What Usually Has To Be Divided
The assets that turn up again and again in these cases are:
- Investment and brokerage accounts
- All or part of a business or professional practice
- Several properties, here and elsewhere
- Retirement accounts and pensions
- Stock options and restricted stock units
- Deferred compensation and executive bonuses
- Trust interests
- Assets held outside the United States
- High value personal property, from art to boats
Equitable Does Not Mean Equal
New Jersey divides marital property by equitable distribution under N.J.S.A. 2A:34-23.1. Equitable means fair. It does not mean down the middle.
The court weighs things like the length of the marriage, what each of you earns and could earn, what each of you put into the marriage, the standard of living you built, the debts, and any claim that a particular asset was never marital property in the first place.
The more there is to value, the more there is to argue about. That is why these cases turn on the work done before anybody walks into a courtroom.
Valuing What Is Hard To Value
You cannot divide an asset until you know what it is worth, and in these cases that is rarely obvious. Getting there usually means:
- Full financial disclosure on both sides, in detail
- A business valuation, often by a forensic accountant
- Appraisals on real estate and high value property
- Expert opinion on compensation that has not been paid yet
- A tax analysis, because who pays what tax changes the real value of a settlement
Two qualified experts can look at the same business and reach very different numbers. That is normal, and it is why the choice of expert and the quality of the challenge to the other side's expert matter so much.
Pay That Is Not A Paycheck
Executive compensation causes more trouble than almost anything else in these cases. Stock options, restricted stock units, bonuses, deferred compensation, severance, pensions, commission and signing bonuses all have to be dealt with.
The difficulty is that this pay is not simply sitting there. It vests over years. It may depend on staying with the employer. Its value moves with the market. It carries its own tax consequences.
There is also the question of how much of it was earned during the marriage and how much belongs to work done afterwards. Getting that line in the right place can be worth more than everything else in the case put together.
When Assets Go Missing
Where there is a lot of money, there is sometimes an attempt to hide some of it. Things that should make you look harder:
- Income suddenly reported lower than it used to be
- Accounts held offshore
- Transfers to family members or friends with no explanation
- Records that are incomplete or slow to arrive
- A business whose expenses climb as the divorce approaches
- New debt that nobody can account for
A forensic accountant goes through tax filings, cash flow, business records and the movement of money to find what is really there. Where a spouse controls the business, this is often the only way the true income comes out.
The Effect On Alimony
High income changes the alimony conversation. New Jersey looks hard at the standard of living established during the marriage, and in these cases that standard can be high.
The court weighs each spouse's income and earning ability, the length of the marriage, what each contributed, what the business actually earns, and what each of you will have after the assets are divided.
Where income comes from a business or from pay that varies year to year, simply naming a salary is not enough. The real figure has to be established, and that is a fight in itself.
Keeping It Private
Litigation is public. For someone with a business, a professional reputation or a public profile, that is a real concern.
There are ways to keep the detail out of the public record, including settling by agreement and using arbitration, where a decision maker the two of you choose hears the case outside of court. Whether that is the right route depends on whether the other side is dealing in good faith. Privacy is not worth buying with a bad settlement.