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Asset distribution

Equitable vs. Equal: What’s the Difference In A New Jersey Divorce?

If you’re a married couple divorcing in New Jersey, you will come across the terms equitable and equal. These terms will be very important when it comes to asset distribution of marital property. Many spouses assume that these two terms mean the same thing. But that’s not the case. Find out the difference between equitable and equal and, most importantly, why it matters.

Different Types of Assets

During the divorce process, spouses’ assets are divided properly. Assets are usually categorized into two groups:

  • Separate property. These are the assets that each spouse had before the marriage. These assets are usually protected from division.
  • Marital property. These are the assets that the spouses acquired during the marriage. Assets like the family home, businesses, and bank accounts are subject to division.

The courts refer to marital property as “community” property. When an asset is considered community property, that means that both spouses own the asset equally. Once each asset has been categorized as separate or marital, the courts will divide the asset based on equitable distribution.

What is Equitable Distribution?

One of the biggest misconceptions about “equitable” is that it means equal. In an equitable distribution, the assets are divided based on “fairness.” What does “fairness” mean? Fairness can mean whatever the courts deem fair. It does not always mean a truly equal distribution, which is 50/50.

For example, you and your spouse may have difficulty dividing the family home. The courts may decide that one spouse can continue to live in the family home while the spouse who has to move is paid the difference in cash. In the eyes of the courts, this would be considered a fair asset split.

How is Fairness Established in an Equitable Distribution?

New Jersey is an equitable distribution state. That means that all New Jersey family courts follow equitable distribution guidelines in a divorce. This doesn’t always mean that the courts may not divide your marital assets 50/50. It means that they are not obligated to. They have the right to distribute assets in a manner that they believe is fair. Some of the factors that the courts may consider when determining fairness are:

  • The age and health of each spouse
  • The economic statuses of both spouses
  • The length of the marriage
  • The contributions that each spouse made to the asset
  • The debts of each spouse
  • The economic needs of the children
  • The income that each spouse provided during the marriage

What Factors Are Not Considered in Equitable Distribution?

In addition to these factors, there are some factors that the courts will not consider when distributing assets. These include serious situations like drug abuse, domestic violence, and adultery. As horrible as these circumstances are, the courts may not consider them regarding the division of your marital assets.

But there are occasions where your spouse’s behavior may be considered an equitable distribution. If your spouse’s behavior harms the family’s finances, the courts may consider that and award you more of the asset.

Are There Occasions Where One Spouse Ends Up With More Than 50% of the Asset?

In many equitable distribution divorces, one spouse may acquire more than 50% of a marital asset. Because judges have fair discretion with equitable distribution, so one spouse could end up with more than half of a marital asset based on “fairness.” Even assets where one spouse holds title are not safe. While these assets may be considered separate property, it is not a sole indicator that the asset is separate.

Are There Occasions Where the Separate Property Can Become Marital Property?

There are times when separate property can be categorized as marital property. This may happen if one asset, like a business or a car, is in both spouses’ names. It may also happen when there are blurred lines between ownership.

For example, your spouse may have deposited money from their bank account into the joint bank account. In these cases, the courts may unintentionally consider the separate property community property.

Most Conflicting Asset

For New Jersey couples, there is one asset most couples have a hard time dividing: the family home. The family home can be divided in a couple of ways:

  • Buying out the other spouse. If you want to keep your family home, you may offer to buy out your spouse and put the property in your name. Many couples may be able to do this by refinancing their mortgage loan.
  • Selling the home. If you can’t buy out your spouse, you can agree to sell the house with your spouse and split the proceeds in the divorce.

Depending on the circumstances of your marriage, your spouse may also be awarded cash payments for their contributions to the family home.

For example, the home may be listed under your name, but your spouse used the marital funds from your joint bank account for renovations. In this case, your spouse may be entitled to some of the home’s value.

How a New Jersey Divorce Attorney Can Help

In a divorce, asset division is about more than just what you acquire today. It’s about protecting your future. Because so much is on the line, you don’t want to leave it all to chance. Working with a New Jersey divorce lawyer can help you protect your best interests in the divorce process.

A New Jersey divorce lawyer can assess your assets and explain how equitable distribution applies to each. You may be more likely to protect your assets during and after the divorce.

Fearlessly Fighting For Our Client’s Best Interest

As dedicated family lawyers, we aim to guide our clients to the right path toward emotional and financial resolution at Zeigler Law Group, LLC. Call our office or contact us online today to schedule a free consultation with our award winning legal team. We help clients throughout New Jersey.

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Sonya K, Zeigler, Esq. and her team have a well-earned reputation for committed and fierce legal representation. Our firm is here to provide you with the best possible guidance. Call Zeigler Law Group, LLC, at 732-361-4827 or contact us online to schedule a free consultation. Located in Tom’s River, Red Bank, Princeton, and Mount Laurel, New Jersey, we serve clients throughout the surrounding areas.

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