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Property Division and Equitable Distribution

In New Jersey

Your Property Is At Risk Without A Qualified New Jersey Property Division and Equitable Distribution Attorney

When going through a divorce, who gets to keep the blender and who has the right to visit the family dog are probably the last things on your mind. Even though most couples want everything to be settled quickly, you shouldn’t overlook the importance of property division and splitting assets in a fair, equitable manner.

As a proponent of matrimonial mediation and keeping divorce cases out of court, I believe that property can and should be divided in a fair manner that addresses the needs of both parties and protects their interests. Without give and take and reasonable expectations, the process comes to a halt, costs increase, and the court will eventually decide who gets what – which might not be ideal for either party. As a family law attorney and mediator, my goal is to help both parties settle their differences and achieve a fair, effective divorce agreement.

Making Equitable Distribution Work in New Jersey

Like most other states, New Jersey follows a principle known as equitable distribution. This doesn’t mean that property is necessarily divided down the middle. Instead, a portion of ownership is assigned to each spouse. Some items are considered separate property, meaning they are not subject to distribution during the divorce process. Items that may qualify as separate property include gifts from a third-party, items acquired before the marriage, and inherited property. All other marital assets and liabilities will be divided fairly.

Before determining what property is subject to equitable distribution and what property is considered separate property, couples need to itemize all property and assets. Once the items have been listed and valued, ownership can be assigned.

Common assets and liabilities that are divided include the following:

•Home
•Personal property
•Vehicles
•Boats
•Business interests
•Retirement funds
•Bank accounts
•Investments
•Furnishings
•Household items
•Collectibles
•Mortgages, loans, and leases

Valuing Assets and Dividing the Property

In most cases, identifying the assets is only the beginning of the equitable distribution process. Before negotiating a divorce agreement, the parties must know how much their marital estate is worth. In many cases, the parties must hire experts to value certain property. The most common assets that require valuations include businesses, homes, retirement accounts and pensions, vehicles, and collectibles.

Once the property is identified and valued, the parties can determine how to split up their marital estate. Today, almost 90 percent of divorces are settled with a property settlement agreement (often called a “PSA”). The PSA spells out exactly how the property will be divided. Working with an experienced matrimonial attorney or mediator to create a property settlement agreement will help you protect your interests in property, stay out of court, minimize costs and reach a solution quickly and effectively. As your attorney or mediator, my goal is to resolve property division in a fair and amicable manner.

Talk To An Attorney And Get Your Legal Questions Answered

Talk To An Attorney And Get Your Legal Questions Answered

What Courts Consider When Dividing Property in New Jersey

While the goal is to avoid having the court decide how to divide your property, it is still important to understand its evaluation process so that you understand your rights, as well as the potential implications if you litigate your case.

New Jersey courts typically identify marital property as any property acquired between the date of the marriage until the filing of the divorce complaint. Therefore, if you and your spouse have been separated for a while, any additional assets or debts you accumulated may still be subject to division during the divorce process.

Also, New Jersey courts do not rely on how an asset is titled when distributing property, so just because your name is on the car does not necessarily mean that the court will award it to you.

Another important thing to know is that New Jersey courts do not consider fault when dividing your property.

The court has wide discretion when determining how to divide property between you and your spouse. It evaluates many factors when making this decision, including:

•The length of your marriage
•The health of you and your spouse
•The income each spouse brought into the marriage
•The standard of living established during the marriage
•The contribution either spouse made to the education, training, or earning power of the other spouse
•The contribution each spouse made to acquiring, preserving, appreciating, or depreciating marital property
•The contribution of either spouse as a homemaker
•The income and earning capacity of each spouse
•How long and how expensive it would be for a dependent spouse to become self-sufficient
•Whether one spouse deferred their career goals to help the other spouse
•The need of a parent with physical custody of a child to stay in the marital home and keep the household belongings in the home
•The debts and liabilities of each spouse
•The property’s present value
•The potential tax consequences of different distribution models
•Any written agreement by the spouses before or during their marriage that relates to property division
•The economic circumstances of each spouse at the time the division would occur

Basically, the court can consider any relevant information when determining how to divide your property. It can also determine how much weight to give one factor over another. Due to this wide discretion, many couples try to keep their case out of court to avoid unexpected surprises or unfavorable outcomes.

Talk To An Attorney And Get Your Legal Questions Answered

Talk To An Attorney And Get Your Legal Questions Answered

Special Considerations for Dividing Property

When you are working out how to divide your property, you may have many concerns.

There may be complex issues involved in your case, such as:

Blended Property

Some property may be partially classified as separate property but your spouse may be entitled to a portion of it. For example, if you purchased a home before your marriage, this would be separate property. However, if your spouse made improvements to the home or the home’s value increase during your marriage, your spouse may be entitled to a portion of the increased value of the property. It can be difficult to distinguish the fair value your spouse is entitled to without the assistance of a mediator, attorney, or objective appraiser.

A Prenuptial or Postnuptial Agreement

If you and your spouse signed a prenuptial or postnuptial agreement, the terms of your divorce may be pre-determined. However, if you or your spouse feels the agreement will result in an unfair outcome, the agreement may be challenged. If this occurs, there may be additional legal expenses and you run the risk of your agreement being invalidated.

Tax Consequences

Depending on which assets are involved and the agreement you reach, there may be significant tax consequences. For example, you may be facing capital gain taxes if you sell your home or tax penalties if you split retirement accounts. Be sure you consider the potential tax consequences when deciding which property you want to retain.

Valuation Disputes

It is not uncommon for married couples to squabble over the value of different assets. If you believe your spouse is undervaluing property, you may be afraid that you will not leave your divorce with a fair settlement. It may be necessary to bring in specialists who can accurately determine the value of your property.

An experienced equitable distribution mediator or attorney can help guide you through the process of negotiating a fair settlement while considering these important issues.

How a Negotiated Property Settlement Agreement Works for You

Whether you reach a property settlement agreement through mediation or with the help of an experienced equitable distribution attorney, a negotiated property settlement agreement will likely better serve your interests than taking your case to court.

Negotiated property settlement agreements offer:

Voluntary Participation

Mediation is a voluntary process. You do not have to agree on any terms that you are not satisfied with. You can negotiate a fair outcome and know the terms before signing the agreement, so you can avoid surprises.

Creative Solutions

Mediation offers you the ability to reach solutions that are perfect for your particular situation, including arrangements that the court could not have come up with. For example, you and your spouse may agree that you should remain in the marital home while your children are minors and then you will sell the home. Or, you might agree to rent out the home and split the rental income. You may agree to keep all of one asset while your spouse keeps another instead of splitting up each individual asset. This gives you greater flexibility and ability to tailor solutions for your particular situation.

Cooperation

Mediation relies on cooperation between you and your spouse. A mediator will emphasize the importance of being respectful during the process. This can cut down on devious tactics like your spouse trying to hide assets. You and your spouse may give each other full disclosure of your finances in order to reach an agreement that suits both of your needs.

Minimization of Expenses

Because you and your spouse are working together, you can minimize expenses. You can split the cost of mediation. You can also avoid unnecessary legal and discovery expenses.

Ability to Consult Experts

You and your spouse can agree to accept the opinion of outside experts, such as valuation experts, accountants, financial advisors, counselors, and others. This can help you reach a fair outcome while also being advised by experts who are looking out for your best interests.

Contact an Experienced Equitable Distribution Attorney and Mediator

Contact the Law Office of Andrew R. Fischer, Monmouth county divorce attorney , today to schedule a free consultation. I serve couples and individual clients throughout central New Jersey, and I will work personally with you and your spouse to demystify the process and make equitable distribution work for both parties.