Complex Property Division in New Jersey
New Jersey law calls for the equitable distribution of property, but separating spouses can rarely agree on the proper definition of equitable at the beginning of divorce proceedings.
September 10, 2010
Dividing property will always be one of the most challenging aspects of a divorce. New Jersey law calls for the equitable distribution of property, but separating spouses can rarely agree on the proper definition of equitable at the beginning of divorce proceedings.The division of property becomes even more challenging when the marital estate includes assets that have accumulated during marriage but have not yet fully matured.
For example, consider the division of stock options. When stock options are granted during a marriage but will not vest until after the divorce, how should these assets be divided? What if stock options are granted after a divorce, but offered in recognition of service that occurred during a marriage?
In New Jersey, the division of stock options in divorce proceedings depends upon the particular situation. When reviewing stock options, courts will consider whether the asset at issue is the result of efforts during the marriage by the spouses jointly, or whether the options are offered in recognition of services after the marriage. If the stock options are provided because of past performance during the marriage, they must be included in the marital estate even if they are awarded after the divorce.
In addition to stock options, pension plans and retirement accounts must also be considered part of the marital estate. The fact that an individual's right to access these assets has not vested or matured at the time of divorce does not eliminate the other person's interest in the portion of the assets accrued during the marriage. Generally, the portion of a pension that is acquired during a marriage is subject to equitable distribution.
Furthermore, highly-compensated employees may have other forms of deferred compensation that must be considered at the time of divorce, such as restricted stock.
When dividing these assets, it is not enough to examine the present value and separate accordingly. The retention or surrender of any assets may have significant tax ramifications for both spouses, and these consequences must be considered when evaluating the plan for property division.
Because of the complexity of these matters, it is important to work with a knowledgeable family law attorney who has experience handling challenging divorces. Before making any decisions regarding the division of property, make sure to speak with a divorce lawyer.
Article provided by Laufer, Dalena, Cadicina, Jensen & Boyd LLC
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