Equitable Distribution of Assets
Property Division in Monmouth County
The division of property and assets is one of the most complex issues in any divorce. New Jersey divorce law calls for equitable distribution. It’s an important legal term with significant consequences.
Equitable distribution means property and assets do not need to be split 50/50 between the spouses. They need only be split equitably, with a judge being the final arbiter of that equity. Hiring a Monmouth County asset division attorney who knows the ins and outs of what adds up to an equitable split could be the difference in whether your contributions to the marriage gets fair treatment. Your property division attorney is there to ensure that everything–from time spent raising children to assets that were brought into the marriage to income earned during the marriage—gets fair treatment in the settlement.
Contact us today at (732) 585-1651 to learn how we can help you!
Defining Marital Assets Under New Jersey Law
Before assets can be distributed, they must be identified. The first step in that process is determining whether the assets are marital property or separate property.
Marital property is that which is jointly owned by the couple and subject to equitable distribution. Common examples would be a joint savings account that was opened just after the marriage or the house the couple bought together after they were married a couple years.
Separate property is owned exclusively by one of the spouses. Let’s say one of the parties had a significant stock portfolio that was built up prior to the marriage. No further investments were made after the wedding and the portfolio was kept as a separate nest egg to finance a future entrepreneurial venture. Presuming all of this, the portfolio is still the distinct property of the person who brought it into the marriage.
What an asset division lawyer must help you do is navigate through the considerable gray area that can exist between these two examples. What happens if…
- Your spouse owned a business prior to the marriage. That would seem to make it separate property. But, what if, during the time you were married, an expansion was undertaken that significantly raised the value of the business? If the investment into the business was done with common funds, then you have a claim to at least some of that value in an equitable settlement.
- Your spouse started a business two years ago and will continue running it after the divorce. You don’t begrudge their continued ownership. But in the plans that were presented to investors at the outset, your spouse identified Year 3 as the one where a corner would be turned into profitability. Your common funds went into starting the business. If Year 3 does start to see boom times, equity calls for you to share in any future prosperity.
- You inherited a tidy sum of money from a favorite relative. Is this separate property or marital property? Even if the inheritance came after the marriage, it might be your exclusive property. How that money was handled will be determinative. Did you keep it separate from the rest of the family assets? Then a court can easily define it as separate property. But if you commingled it with common funds, then it may be defined as marital property and subject to equitable distribution.
These examples just scratch the surface of the subtle distinctions between marital property and separate property. They are distinctions that can be worth a lot of money.
In some cases, it’s well worth your while to have a forensic accountant come in. Forensic accounting in a divorce can help define the monetary value of a new business, of a complex stock portfolio or even uncover hidden funds if you suspect your spouse is trying to pull one over on you. Your property division lawyer can fight for your interests as the marital assets are defined and help determine if and when forensic accounting is necessary.
Distributing Marital Assets
Every couple can avoid having their assets settled in a trial. New Jersey law requires that mediation at least be given a chance. In this process, a third party will work to facilitate discussion between the parties and help them find their own resolution. However, a mediator may not impose a solution. If negotiations break down, then a trial is the result, and a judge will decide how assets are to be distributed.
Judges have a great deal of leeway in determining what is equitable. It’s common for a judge to consider the length of the marriage. Some of the examples cited above dealt with potential businesses that a couple may have started together. Whether that was done over a five-year marriage, or a 20-year union will certainly weigh into what the judge ultimately considers equitable.
The income and assets that each spouse brought into the marriage will be a factor. That has the potential to favor the spouse who brought the most. But another element of an equity split is considering the standard of living that each person enjoyed in the marriage and wanting to keep that as stable as possible. The ability to maintain a standard of living can be further influenced by any age gap that may exist between the spouses, as well as their comparative health. How a judge reconciles these potentially conflicting factors is up to them–and at least influenced by how well your lawyer presents your side of the case.
If one of the spouses put a career on hold to spend more time with children, that will be a significant factor in what is considered equitable. Judges will look at the entire family as a single enterprise and the value of taking care of the kids is going to be given every consideration. This includes assessing whether the stay-at-home spouse now needs to return to the workforce and requires additional training and education to get back up to speed in their field.
Any assets you are awarded are not considered “new” for tax purposes. However, if you are awarded the summer home in upstate New York and then sell it later, you will be taxed at the time of the sale. A farsighted lawyer will help anticipate these possible future costs in making your case for what constitutes an equitable settlement.
Consideration of Fault
New Jersey divorce law provides grounds for an at-fault divorce. Adultery is an unfortunate example of this. Domestic violence is a tragic example. To get the divorce, one spouse proves that the behavior of the other is the reason. It’s a natural follow-up question to wonder if the victimized spouse will be favored in the distribution of assets.
In a judge’s ideal world, they would not consider fault when it comes to asset distribution. But there are cases where equitable distribution demands that the fault be at least looked at. For example, if your spouse blew a substantial amount of money at the casinos in Atlantic City, it would hardly be equitable for you to essentially cover their losses in the settlement. If there is any factor you believe a judge must know, it’s imperative that documentation be provided. Your lawyer can work with you on gathering the evidence you need.
Don’t Do This Alone
New Jersey law allows you to file for divorce without a lawyer. But when you consider everything that is at stake financially, a good Monmouth County property division attorney is both a wise investment and a practical necessity.
When you come to Stolfe Zeigler New Jersey Family Law Group, you’re coming to a law firm that was explicitly founded to help people in your situation get excellent representation of their interests, whether that be in negotiation, mediation, or litigation. We’ll fight for you when it comes to defining and distributing your assets, along with everything else that the emotionally difficult and legally challenging process of divorce entails. Call us today at (732) 585-1651 or contact us online to set up an initial consultation.