When it comes to dividing marital assets, New Jersey courts follow the laws governing equitable distribution, rather than ordering an automatic 50/50 split. Under the laws of equitable distribution, marital assets are divided fairly and equitably based on certain statutory factors, which does not necessarily mean equally.

While the courts often divide assets evenly in many divorces, judges are within their power to award different amounts to each spouse to ensure fairness. This practice is especially common in marriages with compelling or exceptional circumstances such as spouses having disabilities or other economic limitations. Our family law attorneys can review the laws of equitable distribution with you to learn more.

Equitable Distribution Does Not Always Mean Equal

In a New Jersey divorce, equitable does not always mean equal. The Court considers a number of factors when determining how to split assets, including the duration of the marriage, financial circumstances of each spouse, and each spouse’s financial and non-financial contributions to the acquisition and preservation of marital assets. Generally, if it has been decades since you took your vows, there is a greater likelihood of a an equal split, absent other compelling circumstances. Conversely, in a shorter marriage, the Court may be inclined to divide the assets unequally. A common example is where a couple recently purchased a home with little equity in it and one spouse contributed more toward the downpayment. A Court may find it unfair to divide proceeds from the sale of the house equally, as opposed to giving the spouse who contributed more a greater share of the proceeds.

Income and earning capacity are also crucial components of asset division in a divorce. If you have significantly lower earnings potential than your spouse, you may receive a larger share of the marital assets. Non-financial contributions, such as homemaking or child-rearing, are also taken into consideration. For example, if one spouse contributed more toward the down payment on a home, but the other spouse was solely responsible for its upkeep and raising the couple’s children, the Court will take both kinds of contributions under consideration.

Importantly, however, assets acquired before the marriage, separate inheritances, and gifts received by one spouse from third parties during the marriage are generally not subject to equitable distribution.

Are Debts Divided Fairly in a New Jersey Divorce?

Marital debts are also divided during equitable distribution and are divided fairly, not necessarily equally. Courts divide marital debts according to the same set of factors as assets. Importantly, if only one spouse took out a loan or other debt during the marriage, it is often deemed to be a marital debt, even if it is in only one spouse’s name. This is often surprising to people when they begin the divorce process. Whether it will be deemed a marital debt essentially depends on what the debt was incurred for. For example, if the debt was incurred to help make ends meet or improve a home, the Court will almost definitely deem it a marital debt. Conversely, if it was incurred to purchase something expensive for only one spouse over the other spouse’s objection, the Court will be less inclined to deem it a marital debt. Debt that only one spouse incurred prior to the marriage, or after the divorce was filed, will likely be deemed that spouse’s sole responsibility to repay.

Unfortunately, a divorce cannot change your contract with a creditor. If a debt is in both your names, the bank or lender can still pursue repayment from either party if the other defaults. It is critical to refinance or close joint accounts as part of your divorce settlement.

Reach Out to Our Attorneys for Help With Property Division During Divorce

Divorce laws can be complex. You should consult with a knowledgeable family law attorney to get advice that addresses your unique situation.

Schedule your case evaluation now to learn more about equitable distribution and what could be considered fair and equitable in your case.