Equitable Distribution

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.