When couples in North Carolina file for divorce, figuring out who gets what can be complicated. In legal terms, this process is called “equitable distribution.” It’s important to note that “equitable” doesn’t necessarily mean “equal.” Instead, it means the division will be fair, considering the circumstances of both parties involved.
Generally speaking, only the property and assets acquired during the marriage, known as “marital property,” are subject to division. Personal gifts and inheritance received during the marriage are exempt. Anything that either person owned before getting married, as well as the gift and inheritance mentioned above, is regarded as “separate property.”
The steps to divide assets
The process of dividing assets involves several steps. First, all the couple’s property must be identified and categorized as marital or separate. Next, the value of the marital property needs to be determined. Assigning value can include getting appraisals for real estate, retirement accounts, businesses, collections and art. Once everything is valued, the two sides or a judge can equitably divide the assets as they deem fair.
Factors that influence the court’s decision
While most divorces don’t go to court, the equitable division should weigh the same factors that a judge would:
- Length of the marriage: Longer marriages might see a more even split.
- Income and financial status: The higher-earning spouse will likely get a larger slice of the assets since their income paid for them.
- Working at home: While alimony or spousal support is increasingly rare, spouses who sacrificed career advancements for the family’s sake will likely get compensated for their investment in the marital partnership.
- Other obligations: A spouse may have financial commitments from a previous marriage, like alimony or child support.
- Age and health: This looks at a spouse’s realistic ability to work and support themselves.
- The grounds: Marital misbehavior like pre-separation adultery could affect the amount.
The court will also look for hidden assets and willful actions to decrease the value of an asset—like reckless spending or damaging property.
Reaching an agreement outside of court
While the court can make these decisions, many couples choose to reach an agreement on their own. They do this through direct negotiations, mediation, or arbitration. If both parties can agree upon the division of assets and other details, they can present their agreement to the court, which typically respects equitable and fair arrangements. Even if the couple goes to court over the division of assets, the judge will often ask couples to use outside negotiation to address as many details as possible.
Preparation is key
Spouses should collect all their financial records, like tax forms and bank statements, and make a list of everything they own and owe, both together and separately. Even if the couple chooses to avoid court, they can work with a family law attorney who can answer questions and ensure that the division is fair and equitable to better ensure a judge signs off on the arrangement.