Those considering or currently going through a divorce are wise to prepare for a thorough process. State law generally requires both parties to list all assets for consideration during the property division portion of the divorce. But what happens to those assets? Is there any way to protect those that are most valuable to you?
The answer can vary by state because family law matters are generally governed by state, not federal, law. In New Jersey, the court will attempt to find a resolution that includes a fair and reasonable split of marital assets. Those who are looking to protect a particular asset, like a business, can take steps to help better ensure they retain full ownership. Before discussing those steps, it is essential to understand the following basics.
What are marital assets?
The state generally puts all assets into two categories: marital or separate. Courts will likely consider any asset attained during the marriage as a marital asset subject to division during divorce. In contrast, those that either party owned before the marriage or received through an inheritance or gift during the marriage may classify as separate property.
Separate property is generally not subject to division during the divorce process.
The court may classify a business started before the marriage or gained through inheritance or gift as separate property. However, it could still consider any growth during the marriage as a marital asset. If so, the value of that growth could be part of the court’s consideration when dividing marital assets.
How does the court determine what is fair and reasonable?
New Jersey courts use the legal concept of equitable distribution to split the assets during divorce. They can use a variety of factors to make sure the split is fair, including the length of the marriage, the age of the parties, each individual’s income, the standard of living during the marriage and other factors that could impact the economic circumstances of each individual after the divorce is finalized.
What steps can I take to protect a specific asset?
If the court considers the asset marital property subject to division, the following can help:
- Negotiate. Divorce does not always lead to a courtroom battle. Another option is mediation. Mediation uses a neutral third party to help guide negotiations, giving both parties more control over the divorce. Those that want to protect an asset can negotiate this into the divorce during mediation.
- Offer. This option is helpful during mediation or litigation. Be prepared to offer up another asset of similar value to the business in exchange for keeping full ownership.
These are just some of the more common strategies to consider in this situation. An attorney experienced in New Jersey property division can review your specific case and discuss the best strategy to help better ensure you finalize the divorce with a settlement agreement that meets your needs.