Equitable Distribution in North Carolina: Ensuring Fair Division of Assets during Separation or Divorce
When going through a separation or divorce in North Carolina, the division of marital property is guided by equitable distribution law. This means that the court will distribute property between spouses in a manner that is fair and reasonable.
Equitable distribution recognizes that marriage is a partnership where both spouses contribute significantly, entitling the homemaker spouse to a share of the property acquired during the relationship (White v. White, 312 N.C. 770, 324 S.E.2d 829, 1985).
How does the court determine equitable distribution?
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.
In determining equitable distribution, the court considers factors such as:
- The income, property, and liabilities of each party at the time of property division.
- The duration of the marriage and the age, physical and mental health of both spouses.
- The need of a parent with custody of the children to retain the marital residence and its household effects.
- Any direct or indirect contributions made by one spouse to the acquisition of marital property, including financial contributions, efforts, and sacrifices made as a spouse, parent, wage earner, or homemaker.
- Contributions made by one spouse to support the education or career development of the other spouse.
- Acts taken by either party to maintain, preserve, or devalue the marital property during the separation period.
- Any other factors that the court deems just and proper in ensuring a fair division.
- Equitable distribution can be determined before or after a divorce judgment.
- It is crucial to raise the claim for equitable distribution before the divorce judgment to preserve the court’s ability to make a determination later on.
Seeking Legal Guidance for Equitable Distribution
Navigating the equitable distribution process can be complex and emotionally challenging. It is highly recommended to seek legal counsel from experienced family law attorneys who specialize in equitable distribution. They can guide you through the process, protect your rights, and advocate for a fair distribution of assets.