Monmouth County Divorce Lawyers
Equitable Distribution and Post-Divorce Finances
The emotional ramifications of a divorce are often first and foremost in the minds of an estranged couple. However thoughts can turn quickly to the financial fallout of a failed marriage. States like California and Texas do not strive to answer the question of what is fair, and instead divide assets equally regardless of how much – or how little – a spouse contributed to their marriage. New Jersey and many other states employ equitable distribution, however, which occurs when a judge orders the division of assets and obligations in a manner which is more reflective of the contributions and needs of both parties.
Estranged spouses should make no assumption that the distribution will be equitable without considerable effort on their part. The painstaking process of equitable distribution requires divorcing couples to fiercely advocate for what they believe they are entitled to. An experienced Monmouth County divorce lawyer can ease that burden considerably, leaving clients financially secure and ready to begin the next chapter of their lives.
In New Jersey, equitable distribution of property is decided pursuant to N.J.S.A. 2A:34-23.1, which sets forth 16 criteria to be considered:
- Age and health of both spouses: Older spouses or those who suffer from illness may need additional support in an equitable distribution to compensate for their inability to work.
- Child custody: When a parent who will retain primary physical custody of any shared minor children will stay in the marital residence for the sake of those same children, the non-custodial parent must still be compensated for the loss of their share of the home.
- Contributions by both spouses to marital property: When a couple clearly co-owns property – such as when both names appear on the deed of a home, both contribute to a down payment or both contribute to monthly mortgage payments –they are equally entitled to any proceeds from the sale of the home. If one spouse expresses their intent to remain in the home post-divorce, they must provide their ex-husband or wife with half of the home’s assessed value. In other circumstances, when one spouse contributes more or less to marital property, it may be necessary to determine how much was contributed by whom.
- Contributions by one spouse to the career of another: When a husband or wife helps pay for schooling or works in order to keep a family financially afloat while his or her spouse completes their training – and their spouse goes on to be primary breadwinner – they may be entitled to a greater share of family assets.
- Debts and liabilities: An equitable distribution must assess credit card balances, unpaid automobile loans and any other recurring debt that is incurred during the course of a marriage.
- Deferred career goals: When one spouse leaves the workforce to care for young children or to serve as a full-time homemaker, their sacrifice is compensable.
- Economic circumstances: The financial state for a couple at the time of their separation will be closely scrutinized. Wherein one party is considerably more financially secure than another due to a more profitable career, courts are unlikely to leave the less financially secure spouse without adequate support.
- Income and earning capacity: Although one spouse may leave the workforce during the course of a marriage to serve as a stay-at-home parent or full-time homemaker, a judge will assess that spouse’s ability to return to work. Additionally, if a spouse has never worked or cannot return to their former profession due to a prolonged absence, the cost of re-training for a new profession can be factored into an equitable distribution analysis.
- Marriage duration: A short union will generally carry less weight than a decades-old marriage.
- Miscellaneous factors: A court can consider any other factor, unique to each divorcing couple, which the court deems relevant.
- Property and income: A home which was purchased prior to a marriage will generally remain the property of the original owner. Similarly, absent an agreement to the contrary, a spouse of high net worth prior to marriage is entitled to retain his or her pre-marriage savings in the event of a divorce. Properties and income acquired and earned by both spouses during a marriage will be distributed equally.
- Property value: A professional appraisal must be conducted to determine the actual market value of a marital home. Other property, such as jewelry, artwork or automobiles that are owned outright must also be appraised.
- Standard of living: A non-working spouse or a spouse who earns considerably less may still be entitled to receive spousal support that ensures the same level of comfort that he or she enjoyed while married.
- Tax consequences: A judge must factor in the potential implications of an equitable distribution for both parties.
- Trust funds: The responsibility for financing a large future expense, such as college tuition for any shared children, can be established during equitable distribution with the establishment of a trust fund.
- Written agreements: Prenuptial and postnuptial agreements may specify who is entitled to which assets in the event of a divorce. Courts will generally enforce such agreements unless it is determined that the agreement was entered into under duress or through deception.
As the above factors makes clear, equitable distribution is a complex inquiry that will require intense scrutiny of marital finances – past, present and future. Retirement accounts, life insurance policies, credit card balances, property values and other finances and assets must all be assessed before a court can determine what is fair and just.
Monmouth County Divorce Lawyers at Fox & Melofchik, L.L.C. Provide Equitable Distribution Advocacy
No matter how amicable a divorce, estranged spouses should always seek legal representation during division of property and equitable distribution. Monmouth County divorce lawyers at Fox & Melofchik, L.L.C. fiercely advocate for the financial interests of their clients. Contact us online, or call (732) 493-9400 to schedule a free consultation at our Eatontown, New Jersey offices, where we serve clients in Monmouth County, Middlesex County, Mercer County and the New Jersey towns of Colts Neck, Rumson, Deal, Monmouth Beach, Ocean Township, Little Silver and Holmdel.