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Distribution of Marital Property

Marriage is an economic contract and economic partnership. Everything you and your spouse buy or acquire during the marriage is legally owned by the two of you and is marital property. It makes no difference in whose name you buy or acquire an asset. It does not matter whose money was used to purchase the asset.

Most states have equitable distribution laws. The only exceptions, as of this writing are Idaho, California, Nevada, Arizona, New Mexico, Texas, Louisiana and Washington State which have community property laws. Laws are constantly being changed and updated so consult your attorney to confirm the law in your state. In community property states, property distribution is a 50/50 split. In equitable distribution states the Court determines a fair, reasonable and equitable distribution which may be more than or less than 50% of any asset to either party.

The equitable distribution law in New Jersey is similar to most equitable distribution states. New Jersey law directs the Court to consider fifteen factors in determining what is an equitable, fair and just division of assets. They are:

  • The duration of the marriage;
  • The age and physical and emotional health of the parties;
  • The income or property brought to the marriage by each party;
  • The standard of living established during the marriage;
  • Any written agreement made by the parties before or during the marriage concerning an arrangement of property distribution;
  • The economic circumstances of each party at the time the division of property becomes effective;
  • The income and earning capacity of each party including education background, training, employment skills, work experience, length of absence from the job market, custodial responsibilities for children, and the time and expense necessary to acquire sufficient education or training to enable the party to become self-supporting at a standard of living reasonably comparable to that enjoyed during the marriage;
  • The contribution by each party to the education, training or earning power of the other;
  • The contribution of each party to the acquisition, dissipation, preservation, depreciation or appreciation in the amount or value of the marital property, as well as the contribution of a party as a homemaker;
  • The tax consequences of the proposed distribution to each party;
  • The present value of the property;
  • The need of a parent who has physical custody of a child to own or occupy the marital residence and to use or own the household effects;
  • The debts and liabilities of the parties;
  • The need for creation, now or in the future, of a trust fund to secure reasonably foreseeable medical or educational costs for a spouse or children; and
  • Any other factors which the court may deem relevant.

Based on these factors the Court can award a wife anywhere from zero to 100% of each marital asset and the same for the husband. Most of the time the Court awards anywhere from 40% to 60%.

The only exceptions are the following property if kept separate:

  • Inherited property - This is real estate or money or any other property inherited through a will or through inheritance laws of the state.
  • Property acquired prior to marriage - Ask was the asset acquired from the date of marriage to the date of filing of the Complaint for Divorce.
  • Gifts to you by a third person - Gifts from one spouse to another are marital assets.
  • Gifts to your husband by a third person.
  • If an asset was acquired prior to the marriage, and there is an increase in value due to direct action or work by the other partner, the increase in value may be a martial asset but not the asset itself.

Marital Assets

The Court will order equitable distribution of all property acquired during the marriage. What are some of the assets commonly distributed?

  • Real Estate.
  • Automobiles and other vehicles.
  • Stocks, Bonds, Cash & Savings Accounts.
  • Individual Retirement Accounts, Pension Plans, 401K's and other funds set aside for retirement.
  • Cash value of Life Insurance Policies.
  • Furniture and fixtures in all houses.
  • Business owned by one or both spouses.

Marital Liabilities

The Court not only orders equitable distribution of marital property but also marital liabilities and debt. What is marital debt?

  • The mortgage balance on your home.
  • Any debts you owe to banks, savings and loan association, or any lending institutions.
  • Car loans, school loans (if not premarital), home improvement loans, any money you borrowed during the marriage and have not paid back in full (remember, it does not make any difference who signed the loan papers).
  • Loans payable to relatives or friends.
  • Unpaid bills at the time of the hearing (department stores, credit cards, doctors, dentists, etc.)

Equitable Distribution - Important Points to Remember
  • Equitable Distribution is not automatically a 50/50 split.
  • Title does not count. It does not matter whose name the asset is in.
  • Every asset acquired from the date of marriage to the filing of the Divorce Complaint is subject to equitable distribution. (In New Jersey and a few other states a premarital asset may be subject to equitable distribution if acquired "in contemplation of marriage.")
  • Assets for Distribution can include:
    • Retirement benefits through employment.
    • Businesses or professional practices started during the marriage.
  • It is your obligation to prove the existence of marital assets. The judge will not do it for you. Your husband may try to hide marital assets from you.
  • Assets which your husband dissipated may still be subject to equitable distribution. Example: you tell your husband you are going to see a lawyer. He goes to the bank and takes out $5,000.00 from the savings account. He later says he "lost track of it" or "doesn't know where he spent it." The Court may consider the $5,000.00 he spent as his share of assets and award you $5,000.00 from the remaining assets.


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