Dividing property during the divorce process can become very complicated and sometimes, contentious. There are different kinds of property that the court must divide between the spouses, including marital property, separate property, and divisible property. If you’re not familiar with the concept of divisible property in North Carolina, read on to learn more.
What Is Divisible Property?
In general, separate property is the property that each individual spouse brings to the marriage. Marital property is the property that spouses jointly acquire during their marriage and before their separation date. However, property may change in value during the one-year separation period. Or a spouse may receive property during the separation that he or she earned during the marriage. How would this property be classified, since it is not marital property? North Carolina law calls it “divisible property”.
Examples of Divisible Property
Divisible property includes:
- The amount of marital property’s increase or decrease in value after separation but before the final property division (except property that increased/decreased in value because of a spouse’s post-separation actions)
- Property that spouses received after the separation date, that was acquired due to efforts of either spouse during the marriage
- Passive income such as interest or dividends on martial property received after the separation date
- Other passive increases and decreases in the value of marital property (e.g., financing charges or accrued interest)
Some examples of divisible property could be interest that accrues during the separation period on joint loans, or a bonus that one spouse earned before separation but receives during separation.
How Is Divisible Property Divided?
During a divorce, the court either divides divisible property equally, or decides that an equal division is not equitable. If an equal division is not equitable, then the court makes an equitable decision considering all the circumstances. This process can help avoid contentious disputes about which property belongs to which spouse.
Can a Separation Agreement Affect Divisible Property?
If you and your spouse agree to sign a separation agreement, it can include provisions about dividing your divisible property. You might decide that you do not want the court to handle property division. Or you might have different ideas about how to divide it than listed in the default North Carolina laws. You and your spouse can negotiate a separation agreement with the help of your lawyers.
In addition, you may decide to take advantage of alternative dispute resolution methods such as mediation or arbitration. During the ADR process, a mediator may help you and your spouse decide how to divide your divisible property. If you choose arbitration, the arbitrator may make an evaluation of equity and the circumstances similar to what a court would do. Talk to your lawyer about your options during the process of property division.
Let New Direction Family Law Assist You
If you are considering ending your marriage, the team at New Direction Family Law is available today to answer your questions. With decades of combined legal experience, our attorneys are knowledgeable, effective, and compassionate professionals. We will help you understand your legal rights and work hard toward your best outcome. We proudly serve clients in Wake, Johnston, Durham, and surrounding counties. Contact New Direction Family Law at (919) 646-6561 to schedule a consultation, or visit us at our website.