Marital property and debt are divided according to the North Carolina laws of equitable distribution. In brief, equitable distribution means that marital property and debt must be divided in a way that is fair and equitable. The law presumes that property will be divided equally between the spouses, but that does not necessarily mean that everything will be divided in half. North Carolina law presumes that an equal division of marital property.
Divorcing spouses’ property must first be classified as marital property or separate property. These are legal terms defined by statute. Generally, marital property is property acquired during the marriage and before separation; however, there are a number of exceptions. Separate property is generally defined as property owned before marriage, or inheritances or gifts received during marriage.
Again, there are exceptions. Only marital property can be divided and distributed. Once the marital property is identified, it must be valued. Depending on the property being evaluated, it can be as simple as determining the value of stock by looking online or as complex as undergoing a professional business valuation for a family business. Next, assets must be distributed according to their value, and tax consequences must be considered. For example, a home with $200,000 in equity is not necessarily equal to a retirement account with pre-tax money in the same amount.
There are factors, however, that can enable the court to divide marital and/or divisible property unequally if the court determines that an equal division would not be equitable. These factors include:
- The income, property and liabilities of each party at the time the division of property is to become effective.
- Any obligation of support arising out of a prior marriage.
- The duration of the marriage and the age and physical and mental health of the parties.
- The need of a parent with custody of a child or children to occupy the marital residence.
- The expectation of pension, retirement or other deferred compensation that is not marital property.
- Any equitable claim to marital property by the party not having title.
- Any contributions made by one spouse to educate or develop the career potential of the other spouse.
- Contributions to increase the value of separate property, which occurs during the marriage.
- The liquid or non-liquid character of marital or divisible property.
- The tax consequences to each party that would have been incurred if the property had been sold or liquidated on the date of valuation and, in the court’s discretion, whether such tax consequences are reasonably likely to occur.
- The acts of either party to maintain, preserve, develop or expand marital property or to waste, neglect, devalue or convert marital or divisible property.
- The death of either party prior to the entry of an Order.
- A husband and wife can enter into a Property Settlement Agreement that distributes marital and divisible property and, accordingly, eliminate the need for an equitable distribution proceeding.
- Any other factor the court finds just and proper.
At Turner Law Firm, PLLC, we know that the rules of equitable distribution provide a lot of leeway for creative agreements or arguments regarding marital property and debt division. We also know that property division can have a tremendously positive or negative impact on a newly divorced person who is establishing a new financial life.
Property matters, business interests, debt division and how various assets can best be allocated or divided between the spouses fairly. We also have the ability to partner with experienced financial planners and tax advisers when necessary to complete the picture in Court, or while negotiating, to help you achieve the best division possible under the facts of your case.
North Carolina Property Settlement and Equitable Distribution Guidelines: NCGS §50-20 Distribution by court of marital and divisible property.
At Turner Law Firm, PLLC, our attorneys are compassionate toward our clients and protective of their financial and legal rights. We understand that each client is unique, and our law firm’s attorneys have strengths that can be matched to your specific needs and circumstances.