How the Equitable Distribution Process in New Jersey Works

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New Jersey uses equitable distribution when dividing the property between the spouses. This principle recognizes that each party is due a portion of the property and the distribution should be fair. However, the division is not always equal.

The spouses can come to their own agreement if they would like on their own, through negotiations between their lawyers or through mediation. If they cannot reach an agreement, the court can decide how to divide the property. IN any event, the following steps are used to equitably divide the property between the spouses:

Identify Marital Property

Not all property that is owned by spouses is marital property that is subject to division. Separate property includes that property that is owned prior to the marriage or through a valid prenuptial agreement. It also includes property that was acquired through using separate funds and maintaining separate funds. Separate property also includes individual gifts or inheritances that the spouse receives. It is the duty of the spouse alleging that certain property is separate to show that it is separate.

Marital property includes assets and debts the spouses accumulate during the marriage. It also includes any separate property that was commingled during the marriage and was transformed into marital property because the property became so attached to the marital property that it could no longer be traced separately. Also, if one spouse changes the title on separate property to the other spouse’s name, the separate property also becomes marital property.

Once the spouses have arrived at the identification of all marital property, the spouses can prepare a schedule that details all of the marital property.

Determining the Value of Marital Property

Once the marital property has been properly identified, the next step is to determine the value of marital property. Generally, the value of the marital property is its fair market value. For example, if the couple owns a house, the value is what the house would likely be sold for in the open market. A vehicle’s value may be its blue book listed value.

If the value of the property is not easy to determine, the spouses may need other professionals to help determine its value. For example, a real estate agent may look into what comparable homes in the area have sold for, or an appraiser may be necessary to determine the value of other property.

Distribute Property

In equitable distribution, the parties should walk away with a comparable amount of marital assets. However, there may be a number of ways to approach such distribution. The parties may agree to sell their real property and split the proceeds between them while agreeing to a separate distribution of personal property. However, the parties may agree to other arrangement that might complicate the distribution. For example, the spouse who will have primary custody of the children may want to keep the home while the children are growing up. Alternatively, the spouses may decide to rent out the property if the market is weak and the property may not sell for an acceptable price in the current market.

In some situations, one spouse may be able to buy out the other spouse. For example, the spouse who wants to stay in the home may refinance the property and give the other spouse his or her amount of equity in the home. Alternatively, he or she may forfeit other assets that make up the same value as the other spouse’s interest in the home.

However, there may be complications if the spouses do not agree on how the property should be divided. In these situations, the court considers several factors to determine how to divide the property between the spouses.

Another potential complication concerning marital property is retirement accounts. In these situations, a Qualified Domestic Relations Order is often necessary to send to the plan administrator. This order gives the authority to the administrator to provide a portion of the retirement benefits to the other spouses while minimizing any tax consequences.


Family courts often divide debts in an equal manner between the spouses. However, there are some exceptions. For example, if a spouse stays with a particular asset that has a debt attached to it, that spouse usually keeps that debt. If a spouse is solely responsible for a debt, that spouse will usually be given the debt.

Property division can be a complex process that requires the competent legal representation by an experienced New Jersey family law lawyer.


Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.

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