Classifying and Dividing Marital Property in a New Jersey Divorce

Like some other jurisdictions, New Jersey is an equitable distribution state. Upon divorce, the marital estate, including both assets and debts, must be divided equitably between the parties. That’s not necessarily the same thing as an equal division. In fact, there is a presumption in New Jersey law that the divorce must not be an unfair financial burden for either party.

So, in most cases, divorce property division requires much more than a calculator. That’s especially true if the parties did not have a premarital agreement and the marriage lasted longer than a few years. In these situations, a Somerville equitable distribution attorney is critical. There is often no other way to guarantee that the final divorce order respects your legal and financial rights.

Property Classification

The basic divorce property classification rule is that all property acquired before the marriage, by gift or inheritance is non-marital property, so long as the property has not been commingled with joint assets. Everything else is marital property which is subject to an equitable division. These principles seem clear, but disputes often arise.

Assume Husband acquired a classic car from a junkyard a few months before the marriage. At that point, the car was little more than a shell. Over the next few years, Husband and Wife restored the car together, largely thanks to a gift from Wife’s parents. At the time of divorce, the car is almost in factory condition and quite valuable.

Concepts like transmutation and commingling apply in disputes like this one. Transmutation changes the characterization of property. Commingling is the mixing of marital and non-marital property.

Therefore, depending on the specific facts, mostly the size of the financial gift, the car could be Husband’s non-marital property, Wife’s non-marital property, or marital property subject to division.

Property Division

Classification matters are often quite complex. That’s especially true with regard to revenue-producing property, like an apartment building. So, attorneys often partner with forensic accountants and other such professionals during this part of the process.

Additionally, property classification is only half the battle. Once attorneys properly classify marital property, that property must be divided equitably. As mentioned, such a division is usually not straightforward. Some factors to consider include:

• Each Spouse’s Earning Potential: As a general rule, young people who are healthy and well-educated have greater earning potential in future years than older people who are not in good health and poorly educated. If there is a significant discrepancy between the spouses in any of these areas, a disproportionate distribution might be in order.
• Noneconomic Contributions to the Marriage: In most cases, the “homemaker factor” is either extremely large or almost insignificant. An unequal division may be appropriate if one spouse gave up career advancement opportunities in order to become a full-time caregiver. Such situations are rather common.
• Agreements between the Parties: Judges generally approve most settlement agreements, if they are entered into voluntarily and without coercion. Additionally, most judges enforce premarital agreements, if the agreements meet the statutory factors. Since most divorce cases settle out of court, this factor might be one of the most important property division factors.

Reach Out to a Diligent Attorney

Property division disputes are often quite complex. For a confidential consultation with an experienced New Jersey divorce lawyer, contact Katherine K. Wagner, Attorney at Law. We routinely handle matters in Somerset County and nearby jurisdictions.