Clients often ask whether their spouse will "get half" of everything in a divorce. It seems to be the biggest fear; that everything they have worked for, will be "given" to their spouse upon divorce. It is hard to answer that question; obviously I do not want to scare or upset my client, but the fact of the matter is, New Jersey is an equitable distribution state. But what exactly does that mean?
Equitable Distribution is a means of ensuring that each spouse will maintain a similar standard of living after the divorce as they did during the marriage. When couples marry, most believe in the fairy tale: "'Til death do us part". But when the fairy tale ends, the reality of what was promised in the vows, (and what the law in New Jersey mandates), can be upsetting and frustrating, or a huge relief - depending in which role you find yourself.
Bank accounts, houses, land, pensions, retirement plans, life insurance, jewelry, cars, antiques, and anything else of value can be subject to equitable distribution. There are certain exceptions, the most common of which is an item that was acquired prior to the marriage, but generally, any asset acquired during the marriage, or which actively increased in value during the marriage will be put into the "pool" of resources to be divided. Bank accounts are easy to value... if the balance is $1,000, each spouse will probably receive $500. Pensions and retirement accounts are more complex and require the use of an accountant with special expertise in evaluating those types of assets and determining the amount to which the other spouse is entitled. Typically, each spouse would be entitled to half of the determined value. If the owner or member of the plan started contributing prior to the marriage, those funds would be excluded; it is only the funds that were added to the account during the marriage that are subject to equitable distribution.
It is not just assets that get divided; marital debt is also subject to equitable distribution. Mortgages, loans, and credit card debt are all examples of debt that must be allocated.
There are many ways to settle a divorce. Parties can agree that one spouse will take responsibility for a certain debt, but also have the benefit of a certain asset. It is only the most contentious of divorces that result in a trial and a true liquidation of assets to divide down the middle.
For more information, I can be reached at 609-601-6612 or spedrick@youngbloodlegal.com. Check out my professional Facebook page too! I look forward to working on your behalf. Have a great week!
Stephanie Pedrick
