Property Division and Divorce: What’s Worth Fighting For?
There are many issues that can arise during your divorce, such as custody of your children, spousal support or parenting time. But, most divorcing couples also face questions about dividing up marital property in their divorce. What is fair way to divide what you have acquired? What is “pre-marital” property? What about the marital home?
With regard to marital property division (and debt division, too), in a divorce, New Jersey is what we call an “equitable distribution” state. Equitable distribution means that New Jersey courts will divide property between divorcing spouses equitably. It is important to note that equitable does not necessarily mean equal; equitable means fair. In other words, judges will look at all circumstances relating to property, such as when it was obtained and who contributed to the asset, and then divide it fairly, based upon those factors.
For example, if the two of you moved into a house that your spouse purchased before you got married, the court will acknowledge that that property is pre-marital and usually not subject to division in a divorce. However, if there was a mortgage on the house and only you paid that mortgage for the last ten years, the court will absolutely take into consideration your financial contribution to that property when looking at how to divide it in the divorce. Courts have been known to take into account “sweat equity,” as well, meaning crediting spouses for actual work that they put into the property themselves.
It is important to know that names on a title to a property do not necessarily dictate to whom the property will go. If the two of you purchased a car during the marriage, but only your name is on the title, that does not automatically mean that the car goes to you in a divorce. Likewise, if only your spouse’s name is on the deed to the marital home, that does not indicate that only your spouse can make a claim to the property. All property gotten during the marriage is first analyzed as marital or separate property that can be divided during a divorce. Once that is established, courts will begin the analysis of how to fairly divide based upon the factors we discussed earlier.
Pensions and other retirement accounts are a special breed of property when it comes to equitable distribution. The way New Jersey law generally reads is that any money (including employer contributions and reinvestments) put into a retirement account during the period of your marriage is subject to equitable distribution. A spouse can be awarded up to one-half of the money put into a retirement fund beginning on the date of the marriage through the filling of the complaint for divorce. If the spouse is awarded a part of their exes’ pension, depending on the plan, they can receive a cash payout with possible tax penalty or they can roll the account into their own plan. They can also be forced to wait for payment until the ex retires. Laws in this area can get tricky, so be sure to consult with a divorce professional regarding your exact plan.
What about the marital home? Many spouses feel emotionally attached to the family home, especially if they have children. Of course, your house could be subject to division in a divorce and you could be entitled to a portion of the home. Many spouses agree that one stays in the home and buys out the other spouse, paying them cash for what their share of the property would be. But, consider that you must then maintain all the monthly expenses by yourself, including property taxes and any existing mortgage. Get an appraisal of the property to make an informed decision about whether you can and should stay in the marital home.
In the end, be sure to evaluate what you can and cannot live without when deciding what is most important for you to have after the divorce. Perhaps waiving your right to your spouses pension in exchange for a bigger percentage of the sale price of the house makes more financial sense for you at this time. Do not feel pressured or bullied into giving up any property that you may be entitled to in the divorce. Rely on your divorce attorney to advocate for you if you cannot.
If you are considering filing for divorce and wish to learn more about your rights and entitlements, please contact us today to schedule your initial consultation with one of our knowledgeable and caring divorce and family law attorneys.
Who Gets the House in Your Divorce?