Probably the two areas of divorce that trigger long-lasting conflicts for separating spouses are children and money. Too often they are areas of continuing stress, even after the divorce is finalized.
This article will focus on the second (money) and how property assets and liabilities are divided. First, we’ll clarify the concept of “equitable” divisions and how it applies in New Jersey. We will discover that “fair” does not necessarily mean “equal”, especially in divorce settlements. Then, we’ll touch the surface of how “equitable” is decided. Finally, we’ll reflect on the importance of coming to mutual agreements and consider what happens if you don’t.
There’s a lot more to this topic than splitting everything down the middle. Contact Townsend, Tomaio & Newmark located Bergen County to discuss your concerns and divorce strategy.
“Equitable” Property Division in New Jersey, not “Community”
A few states in the U.S. are “community property” states, but New Jersey is not one of them. To clarify possible misconceptions: community property is everything that a husband and wife own together since the beginning of the marriage, including tangible and intangible properties. Community property also includes all debts and monies owed (liabilities). It’s often perceived as equal (50-50) distribution whereby each spouse gets half.
Most states in the U.S. have “equitable distribution” laws, which is the case in New Jersey. This means that property and debts are divided between the spouses in a manner that is “fair”, but not necessarily “equal”. The idea is that both parties are considered to have joint ownership of all property (both assets and liabilities), but that spouses themselves are not equal. Equitable division is the best attempt to be fair. Without a doubt, there are lots of challenges around equitable property division in a divorce.
The Law Firm of Townsend,Tomaio & Newmark can help you learn more about dividing money during divorce. We’ll also make sure your settlement agreement minimizes tax consequences, avoids penalties and protects your business assets.
Fair ≠ Equal Division of Property & Liabilities in NJ
Agreeing on what’s fair is not easy even when times are peaceful, much less during divorce when anger and resentments tend to be running high. Under these conditions, the meaning of fair is different for everyone. It gets further complicated because deciding what’s fair can justifiably change from issue-to-issue. We’ve facilitated divorce cases where one spouse believes that a 50-50 split of the money in savings is fair, but insists that the spouse needs to assume 75% of the credit card debt. Hummm, that’s probably not going to fly… Moving on.
Equitable property division can be a complex financial matter, especially if there is a business or intangible property involved. In order to get a settlement agreement that’s fair to both spouses, it’s critical to work with an experienced divorce attorney who understand finances and who can advise you about mediator.
How is “equitable” decided in NJ?
Equitable division takes into consideration how long the parties were married, needs of each spouse and the financial contribution of each during the marriage. However, the truth is that all assets and liabilities are not created equally. There is a spectrum of factors which make the ownership of property inherently unequal, such as educational attainment and employ-ability, how much each party earns and spends, the real financial needs of each party, and the age and health of each spouse.
Here’s a tip to keep in mind: Equitable distribution has much more to do with negotiation than it does with laws –unless of course, you fail to negotiate. Then “equitable” becomes something else.
If you and your spouse cannot agree on how to divide your properties, you may find yourselves in a court and in front of a judge. If this happens, it is the judge who will ultimately decide who gets what or how much.
On the surface that may sound all right to you, but pause for a moment and think about it. Take into consideration that when the judge decides, you don’t get a say. The judge divvies things up based on his/her understanding of the divorce case. Under these circumstances, both of you could wind up unhappy and unsatisfied. You are much better off working with your attorney to reach a fair and mutually-agreed-upon divorce settlement.
Offices conveniently located in Bergen and Morris County, Call today for a free consultation about your Divorce
Your lawyers will help you plan a winning settlement strategy based on negotiation. At Townsend, Tomaio & Newmark, we can help you with (or recommend) mediation services.