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Dividing property in a divorce

On Behalf of | Mar 30, 2020 | Family Law |

When couples end their marriage or civil union, they must deal with the division of the property that they acquired and payment of their debts. Seeking fair and reasonable property division under New Jersey law is an important part of any divorce.

New Jersey applies equitable distribution to dividing property and debts accrued when the couple was married or in a civil union. When allocating property and debts, a judge will determine what is fair.

Specific considerations include the length of the marriage or civil union, the spouses’ age and health, the income or spouse each party brought to the marriage or civil union, any written agreement governing property distribution, the custodial parent’s needs and anticipated medical or educational expenses for a spouse or child.

But this does not require an equal split. It is difficult to change the judge’s decision after divorce unless, in unusual cases, a party shows good cause.

Equitable distribution of property

Equitable distribution usually includes the couple’s home, any land they own, personal property such as vehicles or furniture, personal injury awards, and severance pay or pensions even if the payments will occur in the future. A judge will decide which property may be divided, determine its value and establish how the property will be divided.

With some exceptions, equitable distribution does not govern property acquired before marriage or a civil union and after the filing of the divorce complaint. Courts usually do not include gifts received by a spouse from another person or an inheritance from a relative as part of their marital property if these are not placed in a joint bank account or covered by a deed in the name of their other spouse. Gifts between the spouses, however, are marital property that can go through equitable distribution.

Additional considerations apply to other assets. First, pensions must be evaluated by an expert to determine its value when it is divided. Division is usually based on the length of time of the marriage or civil union.

That expert must also prepare a qualified domestic relations order for these accounts that a court needs to approve. But couples in a civil union cannot use a QDRO because these unions are not recognized under federal law.

Next, health insurance has specific rules. If a spouse’s employer has at least 20 employees, their spouse may ask for a court order requiring continued coverage for a short period following the divorce. Federal law also requires continued COBRA coverage.

Although COBRA does not cover civil unions, New Jersey law mandates employers with less than 50 employees offer extensions like COBRA. Where this coverage does not exist, a court may order a spouse to pay for coverage for their former spouse and their children.

If a spouse was injured during the marriage, their spouse may be entitled to part of the personal injury award attributable to lost earnings. This applies even if the award is not obtained until after the divorce.

Debt 

Equitable distribution is also used for debt accrued by either party between their marriage or civil union and the filing of the divorce complaint. Both parties are generally responsible for debt accrued during the marriage or civil union. But debt for purchasing items unrelated to the marriage or civil union and after separation is the responsibility of the spouse who acquired it.

Spouses often grant their spouse authorization to use their credit card.  This authorization should be cancelled the divorce or dissolution is final.

These matters may be complicated and require legal representation. Consultation with an attorney can provide options on dividing property and debt. An attorney may pursue a fair and reasonable decree.