Equitable Distribution in North Carolina:
Ensuring Fair Division of Assets during Separation or Divorce

The court follows a four-step process in an equitable distribution case: identify, classify, value, and distribute.

Identify: The court determines all assets and debts owned by either or both parties on the date of separation. This includes a thorough examination of both tangible and intangible assets, such as real estate, bank accounts, investments, businesses, vehicles, household items, and even intellectual property.

Classify: Once the assets are identified, the court classifies them as either marital property or separate property. Marital property includes assets acquired during the marriage, regardless of who holds the legal title. On the other hand, separate property encompasses assets owned by either spouse before the marriage, acquired through inheritance or gift, or designated as separate in a valid agreement. It’s essential to provide evidence and documentation to support the classification of property.

Value: To ensure an equitable distribution, the court must determine the fair market value of the marital property. Some assets, like bank accounts, can be valued easily using statements around the date of separation. However, other assets, such as real estate, businesses, and complex investments, may require the expertise of appraisers or financial professionals. Their assessments provide accurate valuations, considering factors like market conditions, depreciation, and future earning potential.

Distribute: Once the assets are identified, classified, and valued, the court proceeds to distribute them between the spouses. While an equal division is typically presumed, the court has the discretion to deviate from an equal distribution if it determines that an equal division would not be equitable. The court takes into account various factors to make an informed decision that considers the unique circumstances of the case and the well-being of both parties.