If you're facing a divorce in New Jersey, you're probably wondering what's going to happen to everything you've built during your marriage.
The house. Retirement accounts. Savings. Investments. Maybe a business.
Who gets what?
The first thing to understand is that New Jersey does not simply divide everything 50/50.
Instead, marital property is divided through a process called equitable distribution.
Equitable distribution means marital property is divided fairly, based on the circumstances of the marriage.
It doesn't necessarily mean equally.
Property subject to equitable distribution can include:
The court considers a number of factors when determining what an equitable division looks like.
Generally, property acquired during the marriage is potentially subject to equitable distribution, regardless of whose name appears on the account or title.
That surprises people.
You may think: "But the retirement account is in my name." Or, "I'm the one who earned that money." That doesn't necessarily mean the asset belongs entirely to you in a divorce.
Marriage is viewed as an economic partnership, and both financial and non-financial contributions can matter.
Not everything you own is necessarily marital property.
Certain assets acquired before the marriage may be excluded from equitable distribution. Inheritances and certain gifts may also be treated differently.
But it isn't always that simple.
How an asset was handled during the marriage can become important, particularly if marital and separate funds were mixed together.
That's why identifying and documenting your assets early can matter.
No - there is no automatic 50/50 rule in New Jersey.
That said, an approximately equal division may be appropriate in many marriages, particularly where both spouses contributed to the marital partnership over many years.
And contribution doesn't just mean income.
Raising children, managing the household, supporting a spouse's career, and stepping away from your own career can all be relevant.
One of the biggest mistakes I see is assuming that "fair" means whatever feels fair to you.
It doesn't. Someone may believe: "I earned most of the money, so I should keep most of the assets." Or, "My spouse cheated, so I'm entitled to more."
Those arguments may feel completely reasonable when you're angry. But that's not necessarily how a judge will look at your property.
Taking an unrealistic position can make your divorce longer, more expensive, and much more difficult to settle.
Equitable distribution is only one piece of your financial settlement.
What happens with the house, retirement accounts, investments, debt, alimony, and other financial issues can affect your life for years after the divorce is over.
That's why you shouldn't make major decisions about individual assets without understanding the entire financial picture.
I've seen people fight desperately to keep an asset only to discover later that keeping it wasn't actually the best financial decision.
Before agreeing to a property settlement, make sure you understand what you own, what you owe, which assets may be marital or separate, and what those assets are actually worth.
Don't make those decisions based on anger or assumptions about what you're "entitled" to.
Understand the law first.
That's also why I created my free Divorce Smarter Course. It explains property division, alimony, custody, separation, and other major New Jersey divorce issues so you can make better decisions before committing to something that's difficult to undo.
Until next time,
Steve