A common misconception is that New Jersey divorces necessarily result in a 50/50 division of assets and liabilities. That’s not really the case. In this video, New Jersey divorce attorney Jordan Rickards explains why.

Below is a transcript of the above video.

“Hey everybody. I want to go through one of the more popular myths in New Jersey divorce law, and that is that New Jersey is a 50/50 divorce state. It’s one of those things that just kind of sounds right when you say it and it hits the ear the right way, but unfortunately there’s very little truth to it, and I’ve identified at least four reasons why that’s wrong and arguably even a fifth reason, and I’m going to go through them with you right now.

All right, so number one, New Jersey is not even called a 50/50 state or community property or any of that sort of stuff. New Jersey is called an equitable distribution state, and I’ve kind of discussed another videos what that means, which is that the judge has a wide degree of latitude to divide the marital state and make decisions with respect to the marriage and the divorce that he simply thinks is fair.

So one of the reasons that a lot of divorce attorneys sometimes we have difficulty when we’re asked to predict very, very specific scenarios is that every judge is different, every county is different, and you’re kind of being asked to read the minds of people who a lot of times aren’t even family law judges for very long. Family law judges tend to only sit for a couple of years before they get moved to a different division. Often they didn’t even practice family law before they became judges, and so it’s kind of a bit of a guessing game.

We can make approximations, we can rely on our experience, which is more the reason why you actually need somebody who’s very experienced in this sort of thing. But it’s very difficult a lot of times to predict things with specificity. Certain things like child support we’ve discussed are very rigid and use calculators and things. But other times, you’re just trying to guess at a judge’s subjective idea of fairness.

Now, as a practical matter, in terms of your assets and your debts, those are probably going to be divided 50/50, at least insofar as they were acquired during the marriage. But let me explain why sometimes the math actually doesn’t work out to 50/50.

Let’s just take a hypothetical marital estate of marriage. That’s what we’re talking about. Let’s say two people who are married and they’re in their early 50s or something. They’re getting divorced, and their marital marital estate, which is to say the net value of their assets is a million dollars. And I’m just going to use that example because it’s a nice round number and it’s easy to work with.

But in central New Jersey, in Middlesex County where I am or some are set right above or Monmouth right below, a million dollars of net assets is not a ton of money. If you factor in the value of your house and the factor your 401k, your IRAs, things like that. That’s a fairly modest net worth. It’s not like you’re living on Easy Street. So we very commonly get marital estates that are worth roughly a million dollars. But what I’m about to tell you applies equally in fact to marital estates of all values. But let’s just use a million dollars for an example.

So right off the top, before you do anything, you’re going to hire an attorney in all likelihood, and your attorney’s fees and your spouse’s attorney’s fees by the end of this thing could be easily $50,000. And I’ve seen cases where it’s way worse than that. I’ve had people who have hired me who have already started a divorce with somebody else and they’ve gotten nowhere and they’ve already blown through $150,000, which is insane. But on a real divorce, even without a trial, it’s not uncommon for both sides to spend $20,000, $25,000 in attorney’s fees and appraisers and a best interest valuation, that sort of thing.

Well, let’s just take that $50,000 right off the top. So you had a million dollar estate. Now that estate is $950,000, so your 50%, which used to be half a million, is now $475,000. So right off the bat you’re not getting 50%, you’re getting 47.5% because you’ve given your lawyer and all these experts about 2.5% of the estate. So that’s number one.

Number two, let’s say you’re the higher earning spouse. Let’s say you make roughly $150,000, and we’ll just say that’s the husband, and the wife makes $50,000 because she works part-time or whatever. That’s a difference of $100,000, and I’ve explained in other videos how we calculate spousal support. We usually take 24% of the difference in income. So just quick math, you make 100,000 more than she does, you’re probably going to pay $24,000 a year in spousal support. And let’s say that goes on for 10 years, and it could go on for more, but let’s just say 10 years.

Well, now you’re paying $240,000 extra, and guess what? That’s all coming out of your half. So it’s not like you went into this with a million dollars and then there’s suddenly some other pool of money. It’s like, no, this money is just coming out of your pocket. And so if you’ve already factored out the 25 grand you’ve spent on your lawyer, and now you’re going to factor out another $240,000, now you’re down to $235,000, or 23.5% of the marital estate instead of 50% of it. And you might think, “Well, I can pay that off over time.”

Yeah, that’s true, but there’s also a present value to that. And what stinks about spousal support, at least if you’re the payer, is it’s a new asset. It’s a new, or depending on whether you’re getting, it’s a new debt. So it’s a debt to the payer and an asset to the person that’s just created out of thin air. It’s not like an IRA which you’ve accumulated during the course of a marriage, which now you’re just going to divide up and she’ll take half and you’ll take half. This is a whole new category where now you’re suddenly liable for this payment. And a lot of times what the payer spouse will do and sign the pay is they’ll agree on a lump sum buyout.

Well, you can argue whether that’s better or worse, and it depends on the buyout, but the bottom line is that shows you that there’s a present dollar value. So when you look at the value of your estate, you got to also factor in or factor out the spousal support obligation.

Now, you also have to think about what’s called the pendente lite expenses, and pendente lite means pending litigation. So a divorce in New Jersey typically will take over a year and more commonly close to two years. And what I’ve seen now is several counties, I think six counties I just read the other day, aren’t even doing divorce trials. If you’re in Somerset County. And as I’m making this video, it’s now February of 2023, Somerset County, if you ask for a divorce trial and your case is basically already done, they’re not even going to schedule it until 2025.
So your cases, the cases that used to take a year are now taking two years. Cases that used to take two years are taking three or four years. All right? And during that time, you have to maintain the marital status quo. Well, let’s say living at home is an untenable situation, which is why you’ve gotten divorce or you’re filed for divorce in the first place, so now you’ve moved out and your wife and kids are still in the marital home.
Well, guess what? You’re going to still be paying at least a large portion of the upkeep of the marital home, and you’re going to be paying for where it is you’re living at the same time. So you’re basically doubling your living expenses, and that’s going to be the case as long as you are in this pendente lite purgatory where you are not really married, but you’re not really divorced yet either. 

So factor that out also. If you’re paying $3,000 a month in carrying charges on the marital estate, and now you moved out into a new apartment, which you have to get one big enough for your kids too when they visit, and you’re paying 3000 a month for that, well, that’s another $36,000 of an additional expense that went down the hole. And if you’re divorcing for two years, that’s over $70,000. Three years, you’re talking about basically $100,000.

So if you want to factor that out of the math we did before where we were already down to $235,000 in your marital estate, take another a $100,000 off the top of that and you’re down to $135,000. So you thought you were getting 50%? No, you’re down to about 13.5% right now.
Why am I telling you this? It’s not to scare you, it’s to emphasize the importance of having superior representation. Somebody who is, and yeah, I’m being a bit of a salesman here, but somebody who does this constantly. A lot of the worst divorces I’ve seen aren’t just people who try to represent themselves, though that’s bad enough. But people who hire lawyers who maybe they’re a family friend or something, but they’re not really that experienced in divorce law.

Guys, if you needed heart surgery, you wouldn’t hire a podiatrist. You wouldn’t hire somebody who really wasn’t that experienced in cardiology. But he was a doctor anyway. You really need somebody who’s constantly in divorce court like I am and several other attorneys. All right? Because this can become a really bad situation.

If you go into a divorce thinking you’re just automatically going to get 50%, I’m sorry. I really hope that through this video I’ve been able to disabuse you of that. And that’s really, that’s just all we’ve really talked about today are the assets and the debts. I haven’t even gotten into parenting time. Which listen, I’ll be honest with you — and I mentioned this in my video called the Seven S’s of Custody and Parenting Time in New Jersey, and if you haven’t watched it, I really recommend that you go watch it if you’re going through a custody battle right now —
but New Jersey is supposed to be a 50/50 state in terms of custody. But as a practical matter, I’m telling you, if you’re the father, it’s much harder for you to get 50%. In a lot of these divorces, it’s basically like it’s 50/50 in terms of that’s sort of the father’s high watermark and the mother’s low watermark.

The father has to fight to get 50/50 and the wife really isn’t going to do worse than that. And again, in that video, I explain why that is. I explain really the different strategies to combat that. And we can talk all day long about whether or not that’s fair and how the system can improve and things like that. And that’s a nice conversation to have. But ultimately, it’s also a frivolous one because we’re stuck in a system that exists.

So that’s all the more reason why you should spend the money, hire a capable attorney. They say that divorce attorneys are expensive. Guys, there’s nothing more expensive than not having a divorce attorney. Trust me. A divorce is a bad situation, but it can go from bad to bankrupt pretty quickly if you don’t know what you’re doing. All right?

So listen, if you want to talk about your divorce case or your pending divorce or if you have any questions, give my office a call. I’ll be happy to help you. All right, guys, thanks for watching, and have a good day.”