What you need to know about equitable distribution in North Carolina
Equitable distribution is a method of distributing assets and debt from marriage. It can be done by agreement without going to court, but this is not always possible given it can be a contentious issue during separation and divorce.
There are a lot of factors that are taken into consideration when determining the equitable distribution of assets and debts between spouses.
If you’re going through a divorce in Charlotte, it’s important to make sure you hire an experienced lawyer who understands this complicated process.
This blog post explains what equitable distribution is and why it helps to hire a Charlotte Divorce Lawyer.
What does equal distribution mean?
Equitable distribution is a legal term that means fair or just. It’s the process where courts in North Carolina distribute property and debt during divorce proceedings.
It is not necessarily equal division of property, but rather an equitable distribution.
The value of Marital property is part of any claim for equitable distribution.
The value of the separate property is not.
Marital property and the fair market value of the marital property can be subject to disputes and therefore litigation. If deemed property acquired by either spouse during the marriage, for the benefit of the marriage, that could be considered marital property unless the Court determines otherwise.
Property acquired prior to marriage is not necessarily automatically deemed separate property.
That’s important because the value of the separate property is not considered as part of a claim for equitable distribution in NC.
The date of separation may become important in considering equitable distribution in NC.
That is particularly true in issues involving something referred to as Divisible Property.
What is Divisible Property?
Divisible property is marital property that underwent any appreciation or diminution in value since the date of separation.
As such, if the fair market value of the property improves after the date of separation, that may be deemed in certain circumstances to be divisible property.
Divisible property can be a contentious subject between the parties – Bill Powers, Charlotte Divorce Lawyer
The date of separation, relative to debt and the acquisition of debt in improvements of assets ordinarily thought of marital property, may also be part of the equation regarding what is divisible property.
The parties in negotiations, and the Court in the event of litigation over marital property issues, will consider the date of marriage in the determination of debts and assets, the date of separation, when the property acquired appreciates or depreciates, and the value of the marital property before and after legal separation as part of any ruling on divisible property.
Marital Settlement Agreements in North Carolina
Marital settlement agreements are one way in which equitable distribution can be accomplished. These types of arrangements often require a lot of work and negotiation between both parties, but they allow for a more flexible approach when it comes to the division of property during divorce proceedings.
When it comes to equitable distribution, the main question is what counts as marital property. North Carolina law defines this as any asset or debt acquired by either spouse during the course of a marriage.
This includes income earned from employment, investments, and business interests.
Value of Separate Property
Separate property is also taken into consideration when determining equitable distribution of assets. Separate property includes any asset or debt that one spouse owned prior to the marriage, as well as gifts and inheritances given solely to one party during the course of a marriage.
When the separate property becomes mixed with marital assets, it can sometimes be difficult to determine how much of the combined property should be considered separate.
Property and debts that were acquired during a marriage must be divided between spouses.
The division of marital property is often one of the most contested aspects of divorce proceedings, especially when there are significant differences in earnings or other factors related to each party’s financial situation.
It’s important to work with an experienced attorney who can help guide you through this difficult process.
Protecting your property
If you’re going through a divorce in Charlotte, it’s essential to make sure that your assets and debts are protected during the equitable distribution process.
A divorce lawyer can help you protect your assets and make sure that the division of property is done fairly.
It’s important to understand equitable distribution before going through a divorce in North Carolina.
Indeed, part of answering the question “Should I Get Divorced” should involve careful consideration of your assets and whether getting divorced makes financial sense for you and your loved ones.
That necessarily includes consideration of what is marital property vs separate property.
Marital property in NC is subject to the NC Equitable Distribution Laws, separate property is not.
There are times when people come to us, ask some questions, and thereafter decide to work on the marriage. And that’s OK. We are here to help provide information, not press for separation and divorce – Bill Powers, Charlotte Divorce Lawyer
So, if you’re interested in learning more about this process, we think it’s a good idea to seek legal counsel from an experienced attorney who understands how these types of cases work.
Hiring a Charlotte Family Law attorney like Bill Powers can help ensure that your property and other rights aren’t jeopardized by family law proceedings.
Factors considered in the division of property
Whether you’re filing for divorce or are trying to defend your rights in family court, it’s important to consider the factors that will be used when dividing property under equitable distribution in North Carolina.
The value of an asset can also be considered when determining how it will be divided under equitable distribution laws.
Another important factor is contributions made to a marriage by either party. This includes the financial contributions made to the marriage by either party.
It’s important that you understand what assets will be divided under equitable distribution laws before filing for divorce.
For example, if you own a business or work in an industry that is expected to grow in the future, it’s important to protect your interests by working with legal professionals who understand how equitable distribution works and can help safeguard your rights during this process.
“Fault” is not a factor
If you’re currently considering filing for divorce, it’s important to consider the issues that will be addressed during equitable distribution proceedings.
Equitable distribution is a legal process that can help ensure a fair division of property between spouses in North Carolina. This includes assets acquired before marriage as well as gifts and inheritances given to either party after the marriage has begun.
The Court does not take into consideration who is at fault or caused the marriage to end if one party files for divorce in North Carolina. NC is a “no fault” state, but it may be relevant to alimony and something called Post Separation Support or “PSS.”
This means that even though adultery can sometimes play a role in determining alimony, the Court will not consider who cheated during equitable distribution proceedings
We firmly believe it is important to protect your interests by working with legal professionals who understand how property division works and can help you safeguard your rights during this process.
“Equitable” does not always mean equal
It’s important to understand that equitable distribution is not the same as equal division.
In fact, equity refers to a standard of fairness and justice within the community. This means that spouses may have an unequal split when it comes to property division under North Carolina law.
Accurate appraisals are critical
An important consideration in North Carolina’s equitable distribution law is the division of assets, which can be a complex process that requires an accurate appraisal.
Divorce lawyers may recommend you hire valuation experts who can help determine whether certain properties are community property or separate property.
This includes homes and other types of real estate as well as businesses or investments owned by either party during the marriage
Why hire Charlotte Divorce Lawyers?
As Charlotte Divorce Lawyers, we believe it’s important to protect your rights during family law proceedings.
The process of equitable distribution can be complex and requires an understanding of how these types of cases work in order to ensure that you receive fair treatment under the law.
Facing divorce can be very scary for spouses who are currently considering legal separation and eventually filing for divorce.
However, with a quality legal team on your side, you can feel more confident knowing that they are working to protect your rights and interests as well as those of your family during this process.
Bill Powers is an experienced Charlotte Divorce Lawyer who has been practicing law in the State of North Carolina since 1992.
He is located in Charlotte, North Carolina, and works with clients throughout the surrounding areas including Indian Trail, Monroe, and Waxhaw in Union County, Mooresville, In Iredell County, and in Charlotte, in Mecklenburg County.
Equitable distribution is the process of dividing marital property between spouses. This can be a complex process that requires an understanding of how these types of cases work in order to ensure that you receive fair treatment under the NC family laws.
If this sounds intimidating and you want help enacting these principles, let us know.
Call the divorce lawyers at Powers Law Firm, P.A. to determine our availability to help. Prior to discussing your legal matter, we will conduct a “Conflict Check.”
Consultation fees apply for family law cases which may include things like separation, divorce, child custody, support, and ED – Equitable Distribution.Learn More
Family court judges are charged with the responsibility of categorizing assets and debts, determining their value, and distributing them in a fair, equitable manner.
That’s how Equitable Distribution works in North Carolina.
And while that may seem rather straightforward or even obvious, such matters can be deceptively complex.
Married couples going through a divorce regularly dispute the value of houses, retirement accounts, and other assets as of the date of separation.
The other side of the coin involves the apportionment of debt, which may include things bank loans, mortgages, and even student loans.
And like real estate and other things of value that may be subject to repayment of a debt, assuming such debt was encumbered during the period of marriage, the Court must consider the “joint benefit” of the degree to the parties.
What is an education worth?
There are some general rules regarding Marital Debt in North Carolina and who bears the Burden of Proof to prove what is marital debt vs. separate (individual) debt.
The NC Divorce Laws, both under the Equitable Distribution statute and appellate court case law require:
- The party alleging debt is “marital” bears the Burden of Proof
- That includes proving the amount of the debt and debt value as of the date of legal separation
- AND that any such debt was undertaken for the joint benefit of the respective parties
There is also a balancing process of sorts.
If the Family Court Judge is to classify debts associated with student loans, there must be evidence the marriage lasted long enough for the parties to the marriage to “substantially enjoy” the benefit of obtaining the degree, which normally would be associated with improved earning capacity.
That may seem a bit nebulous if not downright confusing. Calculations regarding the value of an asset or debt may be relatively straightforward, based on hard numbers on bank statements and student loan records.
Figuring out how that could serve as a future benefit to either or both parties, while subject to the rules of production of evidence, is a bit more discretionary. That’s not unusual. In family court and legal issues involving Equitable Distribution, there are many, many issues left to the sound discretion of the court.
Are gifts Marital Property?
As long as the Court (the District Court Judges) does not abuse her or his discretion in making legal rulings, they will not be overruled. The Appellate Courts will not overturn ED rulings unless the Judge abuses their discretion or otherwise rules inconsistent with their Findings of Fact.
The Judge’s ruling on ED (Equitable Distribution) is followed, unless there is an obvious, clear abuse of discretion – Bill Powers, Charlotte Divorce Lawyer
Reversing the Court’s ruling is an incredibly difficult thing to do. The appellate court would have to find the entry of judgment (the legal ruling) is not supported by reason. It would also have to be shown that the Judge’s decision was not the natural consequence of or the result of a “competent inquiry.”
Otherwise, it would have to be shown that the Judge did not comply with the NC Family Law statutes, thus resulting in an abuse of discretion.
What is considered as part of Equitable Distribution?
There is a three-step process mandated under the Family Law statutes. The Judge is required to:
That applies to both assets and debts of the parties. Classification involves determining who owns what. That means answering the question, “What is a marital asset (or debt) and what is separate property (property owned by the individual people involved)?”
There actually is another type of property to consider, which is referred to as divisible property.
Debt associated with the marriage, which is also known as “marital debt” involves debts that are incurred during the period of the marriage and prior to the date of separation. Such taking on of debt must have been for the “joint benefit” of the spouses.
The moving party (the party trying to prove the debt is “marital”) has the legal duty to prove first the value of the debt at the date of separation and that the debt was incurred for the benefit of both parties, jointly.
Are school loans “Marital Debt?”
Additional education and degrees are not technically property that can be divided. At the same time, loans incurred for education during the period of marriage may be considered marital debt. The court must also consider whether both parties to the marriage are expected to share in the rewards of a degree or education.
Student loans may be deemed marital, even if the funds are not specifically used for education alone. As such, traditional education expenses regarding tuition, books, lab fees, etc., may be deemed marital debt.
Furthermore, student loans used to pay bills, buy groceries, and even pay for the costs of childcare may also be deemed a marital debt. That’s true also for expenses associated with travel and maintenance of the household to the benefit of the marriage overall.
The moving party (the spouse seeking to have debts classified as “marital”) must present evidence regarding the marriage and whether it lasted long enough both parties to “enjoy the benefits of the degree or higher earnings.”
Does it matter whether money is kept is separate accounts?
Maintaining separate bank or savings accounts while married is not necessarily determinative of the debt/asset classification. It is relevant for the court to consider.
Whether the debt or asset is kept in the name of both or even just one of the spouses is not the sole, determinative factor. The Court, in its Findings of Fact and Conclusions of Law, is required to consider in the totality of circumstances the evidence presented.
It frankly can be a complicated process. Figuring out how long means “long enough” to “enjoy the benefits” of education is not necessarily formulaic or an exact science.
If you have questions about this or how the Equitable Distribution laws in North Carolina work, please call NOW: 877-462-3841
Will Jeff Bezos still be the “worlds richest man” after getting divorced? Maybe. A lot depends on whether Bezos and his wife executed a contract that is often referred to as a Prenup or Pre-Nuptial agreement.
Of course, Jeff Bezos may not have been the world’s richest man in the first place. It’s likely he was a part of the world’s richest couple.
All the money earned at Amazon probably isn’t “his.” Instead, it’s reasonable to assume the billions from Amazon is theirs.
That’s because wealth accumulated during the period of marriage is often considered part of the marital estate, at least that would be the case under the NC divorce laws.
Without some form of agreement to the contrary, Bezos likely only ever owned 1/2 of the reported 137+ billion dollars – Bill Powers, Divorce Lawyer Charlotte NC
Indeed, some might say the term “world’s richest man” engenders a hint of sexism. President Trump purportedly said of Bezos, “I wish him luck, it’s going to be a beauty.”
It assumes wealth earned by the man is his and anything “given” to the wife, as part of a divorce or Equitable Distribution, was his to lose.
If marriage is truly a union where “two become one,” it’s a good idea to consider the fact that if you own a 1/2 interest in an asset, you are only ever entitled to 1/2 the value of that asset, if that.
Marital estates with substantial value (real property, bank accounts, and income), where those assets were obtained during the period of marriage and not treated as separate or individual property, are often divvied up straight down the middle.
Yet, under the NC divorce laws, you’d remiss in assuming “equitable” means “equal” in every instance.
In fact, an equitable distribution may very well result in one party to the marriage getting a larger percentage of the marital assets after careful consideration of a series of different factors.
What is Equitable Distribution in NC?
The etymology of the word “equity” comes from the Latin term aequitatem, which means “equal, impartial, and fair.” Under the laws setting forth the manner of determining equitable distribution in NC, equity does not necessarily mean 1/2.
In fact, what a Family Court Judge determines to be equitable could be anything but uniformity, equality, or symmetry. The Court must consider big picture things such as:
- Amount of money at hand
- Bank Accounts
- Checking / Savings
- Liquid Assets
- Prior marital estates
- Settlements and support requirements
- Relative infirmity of one spouse
- Housing needs
- Deferred income
- Income Due
- Profit Plans / Vested Interests
- Retirement Accounts
The specifics of Equitable Distribution are set forth in the NC General Statutes in N.C.G.S 50-20. The process includes three general steps or CVD: Classification, Valuation, and Distribution.
What is Marital Property?
If an asset is classified as “separate” or an individual asset belonging only to one spouse in the marriage, its value often isn’t quite as contentious. That’s because assets determined to be separate property are not Marital Property and therefore not subject to equitable distribution.
While Courts must consider individual separate property in determining things like Alimony in North Carolina, if found to be the possession of one party and not the marital estate, ED simply does not apply – Bill Powers, Divorce Attorney Charlotte NC
The process of figuring out what is marital property vs a separate or individual asset falls within the duty of the Court to classify property. Part of that may also include an assessment of what is divisible property.
Divisible property is a way to work through fluctuations in the value of marital property, both good and bad. Divisible property involves increases (and decreases) in the value of the marital property that occur after the date of formal separation but prior to the formal distribution of assets.
“Property” may or may not specifically relate to real estate. Divisible property may involve increases and decreases in value to houses and real estate, retirement accounts, and even things like precious metals or jewelry.
Once the asset is “classified,” the next step is to determine the value of that asset. Thereafter, the Court Orders the distribution of the asset. That may involve writing a check or transferring title to cars and houses or handing over personal items.
It sounds simple enough, that is until you disagree whether you intended something of value to remain yours, and yours alone, and not part of the marital estate. And as you might understand, the value of things commonly is a source of disagreement.
Powers Law Firm PA – Divorce Lawyers Charlotte NC
If you have questions about how the divorce laws may affect you or whether Equitable Distribution in NC includes gifts from family or an inheritance, give us a ring. We’re here to help.
You may reach Bill Powers by email: Bill@CarolinaAttorneys.com
**Unlike criminal defense matters and/or those involving DVPO Domestic Violence Protective Orders, consultation fees may apply. Our law firm charges hourly rates for divorce and family law legal representation.Learn More
Who gets Fido?
You might be surprised what causes hang-ups in separations and divorce. Sometimes even deciding whether to separate involves consideration of factors that may seem unimportant, if not frivolous to some.
The other side of the coin involves assumptions about what’s fair or what the divorce laws in North Carolina say.
If you’re a pet owner, figuring out who gets the dog in a divorce (or cat or any other beloved pet) can turn out to be a big deal. You may have even waited to split up, fearful you’d be separated from an animal that is very much considered a member of the family.
Generally speaking, pets are considered property. They are not subject to ‘best-interests’ considerations like children. And that can cause problems – Bill Powers, Charlotte Divorce Lawyer
You can replace a car, the couch, or a home with another one, but you cannot replace the bond that you have created with your pet with the snap of your fingers or with a quick credit card transaction. For many folks, the family pet is a member of the family.
They’re more than property.
Indeed, given almost 70% of homes in the United States have at least one pet, it’s surprising there aren’t more disputes and protracted litigation in family court about pet custody issues.
Property division can be one of the most hotly contested aspects of divorce. Adding pets into the equation only complicates the matter. That’s one reason why proceed forward in a collaborative law fashion may be helpful.
Unfortunately, unlike child custody, the court treats pets as property. There aren’t “pet custody laws” in North Carolina. There isn’t a consideration of what is in the best interests of the pet.
As property, dogs and cats (pets) are considered as part of Equitable Distribution. That means the Judge goes through and decides:
- What is a marital asset?
- What is separate property?
- What is the property worth?
- What’s fair in splitting up marital assets?
Is a Pet Separate Property or Marital Property?
Because the court views pet animals as property, your dog, fish, cat, or pet snake may fall under the category of marital property or personal property. The division of assets, which necessarily includes real and personal property, is done so through the NC Equitable Distribution laws.
Personal property normally includes anything that either party brought into the marriage, or, more simply, anything that was purchased or acquired before the marriage. That is not an absolute rule.
In fact, there is some legal authority to argue the assumption that individual “separate” property is gifted to the marriage or otherwise becomes marital property over time. There are exceptions. Frankly, it can be a bit complicated.
“Separate Property” may include things like an inheritance or gifts that were given specifically to one or the other spouse.
Pets are Property
According to the Animal Legal Defense Fund, some courts are looking at the bond between the animal and the owner to establish custody or ownership.
Proving that the bond between you and your pet is stronger than the bond between your pet and the other owner may be accomplished in court by showing who provided more care, who took the pet to more veterinarian visits, who took the animal on more walks, etc.
Eyewitnesses, such as neighbors and friends, as well as receipts and other documentation, can be utilized for the purpose of proving a strong bond. If you do not wish to put everything in the hands of the court, you and your ex-spouse may wish to work out a sharing schedule or contract between the two of you that specifically outlines who has the pet on specific days, weeks, or months.
Charlotte Equitable Distribution Lawyers
Whether you are seeking ownership of your dog, cat, or guinea pig, the Charlotte divorce attorneys of Powers Law Firm PA understand the importance of the bond that you have with your beloved pet.
Our lawyers are available for legal consultation for separation and divorce matters in Charlotte (Mecklenburg County) and Mooresville (Iredell County).
Legal matters involving separation, divorce, and equitable distribution are subject to a consultation fee. Matters discussed and disclosed to our divorce lawyers as part of legal representation (and consultations) is confidential.Learn More