There is no community property in New Jersey. Said differently, the concept of community property is not a recognized legal concept in New Jersey divorce cases. In New Jersey, the division of property amid a divorce falls under principles of equitable distribution. All marital assets get equitably distributed in a New Jersey divorce. Among these assets are houses, retirement funds, property, financial accounts, and debt acquired during the marriage.
Equitable Distribution
One common misunderstanding is that equitable distribution means equal distribution. It does not. Division of assets are addressed on a case-by-case basis. This analysis will determine if an equal distribution is the most equitable and fair. There are many factors that go into the analysis. But basically, the question is when and/or how the asset was acquired and utilized during the marriage.
Marital Home
There is another common misconception in New Jersey divorce law. Many people think that title on property, such as the Deed, solely determines property ownership in New Jersey. Not necessarily true. If both spouses made contributions (financial or otherwise) to the maintenance of the marital residence, both may have an interest in the distribution of the property at the time of divorce.
Marital Debt
Similarly, student or credit card debt in only one spouse’s name can be considered marital debt. Marital debt is also subject to equitable distribution. Relevant factors include the date and reason for the debt and who paid it back during the marriage. However, this is not an exhaustive list of factors for consideration. The treatment of tax debt is the same. Again, the date and reason for tax debt are among factors.
To sum. There is no community property in New Jersey. Rather, New Jersey has a system of equitable distribution – not equal distribution. As such, it does not lead with a 50% split. Rather, it first identifies the marital property and values the same. Then, it determines the most fair and reasonable allocation of assets based upon the facts and circumstances of each individual marriage.
Please call me if you have any questions about this blog, or other family law concerns.