What do they Mean when they Say that New Jersey is an Equitable Distribution State and Not a Community Property State?

When it comes to dividing a divorcing couple’s property, there are two ways the court can handle this process: through equitable distribution or through community property rules.

Equitable Distribution is Not Equal Distribution

Most states, including New Jersey, are equitable distribution states. That means that when couples in these states divorce, their property is not divided 50/50. Instead, it is divided according to a list of factors that are used to determine each partner’s financial and personal needs following the divorce. These factors include, but are not limited to, the following:

  • The length of the couple’s marriage;

  • Whether one partner opted out of the workforce to care for the couple’s children;

  • Each partner’s income;

  • Each partner’s financial obligations following the divorce;

  • The tax implications each partner will face after the divorce;

  • The couple’s child custody and support arrangements;

  • Each partner’s age and health.

In equitable distribution cases, the court gives each partner a portion of the marital estate in accordance with his or her contributions to the marriage and needs following it. In most cases, this is not an equal share but rather, two shares optimized to individual needs. For example, if one partner is given the couple’s home in a divorce settlement, the other might receive a larger share of money in the couple’s shared savings account.

In an equitable distribution state, the court has more leeway to assign certain assets and debts to one spouse or the other, depending on who earned or accrued them.

Community Property States

Only nine states are what is known as community property states. In these states, a divorcing couple’s property is divided equally between the partners. Everything is assigned a monetary value and this value is used to divide the couple’s estate 50/50. Another key feature of a community property divorce is the strict adherence to the community property rule – when a couple divorces, all money, debts, and assets must be divided strictly 50/50, even if one partner contributed considerably more to a piece of property or bank account. This can lead to an individual being saddled with a portion of his or her spouse’s debt.

Work with a New Jersey Divorce Attorney

If you are considering filing for divorce, understand all of the components of the divorce process. One of the most important components is the property division process. Contact the experienced New Jersey divorce attorneys at Lansing & Hannum, LLC today to begin working with a member of our firm. We are here to serve you and other clients in Monmouth, Mercer, Burlington, Ocean, and Middlesex counties.

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