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How are Trust Funds Treated During Equitable Distribution Proceedings?

In Separation & Divorce, Wealth by Elizabeth Stephenson

Trust funds are a financial mechanism in which money or property are legally owned by a separate entity (a trust), and proceeds are distributed in accordance with the intentions of whoever created the trust. Trusts are one way that families distribute wealth amongst younger generations. If you are the beneficiary of a trust, or your spouse is a beneficiary of a trust, then the following question may interest you greatly: How are trust funds treated during equitable distribution proceedings? Trust Funds are Generally the Separate Property of the Beneficiary Spouse Generally speaking, the answer is that trust funds are considered the separate property of the beneficiary. Under North Carolina’s laws of Equitable Distribution, “separate property” is defined as “all real and personal property acquired by a spouse before marriage or …

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True or False: My Wife Can’t Touch My Retirement

In Separation & Divorce, Wealth by Elizabeth Stephenson

Divorce is the worst. It really is a shock to the system in a lot of ways. There is an enormous emotional toll that accompanies the end of your valued relationship. If you are a father and your family’s breadwinner, there is the uncertainty of what will happen with your children, whether you have the strength to guide them through this experience, and the prospect of seeing them a lot less than you ever have before. Further, there is a financial toll. If you have traditionally been the primary source of income for your home, then you understand that you are about to spend a lot of money on attorneys fees, will have to split marital assets in half, and will likely have to pay alimony and child support. With …

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Who Does the House Belong To?

In Separation & Divorce by Elizabeth Stephenson

In many marriages, a house is the most valuable property a couple owns. This is true both literally and figuratively. Not only is a home of great financial value, but it is also a place full of memories and firsts for couples and their children. The first place you lived together, the place where your children were raised from birth, and the place your children feel safe. Your family’s home is a really big deal. As a consequence, when couples separate and divorce, houses are an incredible source of conflict. This leads to the key questions: who will get the house at the conclusion of the divorce process? Is There an Agreement? The answer to this question is pretty straight forward if parties have a prenuptial agreement, or a separation …

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Distinguishing Marital Property from Separate Property

In Separation & Divorce, Wealth by Elizabeth Stephenson

When couples divorce, one of the big issues that must be resolved is how to divide property. In the absence of a pre-nuptial agreement that addresses property division, the law entitles spouses to seek an equitable division of marital property. In short, this means that a court will take the total fair market value of all of a couple’s marital property and divide it in an equitable manner in consideration of numerous statutory factors. Significantly, property that is considered “separate” property is not subject to division. Therefore, the classification of property as marital or separate is critical for both parties. What is Marital Property? Marital property is defined as “all real and personal property acquired by either spouse or both spouses during the course of the marriage and before the …

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Inheritance and Division of Marital Property

In Separation & Divorce by Sarah Hink

When a married couple separates and divorces in North Carolina, the law calls for the court to divide the couple’s marital property in an “equitable” manner. On the other hand, each partner’s separate property stays with them and is not subject to equitable distribution. This makes the classification of a couple’s property as marital or separate a complex and hard-fought source of litigation when a marriage ends. Essentially, the partner with more money or resources will generally fight to hold on to their money, while the partner with less will seek more. For some people, inheritance signifies a great source of personal wealth. This is why if a spouse inherited property during a marriage, a natural question becomes: is the inheritance separate or marital property? Inheritance is Generally Separate Property …

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Prenuptial Agreements: Not Just for Celebrities

In Relationships, Separation & Divorce by Elizabeth Stephenson

Marriage is a great adventure, a commitment, and an affirmation of love. It is supposed to be a new beginning that lasts for the rest of our days. Unfortunately, as much as we want to believe that all couples will live happily ever after, as divorce attorneys we can honestly say that marriage can be a risky proposition for some couples. Marital relationships can be filled with trust issues, infidelity, financial problems, physical and emotional abuse, and substance abuse. Sometimes, these issues and behaviors seem to come out of nowhere after the wedding. This is why a prenuptial agreement may be worth considering. What is a Prenuptial Agreement? A prenuptial agreement is a contract between a couple that is prepared and executed prior to their marriage. It basically allows for …

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What Constitutes Separate Property?

In Separation & Divorce by Sarah Hink

In North Carolina divorce proceedings, one of hardest fought battles is over the classification of property. Both sides want their piece of the pie. Unfortunately, answering this question can be a complex one even for the most experienced attorney. The reason for this is that North Carolina law puts property into two categories at the time of a couple’s separation: “marital property” and “separate property”. Why is this an important distinction? Because a court can only consider and divide a couple’s marital property in a divorce, while separate property remains with its original owner. What is Marital Property? The North Carolina General Statutes defines marital property as “all real and personal property acquired by either spouse or both spouses during the course of the marriage and before the date of …

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When Separate Property Becomes Marital Property

In Separation & Divorce by Elizabeth Stephenson

When it comes to property division, North Carolina is an equitable distribution state. Essentially, a court takes all marital property and divisible property and considers numerous factors in determining an equitable division between the couple. A big source of conflict in property division proceedings is how property is classified as separate or marital property. This is because as a general rule, a person’s separate property remains with them and is not considered as part of the estate. Separate property includes property that a person owns prior to their date of marriage, inheritance or gifts that are specifically left to that person during the marriage from a third party, and a gift from one spouse to another during a marriage that is specifically intended to be separate property. While the definition …