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Equitable Distribution in New Jersey – What does it mean?

By Snyder Sarno D'Aniello Maceri da Costa LLC on June 26, 2023

When parties to a divorce cannot make an agreement of property allocation on their own, it will then be determined by a trial judge. A common misconception in divorce is that property is automatically split 50/50 between the parties. While this may be true in a minority of states, in New Jersey courts utilize “equitable distribution” to allocate property during a divorce. (See N.J.S.A. 2A:34-23).

New Jersey has emphasized the use of equitable distribution and its partnership-based model is grounded in public policy. (See Smith v. Smith, 72 N.J. 350, 361 (1976)). In utilizing this model, the Court is better able to consider the value of unpaid labor, such as housework, in the fulfillment of career goals for the other spouse. This philosophy allows the court to view property as a result of both parties’ labor instead of solely as the property of the income-earning spouse. (See Tucker v. Tucker, 121 N.J. Super at 539, 546 (Ch. Div. 1972)).

What is Equitable Distribution?

The ultimate goal of equitable distribution is to effect a fair distribution of marital property. To do this, a trial judge must:

  1. Identify the marital assets;
  2. Determine the value of each asset; and
  3. Decide how such allocation of the asset can most equitably be made.

(See Slutsky v. Slutsky, 451 N.J.Super. 332 (App.Div.2017)).

What is a Marital Asset?

New Jersey considers marital assets to be all property, both real and personal, which was legally and beneficially acquired by either of the spouses during the marriage. Gifts (unless given to one spouse from the other) or inheritances are not considered marital property. (See N.J.S.A. 2A:34-23(h)). “Real” property refers to what would normally be considered land or a home and the land it sits upon. “Personal” property refers to most other things (cars, jewelry, etc.) owned by the spouses.

What is NOT a Marital Asset?

Typically, there are four major categories non-marital assets will fall under. (1) property that was purchased by one spouse prior to the marriage, and not in contemplation of the marriage; (2) property that was gifted specifically to one spouse by a third party prior to the marriage or during the marriage; (3) property that was inherited by a spouse prior to the marriage or during the marriage; and (4) property that was received or purchased by a spouse during the marriage that was clearly the direct result of the efforts or income of that same spouse prior to the marriage. While there is a general presumption that property acquired during the marriage is deemed “marital property” for equitable distribution, if you can show facts which prove the property falls under one of these categories it may be exempt from equitable distribution.

What Happens with Income and Retirement Assets?

One aspect of marital assets that hasn’t been discussed yet is income and retirement assets. These tend to require more of an analysis by the courts when determining how they are to be split. The portion of a pension which is acquired during the time of the marriage is typically considered a marital asset, to be split during the equitable distribution process. (See Innes v. Innes, 117 N.J. 469, 505 (1990)). However, any increased value in the pension post-divorce is not subject to equitable distribution, though it may be considered in other financials such as payment of alimony. (See N.J.S.A. 2A:34-23). Income is typically considered in divorce when determining whether alimony or child support is appropriate. (See N.J.S.A. 2A:34-23). In these calculations the Court will look at the incomes of both parties to determine how best to allow both parties, and the children, to maintain lifestyles as close to the marital one as possible. (See Lepis v. Lepis, 83 N.J. 139 (1980)).

How Does Marital Property Distribution Work?

Once martial assets have been identified, the court must then determine how to allocate it between the spouses. When deciding how to do this equitably, the court will utilize a variety of factors. Some, but not all, of the factors considered are listed below.

Equitable Distribution of Property Factors

  • How much property and/or income each party brought to the marriage.
  • Length of the marriage.
  • The standard of living created during the marriage.
  • The age of each party, as well as their physical and emotional health.
  • Each party’s current employment and potential employment measured by education, work experience, time needed for training and time spent away from the job market.
  • The present value of the property, and the tax consequences that either party may face if they acquire the assets.

(See N.J.S.A. 2A:34-23.1).

How Can We Help?

Now that you have a better understanding of what the court may do when it comes to assets, you probably want to know how you can best position yourself in your divorce case. While there is no exact formula as to how the court will allocate property, we can help you anticipate what may happen.

If you have any questions regarding your New Jersey divorce or equitable distribution, please contact the skilled matrimonial attorneys at Snyder Sarno D’Aniello Maceri & da Costa LLC. Call us today at (973) 274-5200.  

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