Marital Property | Separate Property NJ Property Division Attorneys
Marital Assets vs. Separate Property
When you choose to divorce in the State of New Jersey, you will need to know which of your assets are deemed to be "marital" property and thus subject to property division. Contrary to popular belief, not every asset is subjected to property division and many assets are actually considered to be "separate" property. In some situations, even assets that were acquired during the course of your marriage can be exempt from distribution, and as such, your spouse may not receive any claim or interest in the asset during your divorce.
It is important to understand exactly what is included in the distribution at the time of an NJ divorce—and what is not included. Many people mistakenly believe that if their name is the only name listed on a bank or retirement account, then the other spouse automatically has no right to share in it; however, this is not necessarily true, as illustrated by the example below:
You were married on September 1, 2000.
Prior to your marriage, you started to contribute to your 401K plan on January 1, 1995.
You contributed to your 401K from every paycheck up to and even after the filing of the Complaint for Divorce on July 15, 2007.
Your spouse does not have a 401K plan.
Only your name has been listed on your 401K account.
No money has ever been removed from the account.
According to this example, your spouse is entitled to an equitable distribution (probably 50%) of the marital portion of your NJ 401K that was accumulated from the date of the marriage to the date of the filing of the Complaint for divorce. (In this situation it would be from September 1, 2000 through July 15, 2007). Your pre-marital share of the 401K, the money contributed before the date of marriage plus appreciation/interest accrued on that amount, is your separate property. Additionally, your post marital share of the 401K, the money contributed after the date of the filing for complaint for divorce is also your separate property. Therefore, your NJ spouse has no right to share in the pre and post contribution portions of your 401K.
Typically, your New Jersey spouse's marital share of your 401K will be transferred directly from your 401K into an IRA account exclusively in your spouse's name. While this eliminates any tax penalties because it is incident to a New Jersey divorce, a Qualified Domestic Relations Order may be necessary in order to effectuate this transaction. Please keep in mind that there are nuances involved with which a seasoned family law attorney will assist you.
Be Prepared and Get Educated on New Jersey Divorce Asset Division
This example is merely one of the many different scenarios you may encounter during your NJ divorce process; therefore, it is important to have a knowledgeable NJ property division attorney on your side. Since each scenario has various considerations and implications, the veteran New Jersey property division attorneys at Weinberger Divorce & Family Law Group, LLC will need to evaluate your situation closely to determine all of your legal options. Proper evaluation, preparation, and education of marital property vs. separate property, are the best ways to protect your assets and your rights during a New Jersey divorce.
Understanding New Jersey Law: Equitable Distribution of Property Factors
In making an equitable distribution of property, the court shall consider, but not be limited to, the following factors:
- The duration of the marriage;
- The age and physical and emotional health of the parties;
- The income or property brought to the marriage by each party;
- The standard of living established during the marriage;
- Any written agreement made by the parties before or during the marriage concerning an arrangement of property distribution;
- The economic circumstances of each party at the time the division of property becomes effective;
- The income and earning capacity of each party, including educational 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 reasonably comparable to that enjoyed during the marriage;
- The contribution by each party to the education, training or earning power of the other;
- The contribution of each party to the acquisition, dissipation, preservation, depreciation or appreciation in the amount or value of the marital property, as well as the contribution of a party as a homemaker;
- The tax consequences of the proposed distribution to each party;
- The present value of the property;
- 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;
- The debts and liabilities of the parties;
- 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;
- The extent to which a party deferred achieving their career goals; and
- Any other factors which the court may deem relevant.
In every case, the court shall make specific findings of fact on the evidence relevant to all issues pertaining to asset eligibility or ineligibility, asset valuation, and equitable distribution, including specifically, but not limited to, the factors set forth in this section. It shall be a rebuttable presumption that each party made a substantial financial or non-financial contribution to the acquisition of income and property while the party was married.
Protect your NJ assets today by contacting the experienced New Jersey property division attorneys at Weinberger Divorce & Family Law Group, LLC to schedule your consultation.