EQUITABLE DISTRIBUTION/DIVORCE

Overview

  • North Carolina is an equitable distribution state, meaning marital property is divided fairly, but not necessarily equally, during divorce
  • The law presumes a 50/50 split is equitable, but this can be challenged based on various factors
  • Equitable distribution covers marital property acquired during the marriage, including assets, debts, retirement accounts, etc
  • You must be legally separated (living in different residences) for one year in order to apply for divorce in North Carolina.
  • An Equitable Distribution case can be filed at any time but a divorce cannot be filed until the one year period is met. To protect your rights within the year of separation, a separation agreement or an equitable distribution case is filed.

Property Classification

Marital property is divided into three categories:

  1. Marital property: Assets and debts acquired during the marriage
  2. Separate property: Assets acquired before marriage or through inheritance/gifts to one spouse
  3. Divisible property: Changes in value of marital assets after separation but before distribution
  • A claim for equitable distribution must be filed before the divorce is finalized
  • The process can begin any time after separation, but before the final divorce judgment
  • If spouses can’t agree, the court will determine property division

Factors Considered

Judges consider numerous factors when determining equitable distribution, including:

  • Duration of the marriage
  • Age and health of each spouse
  • Income and property each brought to the marriage
  • Standard of living during marriage
  • Economic circumstances of each party
  • Contributions to education/career of other spouse
  • Tax consequences
  • Retirement benefits
  • Liquid vs. non-liquid nature of property

Important Considerations

  • Marital misconduct (e.g., adultery) generally doesn’t affect property division, except for economic misconduct. It may, however, affect alimony.
  • Interim distributions may be granted before final judgment
  • Tax implications should be considered when dividing assets
  • Retirement accounts and pensions are subject to division