What is equitable distribution?
The court has authority under Chapter 50 of the North Carolina General Statutes to divide assets and debts. This is equitable distribution. Either spouse can file a claim for this after the date of separation. However, the claim must be filed by at least one spouse prior to the date of divorce.
What exactly qualifies as “property”?
Typically any property that can be distributed is marital property, which means it was obtained during the marriage but before the date of separation. This might be real property, which is a house or land. This could also be personal property, or anything that is movable like a car or a computer. Debts are also often divided. This means that property obtained after date of separation, or gains or losses in the value of property after the date of separation, might also be shared.
Spouses often have items of separate property, like an inheritance or premarital property, which is not divided. However, this isn’t always straightforward, since assets are commingled during a relationship and can be hard to separate. Often an attorney can help you decide what is subject to distribution and what is not.
What is the process for equitable distribution?
When hearing a case of equitable distribution, a judge follows a three-step process. A judge must:
- Identify all property and determine what it is and whether it is marital, divisible, or separate
- Assign a value for each item
- Distribute the property.
A court will divide assets and debts equally unless there are compelling reasons to award more or less to one party.
Why do you need an attorney?
An attorney can assist a separating spouse with preparing the complaint, organizing documentation of assets and debts, drafting an equitable distribution affidavit that compiles lists of property subject to distribution, calculating and negotiating offers, and presenting the case at trial. Many equitable distribution cases, particularly when there are no other claims of alimony or post-separation support, settle before trial. North Carolina requires parties to participate in mediation prior to scheduling the case for a final trial, which helps the parties reach a settlement. Also, as mentioned in a previous blog posts, separating spouses can settle all equitable distribution issues in a Separation Agreement and Property Settlement, a contract that is signed without the need for court action.
Your case might be simple, involving a house and minimal liquid assets or credit card debt. Or you and your spouse might have a highly complex web of business interests, retirement accounts, investment properties, unsettled estates, or pending alimony claims. Let us help you determine how you will handle division of these items prior to the divorce. Contact us today!