For divorcing couples, understanding how property division works can help spouses exercise their legal rights and guide critical decisions for their financial futures. When a marriage ends in North Carolina, the property is divided by equitable distribution. This is a system of property division in which a court takes the fair market value of all of a couple’s marital property and divides it equitably.
While equitable distribution is complex, the basics can be explained by answering three questions:
- Is the property marital property?
Marital property is property acquired by spouses during their marriage. In contrast, separate property is the property that each spouse had before the date of marriage or earned after the date of separation. The distinction is critical because when courts enter equitable distribution orders, they are only allowed to include and divide marital property. Separate property remains the sole property of the spouse who brought it into the marriage or earned it after the marriage ended. Notably, there are several exceptions to these principals—like inheritance or when separate property becomes co-mingled with marital property.
- What is the property worth?
Courts take the total fair market value of all marital property before distributing the value between the spouses. This makes the accurate appraisal of property a key to fully exercising your property rights. Generally, the more complex the property, the harder it is to appraise. For example, family-owned business interests don’t have a price tag and are much harder to assign a value than a car. Therefore, we partner with experts when it comes to appraising complex or high-value assets.
- Is the division equitable?
When dividing marital property, a court is required to split the value of the property equally between spouses, unless it makes a finding that an equal split is not “equitable.” If a court makes an equitable split, it must consider a variety of factors, including:
- the income and debt of each spouse,
- the retirement savings of each,
- support obligations from prior marriages,
- the duration of the marriage,
- the needs of the parents,
- whether one parent will remain in the marital residence with the children,
- contributions of spouses that increased the value of separate or marital property,
- contributions of a spouse to the education or career of the other,
- the liquidity of marital property or complexity in appraising property,
- the tax implications of the division,
- acts of a spouse to defraud, waste, devalue, or destroy marital property, and
- any other factor the court finds to be “just and proper.”
Preparing with Your Lawyer
Even though courts are operating on a limited schedule in North Carolina right now, we can still file your claim for equitable distribution, and remember: it must be filed before your divorce is granted! There are many ways to approach an equitable distribution claim, and the first is always to attempt family financial mediation. Therefore, we are tackling equitable distribution cases per usual at this time, even with the courts being closed to longer, more complex hearings.
- Consulting with an attorney. The attorneys at New Direction Family Law offer comprehensive virtual consultations and can help you evaluate your options.
- Tracking down your property and records. As discussed above, the classification and appraisal of property is a big deal. You will work closely with your attorney to create a complete inventory of marital property and to find records that can help identify the property, establish when it was acquired, and appraise it.
Let New Direction Family Law Assist You
Contact New Direction Family Law if you need help ending your marriage. You have significant legal rights and need an attorney who understands how to advocate for your interests. Our attorneys have handled divorces of all levels of wealth and complexity, and want to guide you toward your best resolution. We represent men and women in Wake, Johnston, Durham, and surrounding counties. Call New Direction Family Law at (919) 719-3470 to schedule an appointment or visit us online at our website.
