In a New Jersey divorce, the family home may be sold, awarded to one spouse, or even temporarily retained by one spouse. As such, if you and your spouse have made the difficult decision to end your marriage, understanding how each option works is critical. Please continue reading to learn what happens to the family home during a divorce in New Jersey and why connecting with our determined Edison Property Division Lawyers is in your best interest.
Is New Jersey an Equitable Distribution State?
For many, there is a common misconception that, during a New Jersey divorce, all assets will be divided equally among the couple. However, as New Jersey adheres to equitable distribution laws under NJ Rev Stat § 2A:34-23.1, this is not the case.
What Equitable Distribution Means Under New Jersey Law
In the event of a divorce, the courts will distribute marital property in a manner that is fair, but not necessarily equal. In other words, the court has no obligation to split your marital property 50/50. Instead, how the court divides joint property depends on what the court believes is just, based on each spouse’s contributions to the marriage. The court will examine several factors to determine a distribution that is fair based on the unique circumstances of the case. Some of the factors a New Jersey court can take into account are:
- The duration of the marriage
- The age and health of each spouse
- The income and earning capacity of each spouse
- The standard of living during the marriage
- The debts and liabilities of each spouse
- The tax consequences each spouse may face because of the division
- Child custody and economic needs of the children
- Any other factors deemed relevant by the court
Is the Family Home Marital or Separate Property?
When determining who gets certain property, including your house, the New Jersey court will need to identify whether assets are separate or marital.
- Marital property refers to assets acquired by both spouses during the marriage
- Separate property refers to assets owned by an individual spouse before the marriage or acquired through inheritance or gifts
When the Family Home Is Considered Marital Property
A family home is typically considered marital property when:
- It was purchased during the marriage
- It is paid for with marital income
- Both spouses’ names are on the deed
When the Marital Home Is Considered Separate Property
A home is generally deemed separate property if:
- It was owned by one spouse before the marriage
- It has been maintained without contributions from the other spouse
- It was acquired through an inheritance or gift
How a Separate Home Can Become Marital Property
Separate property may become marital property if it is commingled, meaning it was separate property but has been intertwined with marital funds or joint efforts by both spouses. As such, a separate home may become joint property if:
- The title is transferred to both spouses during the marriage
- The mortgage is paid for with marital funds
- There is an increase in value from marital efforts
- Jointly held funds were used to pay for renovations
Who Gets to Keep the House in a New Jersey Divorce?
In New Jersey, the courts will not automatically award the home to either spouse, as there are a number of factors that must be considered first. If no agreement can be reached, the court may order the sale of the home.
Factors the Courts Consider When Deciding Who Keeps the Home
When examining how to handle a family home, New Jersey courts will consider:
- The ability of both spouses to afford the home independently
- Each spouse’s financial contributions
- The presence of any minor children
- The overall fairness of awarding one spouse the home as opposed to selling it.
What Are the Main Options for Dividing the Family Home?
After you have classified your home as marital or separate property, you have a few options as to how to distribute it: a spousal buyout, sale of the home, or a delayed sale.
Option 1: Spousal Buyout
Generally, when a marital asset like a home is split, it’s not uncommon for one spouse to “buy out” the other’s share of the home. This generally entails:
- Having the home professionally appraised
- Calculating equity after mortgage debts
- Refinancing of the mortgage from the buying spouse.
Common Challenges With a Buyout
- Refinance denial as a result of low income or low credit scores
- Higher monthly mortgage payments
- Additional expenses, like closing costs and title fees
- Liability if refinancing is not completed
Option 2: Selling the Home
If neither spouse is willing to part ways with the home, the court may order the sale of the house, with the proceeds of the sale divided among the couple in accordance with the equitable distribution split.
Downsides of Selling the Family Home
- Sales can delay financial closure
- Current market conditions can reduce equity
Option 3: Delayed Sale of Home
Depending on the unique circumstances of your case, you and your spouse may delay the sale of the home while one party resides on the property. Typically, the sale will be scheduled for a later date. This is often an ideal option for families with children nearing graduation.
Risks of a Delayed Sale
- Continued joint mortgage liability
- Damage to credit if one spouse misses payments
- Continued financial entanglement after the finalization of the divorce
How Custody Affects Decisions About the Family Home
Dividing the family home can be complicated, especially if you have minor children. In many cases, custodial parents wish to remain in the home to avoid uprooting the children. As such, the courts must consider a number of factors to determine whether or not to permit a parent to remain in the home temporarily.
When New Jersey Courts May Allow a Parent to Temporarily Remain in the Home
- Children reside in the home
- Stability outweighs the short-term financial efficiency
- A sale timeline has been established
- The arrangement is financially sustainable for both parties
Contact Our Experienced New Jersey Property Division Attorneys
At Arndt & Sutak, LLC, we are prepared to help you fight to maintain ownership of your home. Whether you need assistance negotiating with your spouse or presenting your case to a judge, you can trust us to handle your divorce. Connect with our firm today to schedule a consultation.
