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Equitable Distribution in North Carolina
Equitable Distribution is the process of distributing property between two parties who are ending their marriage. Generally, there are three types of property. The first, marital property, is typically going to be any and all property that was obtained by the parties during their marriage. This includes pensions (both vested and non-vested), retirement accounts, deferred compensation rights, and military pensions (both vested and non-vested).
The second, separate property, is typically any and all property that was brought to the marriage by one party, as well as that received through inheritance or as a gift. Unless a contrary intent is found, property that is acquired in exchange for separate property will also remain separate property. This remains true as well for any increase in the value of separate property.
The third type, divisible property, is the property that is obtained from the separation date until the property is divided. This includes all property that may have been received after the date of separation but before the date of distribution so long as the property was acquired as a result of the "efforts of either spouse during the marriage and before the date of separation." An example of this would be a bonus that is received after the date of separation but which came from a job that the spouse had during the course of the marriage.
Only the parties' marital property, as defined above, is to be distributed. There is a presumption in North Carolina that marital assets and debts should be divided equally between the parties, although this is not always what is done in court. North Carolina courts distribute property according to fairness principles, and there are several factors that may affect this distribution. According to N.C.G.S. 50-20, the following factors can be considered if a court finds that an equal division of property is not, in fact, equitable:
1. The income, property, and liabilities of each party at the time the division of property is to become effective
2. Any obligation for support arising out of a prior marriage
3. The duration of the marriage and the age and physical and mental health of both parties
4. The need of a parent with custody of a child or children of the marriage to occupy or own the marital residence and to use or own its household effects
5. The expectation of pension, retirement, or other deferred compensation rights that are not marital property
6. Any equitable claim to, interest in, or direct or indirect contribution made to the acquisition of such marital property by the party not having title, including joint efforts or expenditures and contributions and services, or lack thereof, as a spouse, parent, wage earner or homemaker
7. Any direct or indirect contribution made by one spouse to help educate or develop the career potential of the other spouse
8. Any direct contribution to an increase in value of separate property w which occurs during the course of the marriage
9. The liquid or non liquid character of all marital property and divisible property
10. The difficulty of evaluating any component asset or any interest in a business, corporation or profession, and the economic desirability of retaining such asset or interest, intact and free from any claim or interference by the other party.
11. The tax consequences to each party, including those federal and state tax consequences that would have been incurred if the marital and divisible property had been sold or liquidated not eh date of valuation.
12. Any other factor which the Court finds to be just and proper
It is important to note, as it relates to Equitable Distribution, once an absolute divorce is granted, a party is barred from asserting a claim for Equitable Distribution. This means that any claim for Equitable Distribution must be pending before a party obtains an absolute divorce, or such a claim will not be heard by the Court.
At King & Rowe, PLLC, we can help you determine what type of property you have and its valuation. Please call us for a consultation if you would like to file and action for Equitable Distribution or if you have been served with a complaint for such.
Contact us today 828-466-3858.