Equitable Distribution in North Carolina 2017-07-07T10:15:42+00:00

Equitable Distribution:  Presumptions, Factors, and Interesting factors.

Absent a separation agreement or settlement, North Carolina courts will decide what is a fair, reasonable, and equitable division of assets looks like. Typically, there is a presumption of an equal division of property between the properties.  The courts may consider any factors that are outlined in the statute on how to divide your property.  The court may consider each factor individually or look at the totality of the factors in dividing your property.

Distribution and Marital Presumption:

Equitable distribution is the process of dividing any property that was obtained during the marriage.  North Carolina has a presumption that the property should be equally divided and that anything acquired during the marriage is marital.  Both these presumptions can be rebutted.

What Property is Included?

Generally, every item acquired during the marriage is included in an Equitable Distribution Affidavit.  This includes the former marital residence, automobiles, furniture, pensions, retirement, and even debts.  In some cases, the student loans acquired during the marriage can also be distributed by the court.

 Divorce Cuts off Equitable Distribution Rights:

Unless an equitable distribution claim is pending at the date of divorce, the right to have your property divided by a judge ends.  Parties have little recourse in receiving pension benefits, property, or contributions for marital debts.  Don’t put off consulting an attorney regarding your equitable distribution rights in North Carolina.

Factors Considered by the Court in Equitable Distribution:

  • Length of your marriage
  • Property each spouse brought into the marriage
  • Earning capacity of each spouse
  • Responsibilities each spouse has in raising the children
  • Employability of the other spouse
  • Any tax consequences of dividing an asset
  • How debt is allocated

Equitable Distribution is how marital property is divided.

There is a presumption that all in-kind property should be divided equally.  Retirement account and bank accounts are considered to be a “in-kind” and can be divided equally.  Your home would not be be considered “in-kind” and the person receiving the home could potentially owe a monetary amount to their spouse after all the property is divided.

Other considerations in Equitable Distribution

Equitable Distribution is subject to every asset.

Every asset acquired during the marriage is subject to division. Ultimately, the parties may agree or a judge could decide that an asset is marital or separate.  Separate assets must be distributed to the party that received the asset (usually through a gift or inheritance).

Equitable Distribution is not concerned with how property is titled.

It does not matter how a piece of property is titled.  The judge will have the authority to include the asset in the equitable distribution asset.  If the property is titled in the name of a third party, that party must be joined to the equitable distribution lawsuit.

The parties to the divorce have the burden of identifying and proving the existence of assets.

The parties must identify, list, and prove any assets they request to be divided.  Documentation, photographs, receipts, or property searches are the best way to accomplish this.

Assets transferred in anticipation of divorce can be considered and divided.

Your spouse cannot transfer or liquidate an asset in anticipation of divorce to skew any equitable distribution award.  If proven, the spouse will be awarded that asset in equitable distribution and the innocent spouse will receive their share through other assets or a distributive award.

Each spouse is responsible for any debts incurred during the marriage absent an exception.

Any debt acquired during the marriage is presumed marital.  It will be up to the other spouse to prove that the debt was not for a marital purpose.  A marital purpose would be clothing for that spouse, items for the children, bill payments, or dinners out.  Typically, any expenses used to conduct an illicit affair would not be deemed marital.

Four Factors in Property Distribution:

A judge typically is tasked with four factors when addressing equitable distribution in North Carolina.  Essentially, the judge looks at a snap shot of property and debt that existed on the date the parties separated.  The factors are:

  • Classification- Is the property marital, separate, or another classification?  What date was it acquired?
  • Valuation- What is the value of the property? Is there a neutral evaluation to consider?
  • Possession- Who possesses this property? Has anything happened to the property since the separation?
  • Distribution- Which party wants this property?  Can this person afford any payments associated with the property?

From those four factors, the judge crafts a distribution of the property.

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For more information regarding Equitable Distribution Law, check out the North Carolina General Statute here.