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Equitable Distribution

Going through a divorce is an emotional time, and dividing marital assets and liabilities often leads to arguments. In North Carolina, the principle of “equitable distribution” guides this process. The courts generally consider a 50/50 split to be fair, but there are exceptions. The outcome is generally better if both parties can agree on how assets and liabilities will be divided without getting the courts involved.

Does everything get divided in half?

Usually, but not always. While equality is an underlying principle, equitable distribution prioritizes fairness based on a range of factors specific to each marriage. Think of it as dividing a pie: while both spouses deserve a satisfying slice, the size may differ based on their contributions and needs.

What assets are involved?

Most assets acquired during the marriage are subject to distribution, including:

  • Real estate: Houses, vacation homes, or other properties obtained during the marriage.
  • Financial holdings: Bank accounts, investments, retirement accounts, and any business interests acquired jointly.
  • Vehicles: Cars, motorcycles, boats, or any other vehicles purchased during the marriage.
  • Personal belongings: Jewelry, furniture, artwork, collections, and other valuables acquired jointly.

Note that money or items inherited or gifted to one party during the marriage are not considered marital property.

What about loans and other liabilities?

As the spouses are considering who gets the house, cars, and cash, it is important to remember that debts acquired during the marriage must also be divided. As an example, if the parties agree that one will keep the marital home and “buy out” the other person’s interest, the joint loan will need to be paid off and a new loan acquired by the spouse retaining possession of the property. If there are joint credit cards, it is generally recommended that the accounts be closed as soon as the parties separate, so no additional joint debt is added to the accounts.

What about things I had before marriage?

Assets owned individually before the marriage, such as family heirlooms or personal collections, typically remain the sole property of the original owner. That said, there are times that if these items increase substantially in value during the marriage, the difference between their original and new value might be considered marital property. If these assets are substantial, it may be worth including them in a prenuptial agreement.

Who decides how things are divided?

Ideally, spouses work collaboratively to reach an agreement through amicable negotiation. Optionally, a mediator can help with the process. These options empower the parties to tailor the distribution to their unique circumstances. If the parties cannot reach an agreement, the court steps in, weighing factors such as the duration of the marriage, the age of the parties, income and earning potential of each spouse, tax implications, contributions made to the marriage, both financial and non-financial, and the needs of each spouse.

What if things get complicated?

Legal challenges can arise, particularly regarding complex assets or disagreements about fair distribution. This is especially common in cases where the parties own a business or other high value or unique assets or have significant debt. There may also be challenges in valuing retirement assets and pension plans, especially if one spouse has earned significantly more over the course of the marriage. In such cases, seeking guidance from a seasoned divorce attorney is crucial. The attorney can help navigate the intricacies of the process, advocate for your best interests, and help achieve a successful outcome.

Ensuring a Fair Outcome

Equitable distribution is a nuanced process, demanding clear understanding and skillful navigation. An experienced divorce attorney can help achieve a fair and satisfactory resolution for both spouses. Contact Brinkley Walser Stoner today to speak with one of our family law attorneys for crucial support and expert guidance throughout the equitable distribution process.