How Are Assets And Property Divided In Divorce?
For individuals going through a divorce, property division is often one of the most contentious issues. Personal possessions often have emotional value as well as financial value, which can affect how they are handled in divorce. Property division is also complicated because it requires a determination about what is included as part of a marital estate.
The Monmouth County attorneys at Deitch & Perone, P.C., are experienced at helping individuals navigate the sometimes complex waters of property division in divorce. We have helped many business owners and individuals with significant assets get through their divorces with their finances and futures intact. We also help clients understand the divorce process and what they might expect under New Jersey law.
Understanding Marital Property And Equitable Division In New Jersey
In New Jersey, most assets acquired during the marriage are considered marital property. Exceptions would be things like inheritances (where money was not mingled with marital funds) and gifts. Separate property includes anything owned prior to marriage or acquired after filing for divorce.
Property that is commonly divided in divorce includes:
- Bank account assets — Assets held in shared checking, savings and money market accounts
- Personal belongings — Furniture, motor vehicles, jewelry, collections and artwork
- Retirement assets — 401(k)s, IRAs and pensions
- Real estate — Family home, vacation residences and rental properties
- Investment accounts — Stocks, bonds and other accounts in an investment portfolio
- Business assets — Stake or shares in a business and business-related assets
- Debts — Division of repayment responsibilities for credit card, medical and student loan debt
Once the court has determined what property should be included in the marital estate, an accurate value must be assessed. With valuables, businesses and illiquid investments such as artwork, obtaining accurate valuation can be challenging. The value of assets can have a significant impact on your financial future after divorce.
New Jersey is an equitable division state, which means that when marital property assets are allocated in divorce, they must be fair. Fair, however, does not mean a 50-50 split.
Because we have handled so many divorces over the years, we are able to work efficiently to assess property. We are also able to identify problems with assessments. We have a solid understanding of how issues such as taxes will be handled for various types of property. When working with clients, we focus on helping them preserve their assets while minimizing their exposure to taxes and other liabilities.
Division Of Retirement Accounts
Retirement accounts are often desirable because of the tax treatment they receive. We work with our clients to help them preserve their interests in 401(k)s, 403(b)s, pensions and IRA accounts during divorce.
Retirement assets divided in divorce are transferred by means of a qualified domestic relations order (QDRO). A QDRO must be obtained by the court to ensure that retirement assets are not taxed when they are transferred.
If retirement assets are being transferred as part of the divorce, we will walk our clients through obtaining a QDRO and moving the retirement accounts.
Pre-Divorce Planning Is Important For Asset Preservation
One of the keys to asset preservation during divorce is proper planning prior to filing. This is especially important for business owners and individuals with substantial investment accounts. Planning enables our clients to ensure that financial documents provide a true picture of the current value of businesses and other holdings.
Planning prior to divorce is also important to ensure that our clients have a means of supporting themselves during the divorce process. We advise our clients on important steps such as opening a separate bank account to provide cash flow during the divorce.
As part of the planning process, we work with our clients to develop a strategy for handling assets during divorce. We identify priorities to facilitate negotiation once the divorce is underway.
Are You Ready To Talk About Protecting Your Future After Divorce?
Are you worried about how your divorce will impact your financial future? Talk to a lawyer today. Contact Deitch & Perone, P.C., using our online contact form or by calling our office in West Long Branch at 732-287-6086 or Scotch Plains at 732-287-6086. We represent clients throughout Monmouth County.