Equitable Distribution

The Court (unless settled by agreement any time after separation) will divide the property owned by you and your spouse. YOU MUST HAVE A CLAIM FOR EQUITABLE DISTRIBUTION PENDING ON THE DATE OF ABSOLUTE DIVORCE, OR YOUR RIGHTS ARE GONE. In North Carolina, this process is

described as "Equitable Distribution of Marital Assets."

There are three types of property that must be considered.

(a) "Separate property" includes all property owned by either spouse before the marriage or property acquired during the marriage by one spouse by inheritance or gift from a third party. A gift from one spouse to the other during the marriage is marital property unless the donor states at the time of the conveyance that it is intended to be separate property.

(b) "Marital Property" includes property presently owned that was acquired during the marriage except property determined to be "separate property." "Marital property" includes all vested pension and retirement benefits acquired during the marriage and prior to separation.

(c) "Divisible property" is relatively new. Divisible property is property subject to equitable distribution upon divorce and is defined as real and personal property that includes the appreciation and diminution in value of marital property and other divisible property acquired as a result of actions of the parties during the marriage but before separation, passive income from marital property received after separation and increases in marital debt including finance charges and interest related to marital debt.

The new law further creates a presumption that an in-kind distribution of marital or divisible property is equitable, but allows this presumption to be rebutted by the greater weight of the evidence, or by evidence that the property is a closely held business entity or is otherwise not susceptible of division in-kind.

The new law makes it easier for the court to make interim distributions of property prior to the final judgment. Under current law, before an interim distribution may be made, the spouse must show good cause for such a distribution. The new law authorizes the court to make interim distributions unless good cause is shown that such a distribution should not be made.

The new law further provides that evidence of pre-separation and post-separation value is competent as corroborative evidence of the value of marital property as of the date of separation. Divisible property and divisible debt are valued as of the date of distribution.

The change relating to motions for interim allocation applies to motions for interim allocation filed after October 1, 1997. The remainder of the new law hereinabove applies to actions for equitable distribution filed on or after that date.

There are thirteen (13) statutory factors the court must consider in deciding whether an equal division is appropriate in your case. These factors are:

  • Income, property and debts of a party;
  • Support obligations from prior marriages;
  • Length of marriage and age and health of each party;
  • Needs of custodial spouse to own or to possess the marital homeplace and household effects;
  • Expectation of retirement benefits which are separate property;
  • Efforts made by each spouse to acquire property;
  • Contributions of one spouse to the education of the other;
  • Direct contributions that increase the value of separate property;
  • Liquid or non-liquid nature of property;
  • Difficulty in valuing interest in a business;
  • Tax consequences; and
  • Actions taken by either party to preserve or waste marital assets;
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North Carolina Divorce Lawyers Blog - Equitable Distribution
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