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Special Property Division Issues for New Jersey Divorce Cases

Property Division

General Equitable Distribution Principles

New Jersey is an “equitable distribution” state, which means that legal matters concerning the division of marital property and assets are governed by principles of equitable distribution. Under New Jersey law, marital property is subject to equitable distribution upon divorce. The “equitable” division of marital property does not necessarily imply an equal, fifty-fifty division of marital assets. Instead, courts will conduct a “fair” division of marital property, considering relevant circumstances.

“Marital property” includes all property the parties acquired while married. Thus, assets, money, and other types of property that a couple obtains after their marriage date and before divorce are considered to be marital property subject to equitable distribution upon dissolution. Conversely, all property a spouse acquires before their marriage and after divorce is considered to be their separate nonmarital property. Nonmarital property is not subject to equitable division upon divorce.

Special Assets Subject to Division Upon Divorce

Marital property subject to equitable division is not limited to tangible assets like houses, cars, furniture, or jewelry. New Jersey courts have held that ownership interests in businesses or professional practices may be subject to equitable distribution.

Under New Jersey law, courts have subjected the following assets to equitable division upon divorce:

  • Pensions and Retirement Benefits: Public and private pensions and retirement plans like 401(k) accounts have been divided under equitable distribution principles. Contributions made or benefits accrued during marriage are considered to be marital property.
  • Life Insurance Cash Surrender: For life insurance policies, a married couple acquires during their marriage, the cash surrender value of such policies is an asset subject to equitable distribution upon divorce.
  • Employment Benefits: The income a spouse earns while married is generally considered to be marital property. However, employment benefits, such as bonuses, stock options, and paid leave, have distinct properties that are unlike ordinary job earnings. Whether certain employment benefits are subject to equitable division depends on issues such as whether the benefits in question were granted or accrued while the parties were married or whether benefits function as compensation for expected versus additional work.
  • Lottery Winnings: State lottery winnings may be subject to equitable division upon divorce if the winning lottery ticket was acquired during marriage and before filing for divorce, rather than when a party received their winnings.
  • Intellectual Property Rights: Copyrights, trademarks, and patents may also be equitably divided in divorce cases. Royalties, licensing fees, or other income derived from intellectual property—such as statutory damages in an infringement case—are considered marital property if acquired or established during the parties’ marriage.
  • Personal Injury Damages: An award for damages may qualify as marital property that will be divided in a divorce case. The exact nature of a damages award determines whether it constitutes divisible marital property. Damages that compensate the plaintiff for economic losses—such as medical expenses and lost earnings—can be divided as a marital asset if the parties used marital income to initially cover such costs, or if the plaintiff’s lost earnings involved income they would have received during their marriage. In contrast, damages that compensate the plaintiff for noneconomic harms they suffered on a more personal level—such as pain and suffering—are no distributable for equitable distribution purposes.

Contact DeTommaso Law Group, LLC for Effective Legal Representation

If you have filed for divorce and have high-value assets or sophisticated financial products, you should retain the services of an experienced New Jersey divorce attorney from DeTommaso Law Group, LLC for legal advice. We have experience resolving legal disputes concerning New Jersey family law, including the equitable distribution of marital assets. You can count on us to protect you and your family’s legal interests.

To schedule a consultation to determine your legal rights and options, call our office at (908) 274-3028 or contact us online today.

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