What is equitable distribution?

On Behalf of | Nov 29, 2022 | DIVORCE - Property Division |

Property division within the United States occurs under two systems. States decide whether they will use community property rules or equitable distribution.

New Jersey uses equitable distribution. The concept relies on a fair division of property, which is an often misunderstood factor.

The definition of fair

The concept of fair distribution may be unclear to some. It does not mean equal. The court does not have to ensure a 50/50 division of assets. Instead, it will consider the various factors pertaining to the assets and individuals to decide what is the most reasonable way to divide the property.

How community property differs

In community property states, the division is equal. The law states each party owns all marital assets equally, so they each have entitlement to 50% of everything.

Equitable distribution process

When dividing assets in New Jersey under the equitable distribution law, courts will make many considerations. The judge will look at each person’s financial situation after the divorce and consider how assets could help make the situation fairer. Lower-income spouses may end up with more property. It is up to the court to decide what constitutes fairness in the situation. This may not match up with what the parties want. It also could mean one person receives a lot more of the marital assets than the other.

The biggest misconception about equitable distribution is fairness. The court holds a lot of power in states using this concept, which makes it more important for couples to reach an agreement on their own to ensure they can divide assets in the way they want.