North Carolina Divorce FAQ’s – Property Division

This is about property division in divorce in North Carolina, including the general rule for North Carolina property division, what effect the length of marriage and conduct of the parties has on property division after divorce in North Carolina, how separate property works in North Carolina, and treatment of the marital home and retirement plans in divorce in North Carolina.

This information is from Maury D. Beaulier, the DivorceInfo Network Lawyer for North Carolina. Click here to visit his web site.

What’s the general rule of property division (equitable distribution, community property, or legal title)?

In North Carolina the process of dividing the property and debts of a marriage is called Equitable Distribution. Equitable Distribution is a three step process conducted by the court when spouses are unable to divide property on their own. The first step in the process is “classification”. The court must determine which property is marital and which is separate. Separate property is property owned before marriage, inherited property and gifts. Separate property used to purchase jointly held real estate becomes marital property. Most of the remaining property is designated as marital property. The second step is “valuation”. This is the assignment of a fair market value to each piece of marital property. Frequently, appraisers and other experts assist in this step of the process. The fair market value is the amount that would be paid by a willing buyer to a willing seller. The final step is “distribution”. The court will distribute the property equally unless there are factors present in your case which indicate that an equal division would not be equitable. Among the factors considered are:

  1. The income, property and debts of each party, 2. Support obligations for prior marriage, 3. The length of the marriage and age and health of the parties, 4. Custody of children, 5. Expectation of retirement benefits which are separate property, 6. Efforts made by each spouse to acquire the property, 7. Contributions of one spouse to the education of the other spouse, 8. Direct contributions to increased value of separate property, 9. Liquid or non-liquid nature of property, 10. Difficulty in valuing interest in a business, 11. Tax consequences, 12. Actions taken by either party to preserve or waste marital assets, and 13. Other factors.

What effect does the conduct of the parties have on property division?

The conduct of the parties, other than the economic conduct discussed above, is unrelated to the division of property.

What effect does the length of the marriage have on property division?

The length of the marriage is one of the factors considered by the court in the division of property. As a practical matter most North Carolina judges split the property equally without regard to the length of the marriage.

Is there such a thing as separate property? What does it take?

Separate property is property (1) owned before marriage, (2) inherited property and (3) gifts from someone other than the spouse. The court will allow the party claiming separate property to trace the property from one asset to another. For instance, if the Wife had $10,000 in cash before marriage and used the funds, during marriage, buy a car, then the car would be separate property. Separate property used to purchase jointly held real estate, however, becomes marital property. This rule related to real property is the one exception to the tracing provisions.

Any special rules for the marital home?

If the marital home is titled jointly then it is marital property and gets divided, even if one party made a substantial separate property contribution to the purchase of the home. The court has the authority, however, to divide the residence in any way it wishes so an equal division of the home is not required.

How do retirement plans get divided?

Retirement plans are valued and divided like all other property in North Carolina.

Other issues in North Carolina:

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