Equitable Distribution

The division of marital and divisible assets and debts in North Carolina is handled in a process known as “equitable distribution.” The Courts undertake a step-by-step analysis during which marital property is identified, valued and distributed equitably. While there is a presumption that such distribution is equal as between spouses, this is not the guaranteed result. Equitable distribution is often affected by the many factors set out for consideration in our general statutes. Factors which may affect distribution include the age and physical and mental health of the spouses, the income, property, and liabilities of each spouse at the time the division of property is to become effective, any support obligations a spouse may have arising out of prior marriages, expectations a spouse may have in a pension, retirement or deferred compensation benefit that is not marital property, the need of a parent with custody of a child of the marriage to occupy or own the marital residence and to use or own its household effects, efforts by a spouse to support or assist in educating or developing the other spouse’s career or profession, tax consequences to each spouse, and many others. Absent from the list of distributive factors the court may consider is marital misconduct which is not financial in nature.

“Marital” property may include real, personal and intangible property that is acquired during the marriage and prior to the date of separation by either of the spouses. It is not necessarily important or consequential who purchased the asset, who maintained it during the marriage or how it was titled. The same is true of debts and financial obligations which arose during the marriage. Divisible property includes passive appreciation or diminution in value of assets between the date of separation of the parties and the date of distribution of the marital estate by the Court.

Property may be divided in North Carolina by agreement between you and your spouse pursuant to a Separation and Property Settlement Agreement. You have the right in North Carolina, unlike in many other states, to divide your property and your debts, however, you and your spouse see fit. There is no requirement of equal distribution, and you may negotiate and offset distributions of individual assets and debts according to your individual needs and desires. If the division of your marital estate, meaning your total portfolio of assets and debts, is contested, you will need to seek the assistance of the Court. Proper planning can often mean the difference in preserving valuable assets and assigning responsibility for the payment of debts in order to protect your credit during separation. At Hodges Coxe Potter & Phillips, LLP, we have the experience and knowledge to counsel you on how best to prevent the unnecessary disappearance, conversion or waste of your valuable assets and to secure access to and use of your property prior to distribution. Contact us today for a free consultation and to discuss your rights at (910) 772-1678.

Practicing in this Field

Colleen H. Moran

Attorney at Law

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Equitable Distribution