Truth be told, there are a plethora of misconceptions when it comes to an understanding of the meaning of equitable distribution. For one, you should not think of equitable as equal. Instead, consider equitable distribution as a fair means of dividing up marital property.
Notably, NJSA 2A:34-23(h) provides valuable insight into what constitutes marital property subject to equitable distribution. Specifically, this includes personal and real property “which was legally and beneficially acquired” during the marriage.
In the meantime, the same portion of the law addresses property that is ineligible for equitable distribution even if it was legally acquired during the marriage. However, you should know that the rules could change if you comingle funds.
If you or your spouse can show that something was a gift or left to you by inheritance, you are not expected to divide the proceeds with your husband. The latter applies even if your loved one failed to leave behind a will naming you as a beneficiary.
As you might guess, premarital property is viewed as separate property and is not subject to equitable distribution with your soon to be ex-husband or ex-wife. That said, the lines regarding the differences between premarital and marital assets aren’t always clear. For example, a business may have value as both a premarital and marital asset.
Determining Equitable Distribution
The courts encourage couples to negotiate with one another when it comes to equitable distribution. In fact, that’s the same advice that you’ll generally receive from an experienced family law attorney. It makes little sense to “nitpick” over small material items and spend countless dollars on litigation because you just can’t compromise.
In theory, settling issues regarding equitable distribution makes sense. However, you may feel the need to dig in your heels when it comes to more substantial matters.
If you thought ahead and properly executed a prenuptial agreement before marriage, equitable distribution becomes an easier task.
As much as you might not sound overly romantic, the split of a marriage resembles the end of a business relationship. The bottom line comes down to the equitable distribution of a partnership.
The Criteria for Equitable Distribution
When the decision is left to the court, the judge uses the criteria found in NJSA 2A:34-23.1 to evaluate the matter. This includes consideration of the following:
a) The duration of the marriage or civil union;
b) The age and physical and emotional health of the parties;
c) The income or property brought to the marriage or civil union by each party;
d) The standard of living established during the marriage or civil union;
e) Any written agreement made by the parties before or during the marriage or civil union concerning an arrangement of property distribution;
f) The economic circumstances of each party at the time the division of property becomes effective;
g) The income and earning capacity of each party, including educational background, training, employment skills, work experience, length of absence from the job market, custodial responsibilities for children, and the time and expense necessary to acquire sufficient education or training to enable the party to become self-supporting at a standard of living reasonably comparable to that enjoyed during the marriage or civil union;
h) The contribution by each party to the education, training or earning power of the other;
i) The contribution of each party to the acquisition, dissipation, preservation, depreciation or appreciation in the amount or value of the marital property, or the property acquired during the civil union as well as the contribution of a party as a homemaker;
j) The tax consequences of the proposed distribution to each party;
k) The present value of the property;
l) The need of a parent who has physical custody of a child to own or occupy the marital residence or residence shared by the partners in a civil union couple and to use or own the household effects;
m) The debts and liabilities of the parties;
n) The need for creation, now or in the future, of a trust fund to secure reasonably foreseeable medical or educational costs for a spouse, partner in a civil union couple or children;
- o) The extent to which a party deferred achieving their career goals; and
p) Any other factors which the court may deem relevant.
As you can see, this list contains several issues that require substantial review. With this in mind, you may be interested in reading the results of a recent case involving equitable distribution.
Wife Disagreed with Court’s Equitable Distribution Ruling
The Appellate Division decided Fassett v. Fassett on May 13, 2019. The court marked this opinion as unpublished, which means that it is solely binding the named parties.
After five years of marriage, Granville B. Fassett and Lisa Fassett separated in February of 2014. When the couple first wed, Granville was sixty-three, and Lisa was forty-six years old. At the time, Granville worked full time, and Lisa was in pursuit of a doctorate degree. She intended to open an undisclosed practice of some type.
In 2012, Granville left his job because of a medical disability. He subsequently collected disability benefits for the next two years.
According to the case history, Granville purchased a home just before he married Lisa. Since Lisa’s divorce from her former husband was still pending, Granville put the house in his name alone. Nonetheless, Lisa contributed to the purchase and closing costs. They both paid equal shares of the monthly marital expenses.
When Granville left the marital home, he stopped paying the mortgage in his name. Ultimately, the lender initiated foreclosure proceedings. Granville filed for bankruptcy, which resulted in the discharge of the mortgage loan and credit card debt.
Eligible Property Divided Equally
Remarkably, the Appellate Division praised the trial court on its “well-reasoned written decision” regarding the division of the eligible property in this case.
Before the couple’s marriage, it appears that Granville had investments in both a 401K and money market fund. Lisa did not have the right to share in the premarital accrual of those investments. However, the court did find that she was entitled to fifty percent of the asset accumulated during the five-year marriage.
Meanwhile, the court also found Lisa’s credit card debt as money spent related to the couple’s marriage. As a result, the court divided the bills between the parties.
Lisa also sought contributions to her outstanding student loans from Granville. However, the court reasoned that a portion of the $83K due existed before the marriage. Besides, Lisa “incurred the debt solely to advance her own economic opportunity.”
Even though the court found that Lisa’s educational pursuit did not benefit Granville, the judge awarded Lisa a credit of $25K, finding it “equitable under the circumstances.”
The Basis for Appeal
As far as Lisa was concerned, the court did not equitably distribute her former husband’s 401K. Despite the short term of the couple’s marriage, Lisa felt entitled to half of the entire amount.
Upon review, the Appellate Division affirmed the lower court’s decision. The judge in the Family Part determined the eligible property and divided it equally. This included a careful analysis of that “which was legally and beneficially acquired by [the parties] or either of them during the marriage")
Contact UsThe Fassett matter provides an excellent example of how the court considers the factors regarding equitable distribution. Could you be facing similar issues? Contact the Law Offices of Sam Stoia to schedule an appointment. We will be happy to meet with you to discuss your individual circumstances.