When you separate, one of the issues that you have to resolve is how property is divided. This is a big deal because there can be a lot of property to sort out, and the outcome has big implications for your financial future. Further, tensions between the separating couple can make this task difficult, which can turn property claims into turf wars.
A vehicle, like a car, truck, or motorcycle, is a valuable piece of property that can be a focal point when it comes to equitable distribution proceedings. This makes it a topic of great interest. There are several questions that must be answered in determining what should happen with it. These include:
Is the Vehicle Marital Property?
North Carolina is an equitable distribution state, which means that courts must take the total value of a couple’s marital property and divide it between the spouses in an equitable manner. Generally, marital property includes all property and debts acquired between the date of marriage and the date of separation. Significantly, separate property is not subject to equitable distribution, making the classification of property as marital or separate a big deal.
Therefore, when considering a vehicle, some key questions are: “When was the vehicle purchased?” and “What funds were used to pay for the vehicle?” The answer to these questions are important because if the vehicle was purchased during the marriage, this generally means that it is marital property. However, if the vehicle was a gift or inheritance expressly given to one spouse, then it may be separate property—so long as comingled funds were not used to make payments on the vehicle.
Another significant question is whether there is an outstanding auto loan on the vehicle. This matters because equitable distribution encompasses marital property as well as marital debt, making this auto loan a part of the overall debt of the marital estate. Further, the remaining amount of the loan in comparison to the fair market value of the vehicle can be a determining factor on whether the vehicle is worth fighting for from a financial perspective.
If a court awards you the vehicle in your equitable distribution proceeding, then it will likely award marital property of similar value to your former spouse. The title of the vehicle can ultimately be transferred to you and you will need to either pay off or refinance your loan so only your name is on the loan.
New Direction Family Law
If you are considering separating, or have already separated from your spouse, you need an attorney to help you reach a resolution to the many legal issues that are going to arise. One of these issues is the division of property, and it is essential that you understand your legal rights so that you don’t get an unfair share of what you are entitled to. At New Direction Family Law, our attorneys are smart, experienced, and thorough. We represent both men and women who need help navigating the complexities of equitable distribution, and guide them toward fair, enforceable resolutions. We provide representation in Wake, Johnston, Durham, and surrounding counties. Contact New Direction Family Law today at (919) 719-3470 to schedule an appointment or reach us online.
Carly G. Baker
New Direction Family Law