During a marriage, husbands and wives typically acquire assets and debts, whether it be a home purchase, vehicle, or credit card debt. In North Carolina, the division of all things acquired by married parties is called North Carolina Equitable Distribution and the Court generally applies a 3 step process to effectuate an equitable distribution.
Step 1 – Your North Carolina Judge must identify and classify all property and debt as either separate, marital, or divisible. Separate property is not subject to Equitable Distribution and is property belonging to one spouse. Marital property is generally property belonging to both spouses acquired after the date of marriage and prior to the date of separation. Divisible property is generally property that has both separate and marital property characteristics.
Step 2 – The North Carolina Judge values every asset or debt that was identified and classified. The valuation of each asset and debt is a complex process with many variables and factors that can help establish the value of an asset or debt. Tax values, loan balances, appraisals, bank statements, and many other items can be used to help determine the valuation of each asset or debt.
Step 3 – All of the property and debts are distributed between the parties. Equitable Distribution does not necessarily mean the North Carolina Court will distribute each item 50-50. In a North Carolina Equitable Distribution case, “equitable” does not always mean “equal”. Under the North Carolina Equitable Distribution Act, N.C.G.S. 50-20, the Court has the discretion to decide that an equal split of the marital assets and debts would not be an equitable split of those items. If so, the North Carolina Court may use any combination of twelve different factors to obtain an “equitable” distribution of all marital assets and debts.
While North Carolina Equitable Distribution can be broadly explained by the 3 step process, in reality, Equitable Distribution is often the most complex and nuanced issue that separated and divorcing persons must address. If you are separated or are thinking about separating and have any questions about your North Carolina Equitable Distribution rights in North Carolina, please call us today at (704) 810-1400 to schedule a consultation.