What is equitable distribution and how is it handled?
Equitable distribution is the process of dividing the property and debts of a marriage. North Carolina uses a three-step process when dividing property:
1. Identify and classify your property as either marital or separate property
2. Assign all property a fair market value, and
3. Distribute marital property in a fair and equitable manner
When Should I file for equitable distribution?
You may file at any point after you are separated. The judge may rule on the motion at any point during the divorce process or after your divorce is finalized. If you and your spouse are able to reach an agreement, you may finalize the distribution at any time.
How do I determine the difference between “marital” and “separate” property?
Marital property consists of all property acquired by either spouse during the time of their marriage, and still owned at the date of separation.
Separate property falls into three categories: property owned by one spouse prior to the date of marriage, property inherited, and property acquired by a gift from someone other than their spouse. Separate property cannot be distributed by the court.
In North Carolina, property is classified as either marital, separate, or mixed based on the source of the funds used to acquire that property. If separate funds are used to acquire property the acquired property will be considered separate property.
Will a judge always split our property 50/50?
Typically, a 50/50 split is considered the fairest and most equitable way to distribute property. In some circumstances, the judge will consider many different factors when determining what is fair and equitable. These include, but are not limited to: the length of the marriage, the unequal earning power of the parties, the need of the parent with primary custody of the children to occupy the marital household, the age, and health of the parties, support obligations from a previous marriage, contributions made by one spouse to further the educational or career development of the other, a party’s contribution to any property acquired, the financial situation of each party at the time of separation and any acts made to devalue marital property after the date of separation, as well as other relevant factors.
If the division of assets is contested, you may need to hire an attorney to obtain a temporary injunction to protect your rights and to prevent the waste or disappearance of the property pending a final distribution.
What if my spouse cheated?
Marital fault is not considered relevant in equitable distribution cases unless marital misconduct has had an economic impact on the value of the marital estate.
Is my business subject to equitable distribution? What about my pension and retirement plan?
Yes. Businesses and professional practices may be considered “property” subject to equitable distribution, as well as pension and retirement plans. If you are entitled to part of the earnings from the retirement plan, you must get an order called a Qualified Domestic Relations Order to distribute the retirement benefits.