What is Equitable Distribution in North Carolina?
Equitable distribution is a legal framework used in North Carolina for dividing marital property and debts when a married couple divorces. Unlike community property states where marital property is typically divided equally, North Carolina follows the principle of equitable distribution, which means that property is divided fairly and equitably but not necessarily equally. Here’s an overview of equitable distribution in North Carolina:
Marital vs. Separate Property
The first step in equitable distribution is to distinguish between marital property and separate property:
- Marital Property: This includes assets and debts acquired during the marriage by either spouse. It generally does not matter whose name is on the title or who earned the income.
- Separate Property: This includes assets and debts acquired before the marriage, gifts, inheritances received by one spouse, and property specifically designated as separate in a prenuptial or postnuptial agreement.
Valuation of Marital Property
The next step is to value the marital property, including real estate, bank accounts, investments, personal property, retirement accounts, and more. This requires determining the fair market value of each asset and the total amount of marital debt.
Factors Considered in Equitable Distribution
North Carolina law sets out a list of factors that the court must consider when determining the equitable distribution of marital property. Some common factors include:
- The duration of the marriage.
- The income and earning capacity of each spouse.
- The age and physical/mental health of each spouse.
- The contributions of each spouse to the acquisition of marital property.
- Any waste or dissipation of assets by one spouse.
- Any prenuptial or postnuptial agreements between the spouses.
- Any other factor that the court deems relevant.
Equitable Distribution Order
Based on the factors mentioned above, the court will issue an equitable distribution order outlining how the marital property and debts should be divided between the spouses. The goal is to achieve a fair and just distribution, taking into account the circumstances of the marriage.
Marital Property Distribution Options
The court has flexibility in determining how marital property is divided. While it may not always be an equal split, it can be divided in various ways, such as transferring property, awarding a larger share of one asset to one spouse, or ordering the sale of certain assets with the proceeds divided.
Enforcement of the Order
The equitable distribution order issued by the court is legally binding, and both spouses must comply with its terms. Failure to comply can result in legal consequences.
It’s important to note that equitable distribution applies only to marital property and debts. Separate property remains the sole property of the spouse who owns it and is not subject to division. Additionally, equitable distribution is part of the divorce process in North Carolina and is separate from issues related to child custody, child support, and alimony.
If you are going through a divorce in North Carolina, it is advisable to consult with an experienced family law attorney. An attorney can help you understand your rights, advocate for your interests during the equitable distribution process, and ensure that you receive a fair and just division of marital property and debts.
We can help with your family law needs. Contact the Law Offices of Austin Vandeveer online today to get started and speak with an attorney about the specifics of your needs.