Going through a divorce requires that you split up the things that you accumulated in the marriage. This isn’t always an easy task, but it’s necessary if you want to legally end the marriage.
For most people who are going through the property division process in New Jersey, mediation will help them decide what’s happening. If this doesn’t work out, going through a divorce trial is always possible.
#1: New Jersey uses equitable distribution
New Jersey is an equitable distribution state, which means that property doesn’t have to be divided exactly equally. Instead, it should be divided based on what’s fair. You may have to use smaller assets to balance out the distribution of the smaller assets. With very few exceptions, anything that was accumulated in the marriage must be divided unless there are things covered by a prenuptial agreement.
#2: Retirement accounts require special documentation
Some retirement accounts are subject to penalties or taxes if they’re taken prematurely. In the case of a divorce, you can have retirement accounts split without those penalties or taxes. This requires you to get a qualified domestic relations order that lets the plan administrator know exactly how to divide the account. There are special conditions that are present for these, so you must ensure that you understand what’s allowed with the QRDO.
#3: Debts must be divided
Marital debts must be taken care of during the property division. There are two primary ways you may be able to do this. One way is to sell assets to pay the debts so both parties can have a fresh start. Debts might be divided between parties, but there’s a risk that one person’s credit will suffer if the other person doesn’t pay. Creditors aren’t part of the divorce so they can still go after both parties if things accounts aren’t paid, so it’s usually best to get them paid if possible.
One of the most important things for you to remember is that your divorce settlement can have a profound impact on your future. Working with someone familiar with your situation and who can help you to determine the options you have and how each might impact your current situation and the future.