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Understanding property division in a North Carolina divorce

There are inevitable issues in any North Carolina divorce. Along with the personal upheaval and dramatic life changes, financial concerns may come to the forefront. While other parts of a divorce – child custody, spousal maintenance, visitation rights – will take precedence, property division is not far behind. In the state, the law calls for equitable distribution of property meaning that it will be divided fairly. That, however, does not mean that every item the couple has in its possession will be split. Understanding the difference between marital property and separate property is imperative.

Marital property vs. separate property

Marital property means that it was acquired and maintained from the time the couple was married until they separated. Obviously that will involve a home, an automobile and other properties. However, it also includes income, retirement funds and other financial acquisitions that occurred in that time. For parties that purchased a home and lived in it – regardless of which side drew most of the income and paid for it – the home may be considered marital property.

Separate property is anything that was acquired by either spouse prior to the marriage. If the previously mentioned home was owned by one spouse beforehand, it might be categorized as separate property. It is important to note that property that was given to a person after they were married as a gift or as part of an inheritance will be separate property despite the person being married at the time. If there is another property accrued by exchanging separate property for it, it will also be separate property even if it is titled to both spouses. There could be a stipulation that says it is owned by both meaning it is marital property. If separate property increased in value during the marriage, that increase will also be separate property.

Equitable distribution is not automatically 50-50 like community property

While some states like California view items acquired after the couple is married as belonging to both and will divide based on community property laws, North Carolina does not do that. Equitable distribution leaves it in the hands of the court to decide how to fairly split the property meaning that it may not be shared equally. Factors that will be considered include how long the couple was married, the level of contribution to the property acquisition and income.

Legal assistance may be key

Some couples can negotiate a reasonable agreement that is satisfactory to both. If a stay-at-home parent wants to retain the marital home so the children can live there, this could be negotiated. Other cases are contentious with the sides in rampant dispute over who owns what and how it should be allocated. The first step in a divorce with property division at its center is to understand marital property and separate property. It is wise to have legal advice throughout the process. Consulting with experienced legal professionals can be useful to address these and any other challenge that comes up in a family law case.


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