North Carolina Marital Property Division

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In a divorce, everything from the marriage must be sorted out by the courts. Among the many tasks to be performed, a universal one is property division, specifically North Carolina property division.

No divorcing couple should discount the guidance of a licensed Family Law attorney. Property division laws vary from state to state and lawyers have the proper training/experience to tell the judge what a divorcing spouse wants and/or needs from the property division.

Property Division Divorce Laws in North Carolina

The purpose of North Carolina property division laws is to make sure that marital property is allocated to each spouse equally, generally in a 50-50 split. If a 50-50 split would not be equitable, then the court will divide the property equitably.

North Carolina marital property is divided under the considerations of North Carolina General Statute §50-20 but the trial court judge receives great discretion when converting North Carolina marital property into separate North Carolina divorce property.

North Carolina is an equitable distribution state. This means that with regard to North Carolina divorce assets, anything the spouses had pre-marriage usually will not be included in North Carolina divorce assets or North Carolina divorce property. The only property that comes into the court's distribution is that which is legally classified as property of the marriage.

What is considered Marital and Non-Marital Property?

Marital property is defined under North Carolina General Statute §50-20(b)(1) as “all real and personal property acquired by either spouse or both spouses during the course of the marriage and before the date of the separation of the parties, and presently owned.” This includes all vested and nonvested pension, retirement, and other deferred compensation rights.

There is a presumption that “all property acquired after the date of marriage and before the date of separation is marital property” unless classified as separate under North Carolina General Statute §50-20(b)(2).

Non-marital property is defined as:

  • Property acquired by a spouse before marriage
  • Property acquired by a spouse by bequest, devise, descent, or gift
  • Professional licenses and business licenses which would terminate on transfer
  • Property acquired in exchange for separate property

In addition, property acquired by gift from the other spouse during the course of the marriage shall be considered separate property only if such an intention is stated in the conveyance.

Dividing Assets and Debt

After the court decides which property is available for distribution, the next step is property valuation. The final step is the allocation of marital property.

Under North Carolina General Statute §50-20(c), the court considers a number of factors in dividing assets and debt. Some of these are:

  1. The marriage's length
  2. The parties' expectations for retirement, pension or other rights not included as marital property
  3. The parties' direct contributions to increased value in either party's separate property
  4. The parties' separate property, income & debts at divorce

Using statutory factors, judges decide how a marriage's assets should be divided. Here is a list of the most common property items and the most common allocation scheme used.

  • Cash: Divided equally among the spouses.
    • Example 1: A joint savings account has $5,000. The court would most likely split it between each spouse 50-50.
    • Example 2: A joint savings account has $5,000. One spouse contributed $4,000 and the other contributed $1,000. The amount may be divided in a 50-50 split or may be more balanced if the $1,000 contributor has fewer assets than the $4,000 contributor.
  • Retirement Plans: Divided based on the duration of the marriage at the time the benefits accrued, looking at the present value of the plan and/or survivor benefits.
    • Example 1: A spouse got benefits in a retirement plan after working for 25 years and was married for 20 of those years. The ex-spouse would be entitled to 50% of portion of the retirement plan that was acquired during the marriage.
    • Example 2: A spouse has an unvested retirement plan. No division takes place until the plan is payable to the spouse who has it.
  • Vehicles: Divided based on the values determined by the court. May be sold or given to a spouse outright.
    • Example 1: A car is owned by a spouse The car may be sold with the proceeds to be divided 50-50 or the car may be given to a spouse.
    • Example 2: A motorcycle has a shared title. The motorcycle may be sold with the proceeds divided 50-50 or the car may be given to a spouse.
  • Insurance: Determined based upon each spouse's health, availability of alternate insurance and premium payments from marital income.
    • Example 1: One spouse has covered the other under employer provided health insurance. The other spouse is in poor health and could not afford alternate health care coverage. The court may order the first spouse to continue covering that spouse for a set time and/or award money to the ailing spouse to get new coverage.
    • Example 2: One spouse has a life insurance policy where the ex-spouse is to get survivor benefits. If marital income was used to make payments on the insurance, the spouse may be entitled to 50% of the benefits.

Settling Disputes in a Divorce Case with Property and Asset Division

If a spouse is not complying with the property division order or you want to change the division, you may go back to court to seek enforcement or modification. The court will then decide how to proceed.

However, the trial court's determinations will not be changed by a higher court unless the division was clearly unjust.

Help From a North Carolina Property Divorce Lawyer

Retaining a North Carolina property divorce lawyer is key to getting the fairest result in the property division phase of a divorce. The lawyer can provide professional guidance, keep you informed of likely outcomes and help you present the best arguments to the trial judge handling the divorce.

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