Discussions about money can bring out the worst in people. While many New Jersey residents think along the lines of “what’s yours, is mine” during marriage, this does not necessarily follow when it comes to divorce. The decisions about how to divide assets or debt may be dependent on a number of things.
The first step is to make two lists. One list should be of all assets owned, both jointly and individually, and the other a list of all debts. As well as noting the values of each item, details about how and when each asset or liability was acquired are also relevant. Those assets which were brought into the marriage individually will remain with that spouse. Does it then follow that everything else is simply split down the middle?
Not necessarily; for example, the marital home is often the largest asset a couple owns, the net value of which is calculated by subtracting the amount of the mortgage debt from the amount of the property’s value. There could be another substantial asset, for example a retirement plan, which on the face of it could have the same financial value. The choices are for each spouse to take one asset, or split both assets equally. Whoever takes the house also has to maintain both the property and the mortgage payments, as well as taxes and other property-related expenses, which could be an inadvisable move if one has to rely on child support payments in order to do this. On the other hand, it may not be possible to split a retirement plan, and even if it is, there may be tax implications that one also has to take into account.
Good record keeping will help to clarify matters of ownership and responsibility. In addition, maintaining a civil relationship and open dialogue with one’s ex-spouse may smooth the process considerably. Divorce finances can be complicated, but with the appropriate advice, it is possible for New Jersey residents to achieve an equitable settlement.
Source: CBS Boston, “Breaking Up Is Hard To Do: Are You Splitting Assets Or Debt?“, Dee Lee, Aug. 29, 2017