.

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