If you’re getting divorced but most of your property is in your spouse’s name, you may be concerned that you’ll walk away with nothing. In addition to the emotions you may feel about the divorce, you have to worry about finances too. Fortunately, North Carolina uses the equitable distribution method for dividing property.
The Three Kinds of Property in a Divorce
During a divorce, you and your spouse’s property will be classified into three categories: marital property, separate property, and divisible property. Marital property includes all property that either of you own that you acquired during marriage (excluding any separate property). Separate property includes any property that either of you owned before the marriage. It also includes property that one spouse acquired during marriage as a gift or an inheritance. Finally, divisible property includes any changes in value to marital property after the separation date. It also includes any income from marital property that either spouse receives after the separation date.
The equitable distribution process divides marital property and divisible property between spouses. The court tries to divide the property fairly and equitably. What is fair depends on a variety of factors that take into account each spouse’s circumstances. These factors include, but are not limited to:
- Each spouse’s income, property, and liabilities
- Contributions by a spouse who does not have title to a piece of property to acquire, improve, or maintain the property
- Contributions by a spouse to the other spouse’s education
- The length of the marriage
- Each spouse’s physical and mental health
- Any support obligations from previous marriages
- A parent with custody of the children’s need to occupy the marital residence or use its household items
As you can see, the distribution laws do take into account that spouses may have made unequal contributions to the total marital property. They also consider that spouses may have contributed to the marital property but not have title to it.
What If Your Spouse Owns All the Property?
It can be a common situation in marriages: one spouse handles all the finances. That spouse may have their name on the title to the house and the cars. Or he or she might be the one who pays for household appliances and bills. When it comes time to divide the property in a divorce, how can the other spouse show that he or she is entitled to part of it?
As described above, equitable distribution tries to divide property regardless of whose name is on the title. The spouse who didn’t directly purchase property still might have contributed to its purchase. Or the spouse may have sole custody and need to stay in the marital house. It may not be fair to apportion marital property solely based on whose name is on it. The court must take into consideration all of the factors listed above, not just title.
Nevertheless, a spouse whose name is not on the house or car still might be worried. There’s a legitimate concern during divorce that your spouse could take all the property and leave you with nothing. That’s why it is important to seek legal help early in the divorce process – ideally before separation. Your lawyer can help you document what is marital property and what is separate property. This can assist in property division after you file for divorce.
Agreements for Spouses with Unequal Property Ownership
If you are about to get married or recently married but concerned about property division should you ever divorce, consider signing an agreement with your spouse. This can take the form of a prenuptial agreement (signed before marriage) or postnuptial agreement (signed after marriage). In this kind of agreement, you and your spouse may predetermine how to divide the assets should you divorce. For example, it could spell out that you will get the house but your spouse gets the cars if you divorce.
If you are considering separating from your spouse, you may want to sign a separation agreement with your spouse. This is a negotiated agreement about the terms of the separation. It also can include stipulations about property division once you get to that stage of the divorce. For example, it might alter the equitable distribution method because you and your spouse each want to keep particular pieces of property.
All of these types of agreements are worth considering if you’re concerned that equitable distribution won’t have the best result for you or your spouse. Keep in mind, though, that the court will have to follow an enforceable prenup, postnup, or separation agreement. The agreements can alter the default rules for property division. As a result, you should always have a lawyer prepare these agreements. You and your spouse should consider hiring separate lawyers so that you can each get advice about your individual rights when signing an agreement.
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.