August 14, 2013 – When spouses are contemplating a divorce, division of property is a serious concern. In some cases, asset distribution may be governed by a prenuptial or postnuptial agreement. In the absence of a pre- or postnuptial agreement, however, division of property must be determined by an agreement between the parties or by a court order after its review of the facts of the case.
Those going through an amicable divorce may easily come to a decision on dividing up the family home, other real estate, and any other assets acquired and owned during the marriage. The divorcing couple may decide to share the equity in the family home upon its sale; however, if there are children of the marriage, the custodial parent may retain the house so that disruption to the children can be limited. In this case, the non-custodial spouse may receive other marital property worth the equivalent of the family home.
In the case of an acrimonious divorce, the court must intervene. The courts will apply the state laws to determine how property is divided between the parties. In either case, the assistance of an experienced New Jersey divorce attorney is essential to ensure that your rights to marital assets are protected.
Community Property vs. Equitable Distribution States
State laws govern how a married couple’s property will be split upon their divorce. A state can either be a “community property state” or an “equitable distribution state”. In a community property state, the property that is earned or acquired during the marriage is equally divided between the parties. Conversely, in an equitable distribution state, the courts will divide the property, including real property, in a manner that is found to be fair and equitable, but not necessarily equal. In doing so, the court in an equitable distribution state will have wide discretion and consider many factors, including but not limited to the duration of the marriage; existence of children of the marriage, each party’s current and future income; lifestyle; age and health of each spouse; each spouse’s contribution to purchasing the property in the first place; tax consequences; and the value of the property.
What Happens to the Marital Home in a New Jersey Divorce?
New Jersey is an equitable distribution state. That means that the court will consider what is equitable when determining how the marital home will be distributed between the soon-to-be ex-spouses. Once the court determines the dollar value of each party’s equitable interest in the home, the parties have three options for distribution.
First, one party may “buy out” the other party. If the property is mortgaged, one party will obtain a loan in his or her name alone to refinance any existing mortgages and pay the other spouse his or her share of the equity at closing. Also, one party may agree to accept other marital assets in exchange for their equitable interest in the family home. In either case, the family home and liens against it will be in one party’s name after closing.
Selling the house outright and dividing the proceeds may be the easiest option if neither spouse can afford to buy out the other. The proceeds will be divided by agreement or per a court order.
Finally, the third option would be to continue to own the house together, with no sale or refinance. This option is common when children are high-school age and the divorcing parents feel it is beneficial for their child to remain in the same high school through graduation. One estranged spouse moves out with the agreement that after a specific period of years the house will be sold. This can cause some difficulties because there must be a plan for payment of expenses and maintenance of the property. Upon the sale of the home, the assets are equitably distributed.
New Jersey Divorce Attorneys at the Law Firm of Richard C. Klein Will Protect Your Rights During Equitable Distribution
New Jersey divorce lawyer Richard C. Klein, head of the Family Law Group of Cooper Levenson will work with you to ensure that your property division is fair and equitable and your rights are protected under the equitable distribution laws in New Jersey. Mr. Klein’s law offices are conveniently located in South Jersey in Cherry Hill and he represents clients throughout New Jersey including Haddonfield, Pennsauken, Voorhees, Moorestown, Princeton, Marlton, Mt. Laurel, Atlantic City, and all of Atlantic County, Cumberland County, Salem County, Gloucester County, Burlington County and Camden County. Call 856-857-5526 or submit an online contact form to schedule an appointment.