If you’re considering divorce or currently in the process of one in New Jersey, you should be aware of the different arrangements regarding how assets and debts get distributed upon dissolution. Equitable distribution is an important legal theory that makes it possible for both spouses to receive a fair share of marital assets, and that’s why it’s often the end goal for many couples who are divorcing.
What is equitable distribution?
Equitable distribution is the idea that in a divorce, all assets and debts accrued during the marriage should get divided fairly between both parties. This can include property, such as real estate and cars, and financial accounts, like savings or checking balances. It also includes things like pensions, retirement plans and any debt accumulated by both parties during the marriage.
Factors that go into equitable distribution in New Jersey
There are several factors that courts consider when deciding what is equitable and how assets and debts should get distributed. These can include:
- The financial needs of each party
- The length of the marriage
- Contributions to the marital estate, including homemaking and child care services provided by one spouse for another during the course of a lengthy marriage
- The value of the separate property, such as inheritance or gifts received during the marriage
When the court takes these and other factors into account, it comes up with a fair division of assets and debts. As an example, say a couple in a 12-year-long marriage has a net worth of $500,000. The wife stays home and takes care of the children while the husband works to support the family. In this case, she may receive half of their assets once they get divorced because she contributed to the marital estate during the course of the marriage even if she earned a much lower income.
Ultimately, in a divorce situation, equitable distribution is important to ensure that both parties get treated fairly and get a reasonable share of the marital estate. Remember that it’s up to the court to make the final decision on what equitable distribution means in your situation and how assets should get divided.