Divorce is never easy, and it's made more complicated when you have high-worth assets. Even in an amicable New Jersey divorce, parties may have a difficult time determining how their assets should be split. Of course, when the divorce is contentious, the process of divvying up assets can seem downright impossible.
Splitting assets in a divorce is tricky, and you should always work with an experienced NJ divorce attorney when your marriage comes to an end. Even if you don't foresee any disagreements about how property should be split, you need to have an advocate on your side. Too often, parties think they'll be able to move through the divorce without much contention, but those good intentions can vanish in the blink of an eye. If you don't work to protect your assets early on, you could end up financially devastated.
Asset Division in a New Jersey Divorce
It's important to understand how assets are split up in a divorce in New Jersey. Every state has different laws pertaining to the way parties are allocated assets after the dissolution of their marriage. Under New Jersey law, the court must equitably divide assets acquired during the marriage. “Equitably” does not mean a 50/50 split, however, and the following factors will impact who gets what:
- How long the marriage lasted
- Who made the most money
- The age of each spouse
- The standard of living in the marriage
- Whether there are prenuptial or postnuptial agreements
- Whether one spouse has more education than the other
- Whether one spouse has been out of the workforce for a long time
- Whether there are children, and who has been the primary caretaker
The list above is not exhaustive, and the court may look to any number of circumstances in determining what makes the division of property equitable during a divorce.
If divorce is on your horizon, you're probably wondering what assets will be automatically protected from division, and whether you can do anything to protect other assets during a divorce. Ultimately, marital property will be divided while separate property will be allocated to whichever spouse owned that property. Distinguishing between these two types of properties can be difficult, and often, separate property can be inadvertently converted to marital property if you aren't careful.
Protecting Assets During a Divorce
The best way to protect assets from divorce is to enter into a prenuptial or postnuptial agreement. These agreements are legally binding contracts that spell out how your property will be divided if the marriage ends. While they're often taboo topics, marital agreements save time and money in the long run. Ultimately, it's better to have it and not need it than to need it and not have it.
If you're going through a divorce and you don't have a marital agreement to dictate how your assets will be split, then you'll want to take steps to protect your separate assets from being categorized as marital property subject to equitable distribution.
Splitting retirement accounts in a divorce isn't as easy as splitting the contents of a checking account. Often, retirement accounts aren't yet matured by the time the marriage ends. When this is the case, the court and lawyers must employ sophisticated calculations in determining what's fair under equitable distribution in New Jersey.
You may be able to protect your retirement accounts through a demonstration of need based on the equitable distribution. For example, the court should consider whether you're closer to retirement than your former spouse. Additionally, you may be able to offset their entitlement to your retirement account by other some other concession.
Real estate acquired during the course of the marriage is generally subject to equitable distribution. There are two scenarios in which real estate could be protected from divorce distribution, though. First, if the real estate was acquired before marriage, then it is separate property. Second, if you inherited real estate from one of your family members, then this is also separate property in most circumstances.
Real estate acquired as separate property can be converted into marital property if you gift it to your spouse or add their name to the title. To maintain it as separate property, you must not comingle the asset.
Outside of a prenup, the best way to protect your assets from divorce in New Jersey is to avoid converting your separate assets into marital assets. This may look like keeping real estate titled in only your name or never commingling funds from an inheritance account. If you end up having to play defense with your asset protection, you should utilize all documentation and evidence possible to demonstrate to the court that your distribution would be equitable if the assets were distributed to you instead of split.
Never Hide Assets During a Divorce
While it may be tempting to try and hide assets from the NJ court during your divorce, doing so is ill-advised. New Jersey law requires a disclosure of all liabilities and assets, and divorce attorneys are well-equipped in finding hidden assets. Hiding assets during a divorce is illegal and could land you with jail time, fines, forfeiture of assets, or all of the above.
When to Talk to a Divorce Attorney
If you suspect your marriage is coming to an end, you should go ahead and speak with a New Jersey divorce attorney who can best advise you in moving forward. Ending a marriage is emotional, but it also requires a sophisticated understanding of how to account for and split assets. Attorney Joseph D. Lento brings dedicated experience to his divorce clients. From advocacy to negotiation to a nuanced understanding of the divorce process, Mr. Lento can help you through this difficult time. To learn how the Lento Law Firm can help you, contact us online, or call 888-535-3686 today.