“Marital assets and debts are always divided equally between divorcing spouses”
We have previously blogged about some of the common misconceptions pervading the divorce process in New Jersey. This blog will dispel another popular New Jersey divorce myth: Marital assets and debts are always divided equally (50/50) between divorcing spouses.
Some states (e.g., California) are “community property” states, where marital property is divided between spouses equally at the time of divorce. New Jersey, however, is not one of them. New Jersey is an “equitable distribution” state, meaning that marital assets and debts are divided in an equitable (i.e., fair) manner between spouses taking into consideration the facts of each case. While this may result in an equal (or near equal) division of assets and liabilities in many cases based on the facts, it is not automatic. Equity may require a disproportionate division of an asset or debt depending on the specific facts presented.
New Jersey’s equitable distribution statute (N.J.S.A. 2A:34-23.1) identifies 16 factors for a court to consider in making an award of equitable distribution:
1. The duration of the marriage or civil union;
2. The age and physical and emotional health of the parties;
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 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 that enjoyed during the marriage or civil union;
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.
One of the more frequently cited factors is the “income and property brought to the marriage” by each party, i.e., premarital property. If one spouse owned an asset prior to the marriage, that spouse may be entitled to retain that asset free and clear of any interest of the other in the event of divorce. There are some exceptions to the exclusion of premarital property from equitable distribution, including but not limited to cases where the premarital property was “commingled” or mixed with marital assets; in those cases, the commingled asset loses its exempt status and becomes subject to equitable distribution.
The bottom line for purposes of this blog is that it is important for anyone going through or contemplating a divorce in New Jersey to understand the equitable distribution process and set aside previous misconceptions. That often begins with an understanding that “equitable” does not necessarily mean “equal,” and that there is no truth to the misconception that property is automatically divided equally between spouses in every divorce.
Thomas Roberto, Esq. is a partner and shareholder at the law firm of Adinolfi, Lieberman, Burick, Falkenstein, Roberto & Molotsky, PA serving clients throughout New Jersey. Tom focuses his practice on all aspects of divorce and family law. Helping his clients work through a difficult and emotionally charged time, Tom is a tireless advocate working with families experiencing a broad range of unique family law issues.