Summary of Keypoint
- North Carolina uses “equitable distribution,” not automatic 50/50 division: Courts encourage spouses to resolve property division through negotiation or mediation first. If that fails, a judge will divide property in a way that is fair, which may or may not be equal.
- Property falls into three legal categories:
- Separate property belongs to one spouse alone (property owned before marriage, inheritances or gifts to one spouse, and property acquired after separation).
- Marital property includes assets and income acquired during the marriage up to the date of separation.
- Divisible property covers changes in marital property value between separation and the court’s final ruling, such as bonuses earned but not yet paid.
- Separate property can lose protection if commingled: Mixing separate property with marital assets can convert it into marital property, making careful financial handling critical.
- Judges consider many factors when dividing property: These include each spouse’s age, health, income, debts, contributions to the marriage (including homemaking), length of the marriage, and future financial needs.
- Fault usually doesn’t control property division—but spending can matter: Adultery alone does not affect equitable distribution, but wasting marital assets (such as spending money on an affair) can result in the other spouse receiving a larger share.
Divorce laws vary by state. As a North Carolina resident, you need to understand how your accumulated property will be divided in a divorce so you can make a sound financial plan now to provide for yourself and your children. Here’s what you need to know:
North Carolina Courts Provide Equitable Distribution
The court requires that the parties attempt to mediate to try to resolve this property distribution without the direction of the court. The court encourages compromise between spouses and will normally accept a written agreement if you and your spouse come up with your own division of property. They will also give you opportunities to work on a decision that suits you both. If you absolutely cannot come up with a solution, the judge will intervene and come up with a solution.
Because NC is an equitable division state, the judge will seek to divide your property in a way that is fair. It must result in a just distribution of marital and divisible property. In some cases, this means that property will be divided equally, but there are circumstances that see a more unbalanced distribution as the fairest solution. A judge will look at several factors to determine the past contributions and future needs of each spouse.
Property Fits Into One of Three Categories
How property is divided is based on what category it falls into—separate, marital, or divisible. Separate property is yours to keep. Everything else will be distributed evenly between you and your spouse.
- Separate property refers to anything you gain or lose after the date of separation, as well as anything you owned before the marriage. Also included is the property that you received during the marriage but was for you alone, such as an inheritance, gifts, or professional licenses, and property acquired by exchanging separate property (beware of commingling this property, with property in the other categories). If you owned a home before you got married, sold it during the marriage, and bought a rental property with the money, that rental property remains yours after the divorce, as does any resulting rent and increase in property value.
- Marital property consists of everything earned and acquired throughout the marriage up until your separation. This includes retirement accounts, pensions, and other deferred compensation rights as well as your belongings and earned income.
- Divisible property is characterized as any value change of marital property that occurs between your separation date and your court date. It may include money or property such as a commission or bonus that you didn’t know about yet, changes in debt, and interest or dividends issued from a stock or bank account. What doesn’t count is any increase or decrease in the value of property caused by something a spouse does after the separation. For example, you’re not liable for your spouse’s gambling debts from their trip to the casinos after your separation.
There Are Several Factors a Judge Considers in Dividing Property
Judges take each spouse’s health, age, assets, income, and liability into consideration when dividing property equitably. They also look at the contribution or dissipation of marital property and assets by each spouse, how long the marriage lasted and how quickly property could be liquidated. If you were a homemaker, your efforts are considered equal to any income your spouse brought in, and the home is likely to be awarded to the spouse that has custody of the children. Causing the divorce by committing adultery doesn’t automatically count against you when dividing property, but it could cost you your alimony. If you spent assets on the affair, your spouse may be awarded a bigger portion of the joint property.
Understanding North Carolina division laws for divorce is important in creating a better future for you and your kids. If you and your spouse can’t come up with a financial resolution on your own, our lawyers can help. Call Easterling Law, PLLC, at 980-272-1365 for representation in your divorce case.
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