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Equitable Distribution, Dividing Assets in a New Jersey Divorce Case and Getting Alimony in NJ

How are assets divided in the State of New Jersey during a divorce case is a question most divorce attorneys hear from their clients and prospective clients and initially it is mostly answered the same way, it depends. New Jersey is not a community property state and dividing assets in a divorce in New Jersey are guided by the Equitable Distribution Statute under N.J.S.A. 2A:34-23. The factors that I will lay out below are sometimes ignored or forgotten when litigated in court so it is very important to work with a skilled divorce attorney and not an amateur.

So what does it depend on? The following are the factors outlined in the statute:

a. The duration of the marriage.

b. The age and physical and emotional health of the parties.

c. The income of property brought to the marriage by each part.

d. The standard of living established during the marriage.

e. Any written agreement made by the parties before or during the marriage concerning an arrangement of property distribution.

f. The economic circumstances of each party at the time the division of property becomes effective.

g. The income and earning capacity of each party, including education background, training, employment skills, work experience, length of absence from the job market, custodial responsibilities for children, and the time and expense necessary to acquire sufficient education or training to enable the party to become self-supporting at a standard of living reasonable comparable to that enjoyed during the marriage.

h. The contribution by each party to the education, training or earning power of the other.

I. The contribution of each party to the acquisition, dissipation, preservation, depreciation or appreciation in the amount or value of the marital, as well as the contribution of a party as a homemaker.

j. The tax consequences of the proposed distribution to each party.

k. The present value of the property.

l. The need of a parent who has physical custody of a child to own or occupy the marital residence and to use or own the household effects.

m. The debts and liability of the parties.

n. The need for creation now, or in the future, of a trust fund to secure reasonably foreseeable medical or educational costs for a spouse or children; and

o. Any other factors which the court may deem relevant.

Under item (I) the contribution by each party to the acquisition of the asset is extremely important and is often overlooked or underminded by the “comingling” of asset argument which in my opinion is absurd especially in short term marriages. The good news for people that actually invested or in other words, contributed to a marital asset, a well respected family court judge in Essex County recently ruled that the party who contributed the money into the marital home should get that money back first before any other money is split from the marital asset. The comingling argument was shot down like a communist at a Richard Nixon Rally.

Another question that is often posed to attorneys is: What if we both want the house? In many divorce cases, there are two parties that BOTH want a certain asset and that asset cannot be divided without ruining it (think of splitting a bike in half, yes you both got some of it but now it does not work, congrats!). In the case of a house, if the parties are not married that long, a judge could rule to simply sell the house and divide any net proceeds or net shortfall. If the parties have lived in the home for a substantial amount of time and the children go to school in that community and are comfortable there, there is a good chance the judge will have the one party who seeks to stay there, buy the other party out or arrange it accordingly in another way (maybe by receiving less alimony or child support until that parties share has been paid, etc). There are many ways to peel an apple but in the end as long as the apple has been peeled the result is the same. (I don’t like the skin the cat analogy even though I am a dog lover). I could spend more time on dividing assets but I will save that for another day.

The next question I tend to hear from potential clients is: how do I get alimony or do I have to pay alimony? Alimony in New Jersey, like many other states, is intended to keep the dependent spouse living a similar life as he or she was accustomed to while married and/or to help the dependent spouse so that he or she is no longer dependent on the former spouse. Unlike child support where there are guidelines that are in place to calculate an exact amount, alimony does not have a simple calculation to determine such. Every case is very different. In a case where the wife earned $300,000 and the husband earned $50,000 but the parties lived a frugal lifestyle, the alimony was very low. In another case where the wife earned $225,000 and the husband earned $75,000, the alimony award was much higher because the lifestyle the latter parties enjoyed was one that included frequenting the best restaurants in New York and New Jersey, four vacations per year, four cars, two homes and the like. Now unlike child support, alimony is not automatic, a case must be made for alimony. In child support, if a person has a child, the non-custodial parent needs to support that child no matter what. “I didn’t want to have a child” is NO excuse. Its actually absurd. So while receiving alimony is not automatic, a person can opt to receive a larger portion of the assets instead of the stream of alimony. Remember, there are many ways to peel that apple.