Learn how property is divided in a New Jersey divorce, including which property is included, how judges decide on a fair distribution, and who gets the family home.
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A couple's property is divided as part of divorce. But the laws on property division in divorce vary from state to state. Under New Jersey law, all marital property must be divided equitably—meaning that it the distribution should be fair but not necessarily equal.
- Is New Jersey a Community Property State?
- New Jersey Divorce Laws on Marital Property and Separate Property
- Dividing Marital Property in a New Jersey Divorce
- Distributing Debt in a New Jersey Divorce
- Getting Help with the Property Division in Your Divorce
Is New Jersey a Community Property State?
No. New Jersey law follows what's known as "equitable distribution" when dividing property in a divorce. Basically, this means that judges will decide what's fair under the circumstances of each case—which doesn't always mean a 50/50 split. It also doesn't mean that each asset is divided—rather that each spouse gets a fair share of the overall net value of their property—assets minus outstanding debts. (Learn more about the differences between equitable property division and community property rules.)
New Jersey Divorce Laws on Marital Property and Separate Property
To figure out who walks away with what property in a divorce, the first step is to determine what's "marital property" versus "separate property." Spouses typically keep their separate property but divide marital property between them when they get divorced.
What Is Marital Property in New Jersey?
Under New Jersey law, marital property includes most property that either or both spouses acquired during the marriage (with a few exceptions discussed below). (N.J. Rev. Stat. § 2A:34-23(h) (2023).) You'd be forgiven for thinking that "during the marriage" means up until you're divorced. But in New Jersey—at least in this context—it means from the wedding day until one spouse files for divorce, not until a couple is officially divorced. (Lee v. Lee, 433 A.2d 824 (N.J. Ch. 1981).)
Marital property in New Jersey typically includes:
- money that either or both spouses earned during the marriage
- joint bank accounts
- homes, motor vehicles, and furniture purchased during the marriage
- the portion of retirement plans that comes from contributions made during the marriage, as well as any appreciation of those contributions in that time
- the portion of a business that either spouse started during the marriage, and
- gifts between spouses.
What Is Separate Property in New Jersey?
In New Jersey, separate property includes any money or other assets that spouses acquired before they married and after one of them filed divorce papers. In addition, some money or assets will be considered separate property even if they were acquired during the marriage, including:
- money or property one spouse inherits
- gifts intended for one spouse (but not gifts between spouses), and
- the increase in value of separate property.
Similar to other states, New Jersey requires that spouses who want to hold onto their property after the divorce must prove it's their separate property. For example, a spouse may have to show that a watch was left to them in their parent's will or that their sibling meant for a painting to be a gift to that spouse rather than to the couple.
When it comes to an increase in the value of separate property, the spouse who owns that property will have to prove that the increase wasn't in any way attributable to the other spouse's efforts or contributions. For instance, the appreciation of a house that's due to changes in the real estate market would remain the separate property of the spouse who owned the property before the marriage. But to the extent that the house is worth more because the couple used marital funds to make major improvements on it, that portion of the increase would be marital property. Similarly, if the couple regularly used marital funds for mortgage payments on one spouse's house, the other spouse would be entitled to a share of the mortgage pay-down. (Griffith v. Griffith, 448 A.2d 1035 (N.J. Ch. 1982).)
When Separate Property Can Become Marital Property
Sometimes, separate property can become marital property, either intentionally or unintentionally. For example, this can happen if:
- a spouse puts a separate asset (like a house or car) in both spouses' names, or
- separate property is mixed ("commingled") with marital property so that it's impossible to distinguish between them, like when a spouse deposits inherited money into a joint bank account.
Assessing the Value of Marital Property
One of the most important parts of the property division process is assessing the value of marital property—whether it's a home, retirement plan, business, or stocks. Some marital assets are easy to value, like a joint bank account. But with some assets like a home or business, you might need help from an appraiser or other expert.
It can be particularly tricky to calculate the value of spouses' interest in retirement accounts before dividing them in divorce, so you'll probably need the services of an actuary.
Dividing Marital Property in a New Jersey Divorce
There are two basic ways of dividing property in divorce: through an agreement between the spouses or a decision by a judge after a trial on the issue.
Agreements on Dividing Property
As with any other issue in a divorce, you and your spouse may decide how you'll divide your property, either in a stand-alone agreement or as part of a broader divorce settlement agreement that resolves all of the legal issues involved in ending your marriage. In fact, most couples reach a settlement at some point in the divorce process.
How New Jersey Judges Decide on Property Division
If you and your spouse can't agree, a judge will have to decide how to divide your property. New Jersey law requires that when judges are making this decision, they must consider all of the relevant circumstances in the case, including:
- the length of the marriage
- the spouses' ages, as well as their physical and emotional health
- the income or property each spouse brought into the marriage
- the couple's standard of living during the marriage
- the financial situation each spouse will be in after the divorce
- each spouse's income and future earning potential
- each spouse's contributions to the other spouse's education, training, and earning potential
- whether (and to what extent) either spouse had to put off career goals during the marriage
- the value of the couple's marital property and each spouse's contribution to its purchase and change in value
- a spouse's contribution as a homemaker during the marriage
- the tax consequences of the property division for each spouse
- whether the parent with primary physical custody of a child needs to own or live in the marital home
- the spouses' debts and liabilities, and
- whether a trust fund might be needed to provide for any future medical or educational costs for the spouses or their children.
A judge in New Jersey will assume that both spouses contributed to the value of marital property. (N.J. Rev. Stat. § 2A:34-23.1 (2023)).
Under New Jersey law, judges may not award any property to a spouse who's been convicted of murdering or trying to murder the other spouse (N.J. Rev. Stat. § 2A:34-23(h) (2023)).
Who Gets the House in a New Jersey Divorce?
A house is often a couple's most valuable property, so figuring out who gets the family home can cause a lot of conflict. The easiest way to resolve this may be to sell the house and share the sale proceeds. If one spouse doesn't want to do this, the other spouse may ask a judge to order a forced sale. But there's no guarantee a judge will grant that request.
The issue of the family home can be even more complicated if the couple has minor children. Often, the custodial parent will often want to stay in the house to avoid uprooting the children. There are different ways to handle this. For instance, if it's economically feasible:
- the spouse who wants to stay could buy out the other spouse, either by agreeing to give up enough other marital assets to balance the scales or by refinancing the mortgage and using the proceeds to pay the other spouse, or
- the couple could continue to co-own the house for a period of time after the divorce—such as until the youngest child enters or finishes college.
Distributing Debt in a New Jersey Divorce
Debts that a spouse took on before the marriage (like student loans) will remain that spouse's sole responsibility. But any debts the couple incurred during the marriage—such as the mortgage on the family home, joint credit card bills, and medical expenses—are generally considered marital debts. That means they're part of the property division in divorce. When an asset has a debt attached to it (like a car loan), the spouse who gets that property in the divorce will typically be responsible for paying off the debt. Otherwise, debts go into the overall pool of property (assets minus debts) that will be distributed between the spouses.
In some circumstances—such as when a spouse racked up a lot of gambling debts during the marriage—the judge may decide it would be fair to make that spouse solely responsible for paying off the debts rather than including them in the overall net value of the couple's property.
There's an important distinction to keep in mind when it comes to debts: Creditors may not —and often do not—care what the judge decides (or what a property settlement agreement says) about which spouse is responsible for a specific debt.
For example, say your divorce judgment assigned responsibility to your ex for paying the balance on a joint credit card, but your name is still on the account. If your ex doesn't keep up with payments, the creditor could come after you to collect the debt. Even though you could go back to court and ask the judge to order your ex to repay you, that wouldn't fix the hit on your credit score.
To avoid an outcome like that, it makes sense to try to pay off (or refinance) as many of the marital debts as possible during the divorce negotiation process. If you can't do that, it's important to keep an eye on any joint debts so that you can swiftly address any payment problems.
Getting Help with the Property Division in Your Divorce
If you're having trouble reaching a property settlement agreement with your spouse, mediation may help. A qualified mediator can help you find solutions that will be fair to both of you. If you have a complete settlement agreement before you file for divorce, you can take advantage of the time and cost savings of an uncontested divorce in New Jersey, including being able to use an online divorce service to help with the forms. And mediation typically costs much less than a contested divorce.
But if you haven't been able to reach a complete agreement before you file for divorce in New Jersey, you may need the help of a family law attorney. (Learn more about when you can handle your own divorce and when you need a lawyer.) You and your spouse can also still try to settle your divorce at any point before going to trial, with the help of your lawyers, a mediator, or both.