In any divorce, the house is usually the largest asset that needs to be divided.  If the house was purchased during the marriage, then the available options are easy to identify.  If it is a pre-marital asset, it becomes much more complicated.  For purposes of this article, I will assume that the house was acquired during the marriage.  

There are going to be one of three scenarios with your house:  It either has equity,  it doesn’t or it has a little equity.  Equity is determined by taking the value of the house and subtracting the mortgage(s).  The value of the house is usually determined by an appraisal company.  They can run $250 to $500 and they value in quality and dependability.  Your attorney should have several that he or she relies upon.  Both sides usually chip in to get one appraisal although either side can get their own.

Scenario One – little equity in the house

There is equity and then there is equity.  If the value of the house is $310,000 and the balance of the mortgage is $300,000,  then there is little to no equity in the house as the sale price subtracted by real estate commissions and other expenses associated with the sale will eat up all of the equity in the house.  This is a complicated situation and your attorney will be in the best position to advise you on your options.  The bottom line is that each side does have equity in the house that should balance out somehow.

Scenario Two – equity in the house

If there is equity in the house, then the entire case should be a little easier.  You can either sell the house and split the proceeds or one side can buy out the other.  Again, your attorney should be able to guide you through this process.

Scenario Three – no equity in the house

This is tough.  Rarely does a couple owe the an amount that is the exact value of the house.  Instead, they are usually underwater which means that a sale of the house will leave the couple still owing money (this is called a short sale).  Clearly, selling the house will be a disaster.  In these situations, foreclosure and bankruptcy are considered.  The best thing to do is to work with both your attorney and your spouse’s attorney to brainstorm how this situation will be handled. 

If you are ready to divorce different, call Jef Henninger today.  Jef can represent you in your divorce case in any New Jersey Court including Mount Holly, Trenton and Camden.

Equitable distribution is division of marital property or assets. In order to divide the property, we first have to identify the assets, then we value them and then they are distributed.  In general, it doesn’t matter who purchased the asset or whose name it is under as New Jersey law recognizes the spouses as an “economic partnership.”   However, equitable distribution applies to all assets acquired during the marriage and not assets that were owned prior to the marriage. Assets subject to equitable distribution include real estate, jewelry, mutual funds, stock options, bank and brokerage accounts, retirement assets, small businesses, all the way down to plates and forks.  

N.J.S.A. 2A:34-23 (h) and N.J.S.A. 2A:34-23.1 are the two major statutes that govern equitable distribution.  Theses statutes list fifteen factors but allows the court to consider any other additional factors it may deem relevant:

1. The duration of the marriage;
2. The age and physical and emotional health of the parties;
3. The income or property brought to the marriage by each party;
4. The standard of living established during the marriage;
5. Any written agreement made by the parties before or during the marriage concerning an arrangement of property distribution;
6. The economic circumstances of each party at the time the division of property becomes effective;
7. The income and earning capacity of each party, including educational background, training, employment skills, work experience, length of absence from the job market, custodial responsibilities for children, and the time and expense necessary to acquire sufficient education or training to enable the party to become self-supporting at a standard of living reasonably comparable to that enjoyed during the marriage;
8. The contribution by each party to the education, training or earning power of the other;
9. The contribution of each party to the acquisition, dissipation, preservation, depreciation or appreciation in the amount or value of the marital property, as well as the contribution of a party as a homemaker;
10. The tax consequences of the proposed distribution to each party;
11. The present value of the property;
12. The need of a parent who has physical custody of a child to own or occupy the marital residence and to use or own the household effects;
13. The debts and liabilities of the parties;
14. The need for creation, now or in the future, of a trust fund to secure reasonably foreseeable medical or educational costs for a spouse or children;
15. The extent to which a party deferred achieving their career goals.

When a court makes a ruling on equitable distribution, the court must make specific findings of fact based on the three step process that I outlined  above, i.e., (a) what assets are part of the marital estate; (b) what is the value of each asset; (c) the manner in which it should be distributed.  The value of each asset is determined at the date of the complaint and not the time that the ruling is made.

Except real estate and other major items, courts generally do not get involved in dividing furniture and other small items.