Marital property and separate property need to be categorized before the division of assets takes place for divorce proceedings. These assets and possessions are categorized based on when they were acquired. Separate property was acquired by an individual spouse before they got married. Marital property refers to assets that are acquired after the marriage is official. Assets that were acquired prior to the marriage between two individuals are not involved in the equitable distribution. The separate property is just for the individual spouse and is not subject to division. Also, assets that were given as a gift or as part of an inheritance are not included in equitable distribution discussions either. Dividing assets may be sensitive for some couples. This division can happen in mediation or during litigation.
What is equitable distribution?
In the state of New Jersey, equitable distribution is a concept practiced in divorce cases for distributing assets. This is to ensure a fair allocation of marital assets between spouses. Fair does not mean equal though. The distribution of assets may not be equal for each party. The final decision on the distribution is made by a judge after the consideration of many factors. Since high net worth individuals possess more assets, the division of these can require more time. These divorces can be impacted by prenuptial agreements, 401(k) plans, defined benefit pension plans, IRAs, restricted stock or stock options, business ownership, professional licenses, involved tax structures and planning, offshore assets, bonuses that do not vest immediately, real estate holdings and widespread investments. From all these factors, the net worth of an individual or the joint marriage can be evaluated.
What factors contribute to the distribution of assets?
Other than equitable distribution, there are other factors that are considered by judges when distributing assets. These factors include the duration of the marriage, the age of both parties, the health of both parties, the income or property brought to the marriage by each spouse, the established standard of living, any written agreements made before or during the marriage relating to property distribution, economic circumstances of each party, the income and earning capacity of each party and much more.
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