How is Property Divided in a North Carolina Divorce?

In a North Carolina divorce, if the two spouses cannot reach a divorce settlement for the division of property, a family law judge will divide the assets according to a concept known as equitable division. A common misunderstanding is that ‘equitable’ translates to an equal division of assets between the divorcing spouses. On the contrary, equitable distribution aims to achieve a fair distribution of assets based on several factors, including the length of the marriage, the contributions to the marriage, the value of the separate property, and the financial situations of the divorcing spouses. A family law court will consider these many factors to determine what they believe is fair and just regarding a reasonable distribution of assets, which could ultimately result in an unequal division of assets and property. In some family law cases, one spouse may receive more assets due to economic disparities, non-monetary contributions to the family unit during marriage, and differences in the value of separate property.

Before discussing asset division in North Carolina divorces, it is essential to understand the three types of property under North Carolina law.

Separate property includes anything owned by either spouse before marriage, property acquired during the marriage by one spouse either as a gift or an inheritance, and property acquired after the date of separation. Marital property includes assets both parties acquired during the marriage (including marital debts). Only marital assets are subject to asset division under the law in North Carolina.

Additionally, there is divisible property. Divisible property often includes post-separation fluctuations in the value of the marital property and the property received after the date of separation. This type of property will be evaluated at the time of the divorce case instead of at the time of the official separation.

What Factors Are Considered When Determining How to Divide Property in a Divorce?

The following factors are considered in divorce cases in the division of assets:

• Financial contributions to marriage and the family unit will be considered. Family courts consider annual income, property acquisition, home repairs, and investments
• Non-financial contributions made by caregivers, homemakers, or in the effort to support the other spouse’s career will also be considered
• In divorce cases involving children, family law judges consider custodial arrangements and associated financial responsibilities of the parents when making asset division determinations
• The length of the marriage can signify different impacts on the division of assets. Longer marriages tend to result in a more equal distribution of assets, whereas short-term marriages are more likely to have an inequitable distribution of assets
• A family law judge will also assess the financial future of both spouses, including their financial needs, employability, potential for future economic growth, and earning capacity
• The health and age of both spouses will also play a role in the division of assets, as they could potentially impact financial independence and earning capacity
• If one of the spouses recklessly spent money or depleted marital assets during a legal separation, a family law judge will consider this when making equitable distribution decisions

What is a Separation Agreement?

Separation agreements are legal contracts written between two spouses. Legal matters such as property division, spousal support (or alimony), child custody, child support, and possession of the primary marital residence may be agreed upon in a separation agreement. Family law attorneys should always be consulted when preparing separation agreements, signing them, and making them official. You must never sign a separation contract without fully understanding the legal impact of every provision involved in those contracts.

If a husband or wife is unable to resolve issues with a separation agreement or decides not to sign the agreement, a court order may be necessary. Before a court has the authority to make such an order, one spouse must file a lawsuit against the other spouse. Once the lawsuit has been filed, a family law court can resolve legal issues such as child support, short-term spousal support, and property division.

What Are the Advantages of a Legal Separation?

The advantages of considering a legal separation include the following:

• During a long-term legal separation, the spouses may resolve their differences and avoid the need to get divorced
• Separated married couples retain shared benefits such as health insurance and health care coverage purchased during their marriage
• There may be certain tax benefits available to couples who remain married despite entering a legal separation
• In longer marriages, it is possible for one spouse to qualify for pension benefits or Social Security based on the other spouse’s employment history
• The division of marital assets and shared property may not be in the best interests of either spouse during the time of separation, which could make a long-term separation agreement advantageous in comparison to filing for divorce
• Long-term separations can be less complicated and confusing for family, children, and friends

Why Are Long Separations Not Ideal?

However, there are many disadvantages to long-term separations in North Carolina. If your separation extends for years, almost reaching the point where you forget you were even still married, you could put yourself and your legal interests at risk.

While living separately from your spouse, the debt you accrue is still shared between the spouses. This could show up in your credit report even if you have not seen your estranged spouse in many years.

If one or both spouses die during the legal separation, it could be more challenging to settle estate matters than it would have been had the divorce been finalized.

Changes to income or assets during the separation could result in unexpected changes to a divorce’s financial terms if you decide to file for one.

In some divorce cases, a once amicable legal separation can turn combative, forcing spouses to reach divorce terms in a high-conflict divorce case. This can often be more expensive, emotionally trying, and time-consuming.

Can Extended Separations Impact the Division of Assets in North Carolina Divorces?

Extended legal separations can impact equitable distribution in North Carolina divorces.

If one spouse moves to another state during the separation, jurisdictional issues may arise, leading to complications in the division of assets.

As circumstances change for either spouse, marital assets may appreciate or depreciate. When a separation has continued over an extended period, it may be necessary to seek experts’ opinions to properly evaluate assets.

Lengthy marital separations can lead to financial autonomy. This could potentially complicate the identification of marital assets subject to asset distribution.

Long-term separations can lead to heightened emotional stress between the spouses, which can affect their willingness to negotiate and reach a common ground in a divorce agreement.

Contact Our Law Firm to Schedule Your In-Depth Case Evaluation Today

If you are going through a divorce or merely considering a legal separation prior to divorce, it would be wise to hire professional legal representation to defend your rights and interests during these legal proceedings. Our family law firm has extensive experience representing clients in various family law cases, including legal separations, divorce, child custody, and more.

To learn more about our legal services and how we may assist you during this difficult time, please contact our Greensboro, NC, law office to schedule your initial consultation today. You can reach us at 336-770-2017.