What Process Do New Jersey Courts Use to Divide Property During a Divorce?
Navigating property division is one of the most important aspects of a New Jersey divorce. Understanding the process courts use to divide property is crucial in protecting your financial rights and future. Continue reading for more information on New Jersey’s system and work with a skilled Morristown property distribution attorney today.
What Process Do NJ Courts Use to Divide Property During a Divorce?
New Jersey courts use what is known as “equitable distribution” to divide marital property in a divorce. Equitable does not necessarily mean equal (50/50), but rather what the court determines is fair under the specific circumstances of the marriage.
The process involves identifying which assets and debts qualify as marital property, assigning a monetary value to each, and dividing the estate fairly between the parties based on the following criteria and more.
- The length of the marriage
- The age and physical/emotional health of both parties
- The income or property each party brought to the marriage
- The standard of living established during the marriage
- Pre or postnuptial agreements
- The economic circumstances of both parties
- The income and earning capacity of both parties
- Contributions made by either party to the other’s education or earning power
Courts evaluate a wide range of information specific to the relationship at hand. The goal is a final outcome that is just and equitable.
What is Marital vs Separate Property?
In New Jersey, only marital property is subject to equitable distribution. Marital property includes all assets and debts acquired by either party during the course of the marriage. This can include houses, bank accounts, retirement funds, businesses, and credit card debt.
Separate property, however, is exempt from this process. This includes property owned by a spouse before the marriage, or property received during the marriage as a gift or inheritance solely by one spouse. However, if separate property is commingled with marital assets, it may lose its separate property status. For example, if marital funds are used to renovate a home owned separately by one spouse, it could be considered marital property.
Can Spouses Decide Property Division?
Yes, spouses are allowed and encouraged to decide property division without the court’s intervention. New Jersey courts prefer that couples reach an agreement regarding the distribution of their assets and debts. This is typically achieved through mediation, collaborative divorce, or direct negotiation between the parties and their attorneys.
When a couple successfully negotiates and signs a Marital Settlement Agreement, it is presented to the judge at the final divorce hearing. As long as the agreement is deemed fair, reasonable, and not the product of fraud or coercion, the court will almost always incorporate the terms into the final judgment. However, if the couple cannot agree, the presiding judge has final say over the outcome of property distribution.
