Divorce Mediation and Equitable Distribution: The Second Step

As part of our continuing series on divorce mediation with Equitable Mediation Services here in central New Jersey, this installment will focus on the Equitable Distribution of Marital Assets. Having gotten through in our first session the majority of the Parenting Plan (for those couples with children) we move on to the next step in the process which is a little more complicated.  Most couples can agree to do what’s in the best interest of their children but when it comes to “who gets what” the story changes.  It is amazing how important that toaster oven becomes when someone is told they can’t have it.

What does the “Equitable Distribution of Marital Assets” mean in plain English?  Basically, this is the part of divorce mediation where we take the assets (and liabilities) you and your spouse have acquired during your marriage and divide them.  Does this mean they will be split 50/50?  Not necessarily.  The term equitable is defined as “Exhibiting or characterized by equity; impartial or reasonable in judgment or dispensation; not necessarily equal or the same.” Notice that nowhere in this definition does it say 50/50.  This is a common misconception that many couples going through divorce mediation in the State of New Jersey have.

You see an item may have more value to one individual than another and these value judgments can be used to in effect “trade-off” among the parties in order to create a settlement that is fair to both sides.  I use the following example from my article on Equitable Distribution:

NJ Equitable Distribution: An Example

Let’s say a couple that has been married 25 years has two items each of sentimental value – the husband’s collection of antique clocks that he’s collected for the past 15 years worth $2,000 and the wife’s collection of rare lamps that she has collected for the past 20 years worth $10,000, both marital assets by definition. In this example, if the husband had a sentimental attachment to his clocks and was fully aware that by agreeing to relinquish his share of the lamp collection ($5,000) so that he may garner his wife’s share of the clock collection ($1,000) he effectively gives up $4,000 in additional assets to his former spouse, the courts will not seek to adjust the distribution. And while in these situations, typically the discrepancy in assets is equaled out somewhere else (perhaps through additional funds from a bank account) it is not mandatory and the disparity can stand and as long as each party understands the differences and considers the overall distribution of property, fair and equitable, regardless of the total at the bottom of the “balance sheet.”

One of the benefits of mediation is that it allows the parties to decide what they feel is important, fair and has value and factor those judgments into their thinking and negotiating.  They do not have a judge or an attorney telling them to try and grab everything they can because really at the end of the day fairness is in the eye of the beholder and if the toaster oven really isn’t that important, then why bother fighting over it?   Like with assets, liabilities are equitably distributed in the same way.  The parties will each be responsible for “their share” of the liabilities incurred during the marriage in a manner and arrangement they both agree is fair and equitable.

So where does this discussion on equitable distribution leave us? That is truly up to the couple to decide. While NJ law does provide some guidelines, the concept of equitable distribution is truly based on what the couple considers fair and reasonable. Once you’ve had a chance to review the New Jersey Equitable Distribution Criteria, you will see the factors are as varied as the possessions that may require distribution so it’s always best to come to an agreement that works for both of you rather than leaving it to the courts, attorneys and judges to decide.