Affluent families in New Jersey often own an additional vacation home down the shore. Whether you have chosen Cape May or Asbury Park for your shore property, how much it is worth and how often you have used it during your marriage matters when you are getting divorced. Equitable distribution in New Jersey means that the vacation home is on the table when it comes to dividing your assets fairly. Knowing how that will impact you during divorce is key to getting what you want, so let’s discuss marital property laws in NJ and how vacation homes are divided.
Key Takeaways
- Shore homes acquired during the marriage are considered marital property, while those purchased before marriage may be classified as separate, though marital funds used to maintain or improve the home could impact its classification.
- Accurately determining the current market value and rental income of the shore home is crucial, as it directly affects the equitable distribution of assets.
- Options for dividing the shore home include selling it and splitting the proceeds, one spouse retaining the property and compensating the other, or co-ownership if both parties agree to shared use.
- Factors like the duration of the marriage, each spouse’s income, and any prenuptial agreements play a role in determining what constitutes a fair division.
NJ Marital Property Laws 101
Community property, where every piece of property is considered jointly owned by the couple and subject to a 50/50 split, is not recognized in New Jersey. Instead, New Jersey utilizes equitable distribution. Should you decide to get a divorce, any property that you acquired during that marriage will be equitably divided. This does not mean the split will be equal, such as one person getting the marital home and the other receiving the vacation home.
Whether you come to an agreement through mediation or go to court, the decision for who gets what is based on a couple of key factors. The court, for instance, will determine the distribution of assets based on the number of marital properties, the value of said properties, and how said assets can be distributed between both parties fairly.
Classifying Shore Properties as Marital or Separate Property
The first step in dividing a vacation home during divorce is determining whether the property is considered marital or separate property.
- Marital Property: This includes assets acquired during the marriage, regardless of whose name is on the title. If the shore home was purchased after the wedding, it will likely be considered marital property and subject to division.
- Separate Property: Property acquired before the marriage or inherited individually is generally considered separate property. However, if the home was maintained or improved using marital funds or if both spouses contributed to the property, it may be subject to partial division.
Even if one spouse owned the shore property before marriage, any increase in value during the marriage could be considered a marital asset, which can complicate matters.
Valuation of the Shore Home
If the shore property is deemed marital property, the next step is to determine the current market value. Both parties will need to agree on the home’s worth, which may require hiring a professional real estate appraiser.
- Fair Market Value: The value of the home at the time of the divorce is essential for equitable distribution. An appraiser will evaluate the property based on comparable sales in the area, recent home improvements, and market conditions.
- Seasonal Rental Income: Shore homes often generate rental income during peak seasons. If this income has contributed to the household finances, it will also be considered in the property division process. The spouse who retains the shore home may need to compensate the other for lost rental income.
This step is important. Depending on how much the shore property is worth, the distribution of assets will be impacted.
Methods of Dividing Vacation Properties
As mentioned previously, the division of property—and all other assets—is not 50/50 in New Jersey. This means that the court (or the mediator) will determine what is fair based on things like:
- The duration of the marriage
- Each spouse’s income and earning capacity
- Age and emotional health of each spouse
- Debts and liabilities
- Contribution of each spouse to the other’s earning power and education
- Accustomed standard of living
- Pre- or post-nuptial agreements
- Child custody arrangements
- Other relevant factors that may be deemed necessary
Specifically for the property, a couple of methods are used during division:
- Selling the Home: The simplest way to divide the property is by selling it and splitting the proceeds. This approach is common when both parties prefer a clean break or if neither can afford to keep the property on their own.
- One Spouse Keeps the Home: In some cases, one spouse may want to retain the shore home, especially if it holds sentimental value or generates rental income. The spouse who keeps the property may buy out the other’s interest by compensating them with other marital assets or a lump-sum payment.
- Co-Ownership: Some couples choose to retain joint ownership of the shore property after divorce, using it as a shared asset. While this can be an effective solution, it requires a high level of cooperation, and both parties must agree on how to handle expenses, maintenance, and usage.
Contact a New Jersey Divorce Attorney Today
Whether you want to keep your vacation home or sell it, Ziegler Law Group, LLC can provide the guidance you need to reach a fair resolution. Dividing a shore home requires strategy, and each property has financial and sentimental value. If you’re concerned about how your vacation home will be treated in your divorce, it’s essential to work with an experienced family law attorney. Our legal team is here to help you understand your options and develop a strategy that prioritizes you and your financial stability.
Contact us today at 973-533-1100 or fill out our online contact form to schedule a consultation. Let us help you protect your shore property and other assets during your divorce.
