At Simon Law Group, we understand that the division of assets during a divorce is a critical aspect that demands careful consideration. Our seasoned legal team specializes in providing comprehensive guidance on divorce asset protection in New Jersey. We can assist with Equitable Distribution, Safeguarding Your Financial Interests, High-Asset Divorce Solutions and Transparent Legal Counseling with personalized strategies.
Understanding Marital Assets in New Jersey
Marital assets encompass all properties, possessions, and financial holdings acquired by either or both spouses during the course of the marriage. From real estate and investments to joint bank accounts, these assets form the pool subject to equitable distribution.
Distinguishing between marital and separate assets is important. Separate assets typically include properties or funds owned before marriage, inheritances, or gifts received individually. Our team meticulously navigates these distinctions to safeguard your rights to your separate assets.
Open and honest communication is fundamental in divorce proceedings. We emphasize the significance of full financial disclosure, urging clients to provide comprehensive details of all assets and liabilities. This transparency not only ensures an accurate evaluation but also promotes trust and fairness in the division process.
How Your Assets are Valuated
In New Jersey, the valuation of assets during divorce proceedings involves various methods to determine their fair market value. Here are common approaches used by financial experts and appraisers:
- Real Estate Appraisal
- Business Valuation
- Financial Statements and Account Review
- Pension and Retirement Account Valuation
- Personal Property Appraisal
- Income Capitalization
- Comparable Sales and Market Trends
- Forensic Accounting
In cases where there are suspicions of hidden assets or financial misconduct, forensic accountants conduct detailed investigations to uncover and accurately value all relevant assets.
It's essential to note that the chosen method depends on the nature of the asset. A combination of these approaches is often used to ensure a comprehensive and accurate valuation, facilitating a fair distribution of assets during divorce proceedings. Consulting with financial experts and experienced divorce attorneys, like Simon Law Group, can provide valuable insights tailored to your specific situation. We encourage high net worth clients to seek legal advice with this complex area of Divorce settlements.
Equitable Distribution in New Jersey
Equitable distribution is the fair division or dispersion of both assets and liabilities acquired during the marriage. It does not always mean "equal," although it may in some cases; the courts are instead focused on the concept of fairness, and of course what is fair may differ between reasonable people.
Equitable distribution can relate to things such as furniture, vehicles, pension plans, tax-deferred plans, stocks, bonds, mutual funds, mortgages, credit card debt, and other loans.
In considering the fair allocation of assets and liabilities, we look at the values and debts of all of your assets, including:
- Vehicles (cars, trucks, boats, planes, RVs, ATVs)
- Marital home value and associated mortgages
- Personal possessions with respective values
- Collectibles
- Ownership stakes in businesses
- Additional income sources
- Investment properties
- Retirement accounts (IRAs, pensions, 401(K)s, 403(B)s)
- Digital assets or cryptocurrencies
- Intellectual property
- Outstanding loans (mortgages, credit cards, business loans)
- Inheritances
- Joint and individual bank account values
- Profit-sharing or deferred compensation plans
- Annuities or supplemental retirement plans
New Jersey law allows "Equitable Distribution" to be attained through any of the following mechanisms:
- Mediation (a non-binding negotiation between the parties)
- Arbitration (a binding negotiation between the parties)
- Negotiations between both parties directly
- Negotiations between the attorneys representing you and your spouse
- Judicial determinations in Court
Courts will generally consider several factors between the parties, including:
- Your age and your spouse's age
- The length of your marriage
- You and your spouse's health
- Your incomes and your ability to produce more income
- Your contributions to your spouse's education and their contribution to yours
- Custodial responsibilities and duties for your kids, if you have any
- Whether you've held a job continuously or if you've been out of work or away from the workforce for some period of time
- Employment and labor skills or training, as well as career experience
- Whether added expenses are necessary to facilitate whether you or your spouse can work and support oneself
- Your standard of living during the length of your marriage
- Which property you brought to the marriage and which property your spouse brought to the marriage
- Any written agreements between you and your spouse concerning the division of property, and whether you wrote those agreements before or during the marriage
- You and your spouse's general economic circumstances
Community Property vs. Equitable Distribution
The main difference between community property and equitable distribution is that in a community property jurisdiction, there is an absolute 50-50 split of all property acquired during the marriage. In an equitable distribution jurisdiction, the goal is fairness or equitability. As such, in NJ, more assets may be considered “marital property,” but the split is not necessarily 50-50. A spouse that does not contribute to the family growth may indeed, and rightfully, receive a much lesser percentage of the family/marital assets.
How New Jersey Courts Determine Asset Distribution
In New Jersey, the courts follow a 3-step process for asset distribution in divorces. This comprehensive process ensures a fair and just distribution of assets, taking into account the unique circumstances of each divorce case. The court aims to achieve an equitable resolution based on a thorough analysis of all relevant factors
Identification of Marital Property:
- Marital property is defined as assets acquired by either or both spouses from the date of marriage to the divorce filing.
- Non-marital property, acquired before marriage, is generally not subject to division. However, it must be kept separate to maintain its status.
Valuation of Marital Property:
- The court assesses the value of marital assets, which may involve straightforward evaluations like bank statements or more complex processes, such as hiring appraisers for businesses or forensic accountants.
Equitable Distribution:
- Courts have broad discretion in determining the most equitable way to distribute assets under New Jersey's Equitable Distribution Statute.
- Factors considered include the duration of the marriage, the parties' age and health, initial contributions to the marriage, the standard of living, prenuptial agreements, economic circumstances, income and earning capacity, contributions to each other's education or career, tax consequences, and various other relevant considerations.
High Net Worth Divorces in New Jersey
High Net Worth Divorces must be handled with extra care
When a high net worth couple decides to dissolve their marriage through a divorce, they should be more cautious than a typical couple undergoing a divorce. Given that your financial stake in a fair and equitable divorce is much greater, there are a number of things that must be done to avoid needless complex litigation and of course, to ensure the protection of your assets. Issues in an ordinary divorce, such as Child Custody as well as Child Support, are still present and may present greater difficulties if one of the spouses lives overseas or frequently travels.
Our divorce attorneys recognize that settling a complicated divorce case properly requires strategy, top-tier negotiation skills, business experience, and investment experience, as well as implicit recognition of the importance of your personal brand as a businessperson, entrepreneur, celebrity, or athlete.
Special Considerations for High Net Worth Divorces Prenuptial Agreements
If you signed a prenuptial agreement before getting married, you may have concerns about how your prenup would impact asset distribution in the event of a divorce. Our divorce lawyers will examine your prenuptial agreement in depth and discuss with you the effect it will have on the settlement of your divorce case after listening to your circumstances and goals.
Real Estate for High Net Worth Clients
Real estate is often one of the most valuable assets in a marriage, and this is especially true for wealthy couples who own several homes or properties. Whether your real estate holdings include a marital home, vacation homes, commercial properties, or investment properties, you must decide what part of the property is subject to equitable distribution and what amount, if any, is excluded from asset division. The date of the marriage, the date of purchase, the down payment amount, and the source of the funds are all relevant variables in the allocation of these assets.
Valuations of Businesses, Practices, and Partnerships
In New Jersey, divorces involving business assets typically prolong the settlement process, especially if the divorce isn't uncontested. The ownership of a company necessitates a formal appraisal, often requiring the expertise of forensic accountants and actuarial specialists to assess its fair market value. The valuation process entails a comprehensive examination of various aspects, including the company's records, assets, inventory, real estate, and goodwill.
Determining whether the company is a "marital asset" involves assessing its ownership history, especially if it was acquired before the marriage. We assist in creating agreements tailored to your preferences, whether it's selling the company or continuing its operation post-divorce. Options like buy-outs, sales, annuitized settlements, or other distribution methods can be explored based on your specific circumstances.
Stocks and Stock Options Contracts
If you receive stock options as part of your compensation, you might already realize the difficulties that come with dividing these assets in a divorce. To establish whether assets are eligible for equitable distribution, we'll examine your stock options to determine the award date and vesting schedule. A constructive trust may be included in your settlement agreement to handle the tax implications of your stock option payout. It may also preserve your pre-distribution interests and rights while preserving any post-judgment alternatives.
Cryptocurrencies & Digital Assets
Cryptocurrency, recognized as property by the IRS for federal income tax, presents a challenge due to its private nature, especially assets like Monero with concealed addresses. However, transactions involving Centralized Exchanges (CEX) may leave traces on bank or credit card statements. For instance, deposits and withdrawals from platforms like Binance US, Coinbase, or Kraken can be identifiable. Additionally, a spouse's app store history might reveal the download of a crypto wallet or trading platform, aiding in asset discovery.
Under New Jersey's equitable division rules, a court may grant additional assets to a spouse if it's proven that the other concealed assets or acted financially dishonestly. The court, guided by Rule 4:50-3 and cases like Von Pein v. Von Pein, retains the authority to revisit equitable distribution decisions years later if fraud or concealed assets are discovered, emphasizing the serious consequences of financial dishonesty in divorce proceedings.
Assets for Retirement & Drafting Domestic Relations Orders
In divorces involving pre-marriage or marital accumulation of retirement assets, such as 401(k), 403(b), or IRA, these funds may undergo equitable distribution. The value accrued from the marriage's onset to the divorce filing typically falls under this distribution, covering pensions, deferred compensation plans, SEPs, and SERPs.
Our experienced team collaborates with skilled professionals to draft domestic relations orders, ensuring that your entitled share of benefits is safeguarded, even if the physical division doesn't occur immediately. We recognize the intricacies of your situation and meticulously analyze its implications to devise a strategic approach for dividing retirement assets or harmonizing them with other marital assets.
Whether it's a pension, IRA, Keogh plan, 401(k), 403(b), or part of an employee stock option plan, we provide detailed explanations of tax implications, buy-out options, and guide you through the complete Qualified Domestic Relations Order process. However, complications may arise if pre-marriage interests are combined with marital contributions, adding an extra layer of complexity to the division of retirement assets and employee benefit programs.
Legal Considerations Following a Divorce
Following a divorce, several legal considerations require careful attention to ensure a smooth transition to post-marital life. Updating legal documents is paramount, including wills, trusts, and beneficiary designations, to reflect the changed circumstances. If there's a name change, legal documents, identification, and financial accounts should be updated accordingly. Custody and visitation arrangements may need modification based on evolving circumstances or relocations. It's also important to address any outstanding financial agreements or obligations outlined in the divorce decree, such as alimony or child support, to avoid legal complications. Seeking legal guidance, like that provided by Simon Law Group, ensures that all post-divorce legal considerations are addressed comprehensively and in adherence to New Jersey laws.
Estate Planning Considerations
Following a Divorce, your Estate Plan should be updated to reflect the changes in your life. Failing to create a new Last Will & Testament may result in distributions of your estate in whole or in part to your former spouse, which could be against your wishes and interests and may cause strife and discord among your loved ones. We recommend contacting Simon Law Group to draft and finalize a new Estate Plan that reflects your current situation, which is especially important if you have significant property interests.
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Remaining at Home vs. Leaving
Deciding whether to stay in your marital home, which you and your spouse may have resided in together for years, can be an emotionally upsetting idea, particularly when you live with children. Further, leaving your home can impact the outcome of your divorce, as the judge will factor in how your absence affects the custody of your children, alimony payments, child support considerations, and more. Before choosing to leave your marital property behind, consult with a qualified New Jersey divorce and family law attorney who can help you navigate the next best steps for your situation and always remember safety first.
