Skip to Content

Equitable Distribution in Divorce

Jun 29, 2015 | Written by: William W. Goodwin, Jr., Esq. |

Equitable Distribution is a concept that has existed in New Jersey since the early 1970's. It is the term used to describe the process of dividing "marital" assets and liabilities between divorcing couples. The principles supporting Equitable Distribution are very simple: marriage is a partnership or a joint venture. As I often say to new clients, "when you and your spouse got married, you formed a business."

Determining Equitable Distribution in practice involves a three-step process. The first step is to identify the marital assets and liabilities. Essentially, with a few exceptions, these are the assets "earned" and the liabilities "incurred" from the date of the marriage until the date a Complaint for Divorce is filed. The exceptions are usually inheritances received by one spouse and gifts received by one spouse from a third party. There are situations, however, where pre-marital assets or third party gifts or inheritances can become "marital" through commingling or other circumstances. There are also occasions where an asset acquired before the marriage or after a Complaint for Divorce is filed might still be eligible for distribution as part of the divorce.

The second step in the process is to evaluate the assets and determine the amount of the liabilities. This is the "quantification" stage. Often we need experts such as real estate appraisers, actuaries, or forensic accountants to assist us in making these determinations. There are also issues relating to timing, i.e., at what point in time is the asset to be valued? As is often the case, the answer depends on the nature of the asset among other factors.

The third and final step in the Equitable Distribution calculus is to determine a fair and "equitable" allocation of the assets and liabilities. As New Jersey is an Equitable Distribution Jurisdiction and not a Community Property Jurisdiction, assets and liabilities are not automatically divided equally. So if someone tells you assets and liabilities in New Jersey are always divided 50/50, don't believe them. While "marital fault" (adultery, cruelty, etc.) is irrelevant in the analysis, there are a number of other considerations that come into play and are listed in our statutes.

William W. Goodwin, Jr., Esq. is certified by the NJ Supreme Court as a Matrimonial Attorney. He is also qualified as a Mediator in the field of Family Law under the New Jersey Court rules, and he is trained in Collaborative Divorce. Contact Mr. Goodwin at 908-735-5161 or via email.