The division of property in a North Carolina divorce can be an incredibly complex process. As an “equitable distribution” state, all assets classified as marital property are subject to an equitable split, and ‘equitable’ does not always mean ‘equal.’ The intention is to make the split as fair as possible, but fairness depends on several circumstances.
Assets and debts in a divorce action can be classified in one of three ways:
- Marital property: All property and liabilities acquired during the marriage are classified as marital assets. Unless stated otherwise at the time of giving, gifts between spouses are considered marital property too.
- Separate property: This includes all assets or debts acquired before the marriage and any gifts or inheritances bestowed on one spouse by a third party during the marriage. Any property identified as separate is not subject to equitable distribution.
- Divisible property: This comparatively limited category includes property acquired after separation due to acts or accomplishments during the marriage. Examples include commissions or bonuses earned during the marriage but awarded after the spouses separated.
Although the presumption exists that a 50-50 split of marital assets is equitable, North Carolina courts often determine that a more lopsided ratio is equitable in a particular couple’s case. Factors that they take into account include, but are not limited to:
- Each spouse’s income
- Length of the marriage
- Health and age of each spouse
- Any support obligations from a previous marriage
- Any contributions made by one spouse to advance the career or education of the other
- Any retirement benefits or pensions that are not subject to distribution, such as Social Security benefits or military disability payments
- Tax consequences
- And several other factors
It is important to remember that there is no automatic right to equitable distribution of assets when a couple divorces. The rights must be specifically asserted by one or both parties BEFORE the divorce takes place. If a claim is not pending at the time of the divorce, equitable distribution may NOT be pursued later.
If two parties come to their own agreement on marital property division, they are legally permitted to avoid a court-ordered distribution. The couple may draw up a separation or property agreement that distributes assets and debts in a manner that they find acceptable.
Because divorce can contain a strong element of financial risk, it is important to have an experienced family law attorney advocate for you and safeguard your interests. At Easterling Law, we will work to help you retain the property you are entitled to and that which you may need to build a positive new future for yourself.
