Equitable Distribution

EQUITABLE DISTRIBUTION OF
MARITAL ASSETS & DEBTS 

During a marriage, it is very likely that a married couple will obtain new property. This property, such as equity in a house, retirement account balance increases, savings accounts, and even household furnishings may be considered marital property. Marital property can also include debts incurred during the marriage, such as medical debt, car loans, and credit card debts.

Following a divorce, it is important to distribute marital property (and marital debts) between the parties. This distribution is designed to ensure that both partners obtain an equal share of the assets and expenses created during the marriage.

 North Carolina law creates a presumption that equal distribution is an equitable distribution, but again many factors can warrant an unequal distribution of assets and debt.

Distribution Classifications

The Equitable Distribution Process begins with an evaluation of all assets and liabilities of each party. The parties will generally fill out a detailed financial statement that will list all of the assets and debts known by each party. The Financial Statement will also list proposed valuations and an initial classification of the asset or liability.

MARITAL PROPERTY

"Marital property" means all real and personal property acquired by either spouse or both spouses during the course of the marriage and before the date of the separation of the parties.

It is presumed that all property acquired after the date of marriage and before the date of separation is marital property except property which is separate property under subdivision (2) of this subsection.

DIVISIBLE PROPERTY

"Divisible property" means all real and personal property as set forth below:

  1. Appreciation/diminution in value of marital/divisible prop occurring after the date of separation and prior to the date of distribution,

  2. All property, property rights, or any portion thereof received after the date of separation but before the date of distribution that was acquired as a result of the efforts of either spouse during the marriage and before the date of separation, including, but not limited to, commissions, bonuses, and contractual rights.

  3. Passive income from marital property received after the date of separation, including, but not limited to, interest and dividends.

  4. Passive increases/decreases in marital debt; financing charges & interest

SEPARATE PROPERTY

"Separate property" means all real and personal property acquired by a spouse before marriage or acquired by a spouse by devise, descent, or gift during the course of the marriage.

However, property acquired by gift from the other spouse during the course of the marriage shall be considered separate property only if such an intention is stated in the conveyance.

IS EQUAL EQUITABLE?

North Carolina presumes an equal distribution is an equitable one. However, many situations may arise affording an opportunity for an unequal distribution.

Let the experience of our family law attorneys guide you through every step of the process.