In New Jersey, marital property is subject to equitable distribution. This means that in the event of a divorce, marital property will not necessarily be divided on fifty-fifty or equal basis, but rather, on a fair or equitable basis.
Equitable distribution process:
First, a determination must be made as to which assets are considered to be marital assets. Generally, assets acquired from the date of the parties’ marriage, through the date of the filing of the Complaint for Divorce, are considered to be marital assets that are subject to equitable distribution. These assets may include, but are certainly not limited to, homes, bank accounts, brokerage accounts, businesses, corporations, retirement accounts, pensions, employment benefits, stock options, deferred compensation, cars, and furniture and furnishings.
Generally, property acquired prior to the marriage, inheritance received by one spouse during the marriage, and gifts from third parties to one spouse during the marriage, are considered separate property, and are not subject to equitable distribution. In addition, property acquired subsequent to the filing of the Complaint for Divorce is exempt from equitable distribution. The party claiming that property is exempt has the burden proof, meaning that he or she must demonstrate (or prove) that the property is, in fact, exempt.
There are various exceptions to the aforementioned concepts. For instance, if separate property is comingled with marital property the Court may consider it to be marital property. Moreover, the value of any improvements to separate property made during the marriage may also be considered to be marital property.
The marital property must then be valued, and thereafter distributed in the most equitable fashion. The Court does this by considering several statutory factors, including, but certainly not limited to: the length of the marriage; the age and health of the parties; the income or property that each party brought to the marriage; the earning capacity and income of each party; the standard of living established during the marriage; the economic circumstances of each party at the time that the property is divided; any written agreement made by the parties concerning the property division; the contributions of each party, financially, as a homemaker, or otherwise, to the acquisition or appreciation of the value of marital property; the dissipation of the value of marital property by each party; and the debts and liabilities of the parties.