New Jersey Family Law and Divorce Lawyers
One of the most important issues individuals considering a divorce in New Jersey must address is division of property. New Jersey courts apply a methodology known as equitable distribution. Despite common misconceptions, “equitable” does not always mean an equal division of property. Rather, it is designed to be a fair distribution of property. Determining what constitutes a fair distribution can be a complicated and often contentious process. The knowledgeable New Jersey divorce lawyers at Lyons & Associates, P.C. can help guide you through the process. There are three basic steps in the equitable distribution process: identifying assets, valuing assets, and distributing assets.
Identification of Assets
A fair division of assets first requires distinguishing marital property from separate property. Marital property refers to assets acquired during the marriage, such as a couple’s home, savings, cars and collectibles. If a mortgage was taken out in only one spouse’s name, it will still be considered marital property if it was acquired during the marriage.
Separate property refers to property acquired prior to marriage, such as those obtained through an inheritance or gift. These types of assets are usually excluded from equitable distribution and remain with the spouse who earned it or received it as long as the gift or inheritance is not commingled with marital assets.
Difficult questions arise when one spouse asserts that they owned something prior to the marriage, because funds are often commingled during the marriage. Property owners can also transmute separate property into marital property by changing title to the property during the marriage. When this happens equitable distribution is not as clear.
Valuation of Assets
Property is typically valued at its current fair market value. This term is defined as the amount for which one could sell the asset if sold today. Retirement pensions, business assets, and other complex assets can be difficult to value and may require input from a specialist, such as a tax expert, forensic accountant, professional appraiser, or business and pension valuation expert.
Distribution of Assets
Disagreement as to how to distribute assets is common. For example, one spouse may want to sell the marital home and divide the proceeds immediately, but the other may desire to stay in the home for some period of time, particularly if children are involved and enrolled in school.
Retirement accounts are often subject to a federal law called the Employee Retirement Income Security Act (ERISA), and can only be distributed to a former spouse by a special Order approved by the plan administrator. Qualified Domestic Relations Orders (QDROs) are complex, and you should seek the advice of a qualified attorney to assist you in its preparation.
It is not uncommon for divorcing couples to have a significant amount of debt to divide in addition to assets. Often, marital debt is equally divided. However, the court may assign the debt to one spouse depending on the payment of circumstances surrounding the debt. Getting a divorce will not prevent creditors from seeking the debt from both spouses, regardless of who incurred it. Individuals considering divorce are advised to speak to an experienced divorce lawyer as early as possible. He or she may recommend closing any shared accounts. Failure to take steps to protect yourself early could result in expensive late fees and damage to your credit.
Factors to Consider When Dividing Property
New Jersey statutes guide judges as to what factors to consider when dividing marital assets. Some of these factors include:
- Length of marriage
- Marital standard of living
- Age and health (physical and emotional) of each spouse
- Relative education of spouses (for example one spouse may need to further his or her education to become self-supporting)
- Whether one spouse deferred career goals to tend to the family (homemaker contributions)
- Value of separate property or debt
- Tax effects of property distribution on each spouses’ finances
- Whether trusts must be established for dependent children, for example if the children have special medical needs
- Any pre- or post-nuptial agreements
- Each spouses’ income and earning capacity
- Each spouses’ debts and liabilities
- Any other relevant factor
Judges have discretion as to how much weight each factor should be given. However, often the length of marriage and marital lifestyle are overriding considerations.
New Jersey Family Law and Divorce Lawyers at Lyons & Associates, P.C. Guide Divorcing Couples Through Equitable Distribution in New Jersey
If you are facing divorce, you need a highly skilled negotiator standing by your side. New Jersey divorce lawyers at Lyons & Associates, P.C. have extensive experience identifying assets, including hidden assets and income streams. We strive to get our clients the most favorable divorce settlement. Call us at 908-575-9777 or contact us online. We represent clients throughout New Jersey, including Bridgewater, Basking Ridge, Mendham, Morristown, Somerville, South Plainfield, Somerset and Woodbridge including Somerset County, Morris County and Union County.