What is equitable distribution?

On Behalf of | Apr 13, 2020 | Property Division |

When you seek a divorce, you and your spouse must decide how to split your joint possessions. After you appraise the value of any property, assets and business interests acquired during the marriage, the court determines how to split this marital property reasonably between you.

This process is equitable distribution. All marital property is subject to fair division between you and your spouse.

Defining marital property

New Jersey’s definition of marital property includes all assets acquired during your marriage. Homes and land, businesses and investments, and even your retirement fund could be part of your marital property, subject to equitable distribution.

Anything you established or acquired before the marriage, however, is not part of your marital property. For example, if you have a thriving, successful business you started long before your wedding, it is separate property and is not subject to equitable distribution.

Equitable distribution factors

There are still a few states that consider a couple’s assets as community property and jointly owned by both parties, therefore subject to an even 50/50 split. However, New Jersey is not one of them. Instead, the courts divide property and assets in a reasonable way that benefits each party equitably. The judge considers multiple factors when distributing property between you and your spouse, including:

  • Income and economic circumstances
  • The couple’s standard of living
  • Debts and liabilities
  • Each party’s earning capacity
  • Contributions to marital property

The courts deem the efforts of a stay-at-home spouse to be a contribution to marital property. If you or your spouse is a homemaker, the judge takes this into account when dividing key assets like your home.