Division of Property and Debt: Equitable Distribution in a North Carolina Divorce
One of the most important issues facing couples during divorce is how to divide property. It’s not always an easy decision, especially when one spouse makes significantly more money than the other or one party has amassed substantial assets while the other has little or nothing. Deciding who gets what can be emotionally trying and requires some level of financial disclosure.
An equitable distribution award in North Carolina also tends to be very complex and can involve many property types, including things like real estate, homes, and vacation houses, savings accounts, checking, cash on hand, vehicles, etc.
An equitable distribution award in North Carolina is not necessarily based on which spouse has title to assets, but rather on what determined to be part of the “marital estate.” The court, considering all martial assets and marital debts, makes a determination as to what is fair and equitable.
For example, if one spouse was responsible for acquiring an asset during marriage or adding substantial value to an asset acquired prior to marriage (by paying down a mortgage for example), then the asset may be subject to equitable distribution.
Once the court has made an order dividing real and/or personal property, either spouse is entitled to receive payment of a distributive award from the other spouse to equalize possession of assets associated with the marital estate.
Five things to know about equitable distribution in North Carolina
1. Equitable distribution is the legal term used to describe the process of dividing marital property between spouses upon divorce in North Carolina.
2. Marital property, as defined by N.C. Gen. Stat 50-20, includes all income and assets acquired during marriage by either spouse or both spouses along with any increase in value of non-marital assets caused by marital labor or expenditures.
3. It can be complicated, if not difficult to understand. It’s important to understand the distinction between personal and real property; the categorization (or “classification”) of property; and the valuation of property.
4. Property acquired during marriage is presumed to be marital, even if only one spouse’s name appears on the title or deed. One exception may be possible when it can be shown that specific non-marital funds were used to pay for a particular item of personal property.
5. While popular opinion often assumes otherwise, non-marital assets are not divided at the time of divorce in North Carolina, but rather remain with their original owner. This is another reason why having a prenuptial agreement before marriage can be helpful.
For information on equitable distribution in North Carolina, please contact the Powers Law Firm, P.A. to schedule your private, confidential consultation. Consultation fees apply for family law matters, including but not limited to legal matters involve divorce, child custody, equitable distribution, and support.
This article contains general legal information and is not intended as legal advice with respect to any specific facts or circumstances.
What does equal distribution mean?
An “equitable” split is not always exactly 50/50. The court may award unequal distribution in favor of the spouse when there are special circumstances.
What about marital debts?
Debts are divided in North Carolina by equitable distribution, and not necessarily by title or named debtor. For example, if John and Jane Doe were joint owners of a loan on a house, they would be equally liable for the debt with respect to distribution rights.
Furthermore, a creditor looking to collect a joint debt could proceed against either or both spouses even if only one spouse’s name appears on the mortgage or deed or other promissory note.
What about separate property?
In North Carolina, separate property includes: 1) property acquired before marriage; 2) property acquired by gift or inheritance during the marriage; and 3) portions of personal injury awards. Separate property may not be distributed by divorce in North Carolina, but remains with its original owner.
What about social security?
Retirement benefits such as social security do not pass through equitable distribution and are treated as separate property.
Charlotte Equitable Distribution Lawyers
If you have questions about what is part of a marital estate, who is responsible for debt in a divorce, and your individual rights regarding marital assets, please contact the Powers Law Firm, P.A., in Charlotte, North Carolina.
Equitable Distribution in North Carolina is notoriously complicated and, as such, may serve as a point of contention in a divorce. We think it’s important to approach the marital estate holistically – Bill Powers, Divorce Lawyer in Charlotte
Determining what is separate property and a martial asset deserves close attention to detail by a forensic accountants, business appraisal experts, and real property appraisers, as the fact-pattern indicates.
Call our Charlotte divorce lawyers now to determine the availability for representation.
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Prior to undertaking any matter for representation, our firm performs a conflict check. Consultation fees apply for family law matters, including but not including to legal issues involving separation, divorce, Equitable Distribution, Domestic Violence Protective Orders “DVPO” or “50B” Orders, and other matters involving child custody, child support, and Post Separation Support.
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