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Equitable Distribution

NJ Equitable Distribution Attorneys

Helping protect your finances and reduce your stress

Dividing marital assets (and liabilities) is a challenging component of any divorce. New Jersey practices “equitable distribution,” which means assets must be divided fairly—which doesn’t necessarily mean equally.

At Jacobs Berger, our attorneys have extensive experience helping clients and families fairly and creatively resolve asset and liability distribution matters.

We work with clients to understand their unique situations—and we appreciate the value of your personal relationships. We don’t want to dismantle everything you and your family have built. Instead, we seek productive solutions to fairly divide those assets (and liabilities) in ways that meet your needs.

Divorce is complicated enough already. If marital asset division is one of your concerns about the process, contact Jacobs Berger, LLC to schedule a strategic planning session with one of our equitable distribution attorneys. We can guide you through the process in a constructive and forward-thinking way.

Marital Asset Division

Marital property, broadly defined, is property acquired during the marriage. It doesn’t include gifts given to one spouse by a third party or assets already designated as individually owned through a marital agreement—but it does include things you probably don’t want, like debt.

Marital assets can be:

  • Property and real estate
  • Automobiles
  • Furniture and furnishings
  • Collections
  • Retirement assets
  • Financial assets
  • Airline miles and hotel points
  • Family-owned and private businesses
  • Pet custody
  • Debt, including mortgages (often called liabilities)

In contrast, individual assets are generally categorized as property acquired before or after the marriage but not connected to the marital enterprise (like inheritance)—and gifts given to one person during the marriage.

If your divorce goes to court, New Jersey state law requires that your marital property be divided according to equitable distribution—a process that divides assets and liabilities fairly, but not necessarily equally.

In order to decide what a “fair” division looks like, the court takes many things into consideration, including individual assets. The following may be considered to reach an equitable distribution decision:

  • Each party’s financial situation and their capacity to earn
  • Individual assets, including retirement plans and separately-owned businesses
  • What each party contributed in terms of marital assets and non-monetary assets (such as childcare)
  • Length of the marriage
  • Marital agreements, including prenuptial agreements
  • Each person’s future needs and responsibilities
  • The parties’ health and ages
  • Alimony

If you and your former spouse use Alternative Dispute Resolution (ADR) methods such as mediation to reach your Marital Settlement Agreement, then you aren’t going through the court except for final approval. Therefore, you aren’t bound by equitable distribution laws in reaching an agreement—though these laws can make for useful guidelines since this process depends entirely on both parties agreeing on how to divide assets.

At Jacobs Berger, LLC, our equitable distribution attorneys have extensive experience in guiding divorcing parties through the marital assets division process—whether through mediation or in court.

Business ownership division

Businesses can be considered marital assets. While the most obvious example would be a business started during the marriage, there are other situations that can make a business a marital asset, too.

Businesses might be marital assets. For example, if one party started a business before the marriage and the value of the business grew significantly during the marriage, then that increase in value could be considered a marital asset.

Likewise, if one person owns a business prior to marriage and the other person quits their job after marriage to begin working at the business, then a portion of the business could be considered a marital asset.

In determining the value of a business, the court or either party may bring in outside experts such as industry experts and Certified Personal Accountants. It’s also possible for a business to be protected from becoming marital property with a prenuptial agreement.

At Jacobs Berger, our equitable distribution attorneys have extensive experience in working with clients to come up with creative solutions that can sometimes help circumvent a business owner needing to sell their business or provide their ex-spouse with a buyout of a percentage of that business.

Home and real estate division

When it comes to divorce, the family home is one of the most common assets that needs to be divided. There are many factors that can make this challenging, including memories, how children are used to living, and the power of two incomes to afford a home, versus one.

If the home was purchased during the marriage, then it’s considered a marital asset, and the divorcing parties can take one of three steps:

  • Sell the home and split the proceeds (or the debt, if the home is underwater)
  • One person can buy the other out of the home
  • Retain joint possession

If a home was purchased by one party prior to the marriage, then it may have some components which are considered marital property and some which are considered separate property—but note this is a fact-sensitive analysis and tends to be determined on a case-by-case basis.

The family law attorneys at Jacobs Berger have years of experience in home and real estate division and can guide you through the process—whether you’re concerned about the family home or a beloved vacation property.

Debt division

In Morris County and the rest of New Jersey, marital debt tends to be treated in the same way as marital assets.

Debt acquired during the marriage usually belongs to both people, regardless of whose name the debt is under.

This can include debts such as:

  • Credit cards
  • Student loans
  • Mortgages
  • Car payments
  • Business loans

There are a few exceptions to this rule for debt acquired illegally or deceitfully.

If you have concerns about marital asset division during divorce, including concerns about how any debt will be divided, the equitable distribution attorneys at our family law firm can work with you to resolve existing debt issues in an amicable and forward-thinking way.

How Are Assets Divided During Divorce?

In divorce in New Jersey, assets and debts are divided according to equitable distribution, which is not an equal division but instead is a “fair” division of marital property.

Everything from retirement accounts to airline miles can be considered assets—and the same holds true for debt, even if you weren’t the one who ran it up.

Many divorcing parties use mediation to reach their Marital Settlement Agreement, and in these cases, they aren’t technically bound by laws of equitable distribution. However, while mediation is guided by a neutral third party, it’s entirely dependent on both parties coming to an agreement. Therefore, equitable distribution principles make for good guidelines.

If some or all of your divorce proceeds through court, a judge will apply equitable distribution law to your case. In doing so, the judge will also look at individual assets and responsibilities to determine what is a “fair” distribution of marital property.

However your divorce proceeds, we highly recommend working with an experienced equitable distribution attorney. Marital asset division is a complex process, even in mediation, and having knowledgeable legal counsel is extremely helpful.

Factors a judge may use to determine property division

In determining property division according to equitable distribution, the judge will consider personal assets as well as marital assets and debt.

The judge will look at a number of factors including:

  • Personal finances, earnings, and earning capacity
  • Private or family-owned businesses
  • Personal assets not subject to equitable distribution
  • Contributions to the marriage (monetary and non-monetary)
  • Length of the marriage
  • If either party contributed to the other’s education and earning power
  • Prenuptial agreements and other marital agreements
  • Age and health
  • Individual needs and responsibilities, such as child support (including from a previous relationship)
  • Alimony paid by one party and received by the other

Types of Equitable Distribution

In addition to business, home, real estate, and debt division above, there are other items that are considered marital assets when it comes to equitable distribution.

Retirement assets

Retirement assets are considered marital assets with the exception of anything added to a retirement account before or after the “cut-off date” (which is an agreed-upon date between the parties) or the date a complaint for divorce is filed. Things like fluctuation of the market factor into the division of retirement assets. In assessing the value of retirement accounts, it’s important to factor in that taxes on retirement accounts are delayed until the money is withdrawn.

Furthermore, while you’re allowed to withdraw funds without penalty if you’re getting divorced, it’s important to work with your attorney to go through the proper procedures and make sure you won’t get hit by a large tax bill later.

Financial assets

Although marital financial assets are subject to equitable distribution, the process isn’t as straightforward as liquidating those assets and splitting the money—liquidation often comes with significant tax consequences.

The division of financial assets is complex. Some stocks pay dividends, bonds mature at different times, each party may have different risk tolerance with their investments—and ensuring accurate disclosure during the discovery process is a vital component of fair division. That’s why we highly recommend working with an attorney—as well as consulting a financial advisor—during this process.


Any vehicles for which the amount due in car payments is less than the value of the car count as assets. If each party has a car and they’re worth about the same amount according to the Kelley Blue Book or similar guides, then each party may keep their car. However, if one person’s car is worth far more than the other’s, then there will need to be an equalization or credit to account for the difference.

Furniture or furnishings

Furniture is also subject to equitable distribution, although since furniture tends not to retain the same value as its initial cost, divorcing parties are often able to talk through who should take what.


If purchased during the marriage, or if subject to more than a nominal gain in value during the marriage, collections of art, antiques, and other valuables are likewise considered marital assets.

Airline miles and hotel points

Yes, airline miles and hotel points—if they’ve accrued more than a nominal value—are subject to equitable distribution in Morris County and the rest of New Jersey.

Pet custody

Although pets may not be the first thing that comes to mind when dividing property, they can be considered marital property—unless one person owned the pet prior to marriage, in which case they may be considered personal property.

If the question of pet custody goes to court, a judge will consider who is primarily responsible for the pet, who covers the pet’s bills, and if one party would be unable to care for the pet. If the divorcing parties have children and a child is attached to the pet, the judge may award the pet to the custodial parent.

How to Determine What Is Equitable

Determining what’s equitable when it comes to marital asset division is a complex process with a lot of moving parts. For instance, if one party owns a house and once they’re married, the other moves in and starts helping with the mortgage, whose house is it? What if the second party has an inherited family cabin that’s in their name only? Now throw in credit card debt, a retirement account, and maybe an expensive piece of artwork the parties received as a wedding gift or child support payments from a previous relationship. Pretty soon, the picture gets so complicated. It can be hard to maintain a bird’s eye view. This is one of the reasons why it’s extremely helpful to have the counsel of an equitable distribution attorney, even for mediation. At Jacobs Berger, our family law attorneys have years of experience and a network of professionals at the ready to guide you in making informed decisions as you go through your divorce.

Contact an Experienced Divorce Attorney in Morris County

The equitable distribution attorneys at Jacobs Berger, LLC have decades of experience to draw on when guiding clients through the divorce process—whether via mediation or in court. Marital asset division may be complicated, but you don’t need to go it alone.

Our attorneys bring a creative and solution-oriented approach that can help resolve highly complex and emotional issues, including how to divide assets and debt.

Safeguard your financial future with a less stressful and more straightforward approach.

Contact us today to schedule a strategic planning session.