Understanding “Divisible Property”

In Separation & Divorce by Elizabeth Stephenson

North Carolina is an equitable division state. This means that when a couple separates and divorces, all of a couple’s property is identified and classified as either marital property or separate property. Then the court considers the net value of just the marital property and determines an equitable division of the marital estate.

While there are some exceptions, marital property is generally all property that is earned or obtained between the date of marriage and the date of separation. The date of separation is critical when it comes to property division because it creates a cut off point for what property is considered part of the marriage, and it also provides the date at which the fair market value of marital property should be estimated.

There are a couple of problems with strictly looking at the date of separation in property division proceedings. The first is that these proceedings can take a long time to resolve, especially when there is a large marital estate or when the dispute is contentious. The second is that there are many different types of property with rights or valuations that fluctuate between the date of separation and the date that the court actually distributes the property. To account for this dilemma, North Carolina has defined and included “divisible property” as part of the marital estate.

What is Divisible Property?

Divisible property essentially accounts for what happens between the date of separation and the date of distribution. The North Carolina legislature has defined “Divisible property” to include the following real and personal property:

  1. “All appreciation and diminution in value of marital property and divisible property of the parties occurring after the date of separation and prior to the date of distribution, except that appreciation or diminution in value which is the result of post separation actions or activities of a spouse shall not be treated as divisible property.”
  2. “All property, property rights, or any portion thereof received after the date of separation but before the date of distribution that was acquired as a result of the efforts of either spouse during the marriage and before the date of separation, including, but not limited to, commissions, bonuses, and contractual rights.”
  3. “Passive income from marital property received after the date of separation, including, but not limited to, interest and dividends.”
  4. “Passive increases and passive decreases in marital debt and financing charges and interest related to marital debt.”

In the interest of fairness, the net value of divisible property is considered part of the marital estate and is equitably distributes as such.

Contact New Direction Family Law

New Direction Family Law is a family law firm that represents clients navigating separations, divorces, and property division disputes. Equitable division proceedings can be incredibly complex and contentious. This is because they are incredibly important to both parties. We understand what this means to our clients and strive to provide effective, vocal legal representation. Call New Direction Family Law at (919) 719-3470 to schedule an appointment, or contact us online at our website.

Sarah J. Hink
New Direction Family Law

New Direction Family Law
(919) 719-3470