What is Marital Property?
In North Carolina, marital property is generally defined as property acquired during the marriage. North Carolina follows the principle of equitable distribution, meaning that in a divorce, marital property is divided fairly but not necessarily equally between spouses.
These are terms that many of us going through a divorce will all too recognize as we navigate this new chapter in our lives. In order to shed some light on the matter, let us examine North Carolina’s property division laws.
The Procedure for Fair Marital Property Distribution
1. Marital Property Identification and Classification.
Identifying the parties’ assets and categorizing each piece of real and personal property as either marital, separate, or divisible is the first stage in equitable distribution, or the partition of property in a North Carolina divorce.
Marital property, or what you obtained while married but before you physically split, is the first main category.
Separate property is the second major category of property to identify. We won’t define it formally here, but to put it simply, separate property is defined as property that was acquired before marriage, during marriage but expressly designated as separate by law, or manifestly acquired after separation.
For classification purposes, the last type of property is divisible, a hybrid category. The term is most frequently used to describe assets obtained after the date of separation that were obtained using marital assets or finances. Items acquired with the proceeds of a divorce from a married couple’s savings are common instances of divisible property.
Importance of these classifications
The marital estate will only contain divisible property and marital property for division. The question of whether particular property items are separate or marital property is a contentious issue in many equitable distribution cases. The ultimate award may be significantly impacted financially by these classification choices.
Typical challenging problems that are hard to categorize
1. Companies own options and grants
2. Retirement Plans
3. Assets and holdings in real estate
4. Collections of Intellectual Property
5. Recurring debts
6. Any numerous other concerns
7. The regulations that control
8. classification are extremely intricate.
9. Combined Assets
It is crucial that you have a skilled divorce lawyer on your side because of this.
2. Marital Property Valuation
Following the Judge’s determination of what constitutes “marital property,” the Court will apply the “fair market value” method to evaluate the property. In order to resolve any disputes, the judge will hear testimony from each side regarding the asset’s or debt’s value and who should get it.
Values of comparable goods for sale
Opinions, appraisals, and any other techniques that the judge deems appropriate and useful in establishing a fair market value
3. Property Division in Marriage
The division process is the last phase, in which the Court assigns each asset to a particular party, with that party receiving the item’s assessed fair market value.
Unless the Court determines that an unequal divide is appropriate in the given circumstances, the Judge is legally compelled to equalize any partition. The variables listed in NCGS 50-20(c) (1–12) may be used to support an unequal distribution.
Factors Consider in division Of marital property
The division of marital property is influenced by various factors, including:
1. Jurisdictional Laws
Different regions have distinct laws governing marital property division.
2. Duration of Marriage
Longer marriages may result in a more equitable distribution of assets.
3. Financial Contributions
Contributions to the marriage in terms of income, property, or other financial resources are considered.
4. Non-Financial Contributions
Contributions such as homemaking, childcare, and support are also taken into account.
5. Earning Capacity
The ability of each spouse to earn income in the future may affect the division.
6. Health and Age
The health and age of each spouse can be considered when determining the fair division.
Prenuptial or postnuptial agreements, if present, can significantly influence the division.
Liabilities accumulated during the marriage are usually part of the overall division.
9. Custody Arrangements
If children are involved, custody arrangements may impact the property division.
In some jurisdictions, fault or misconduct during the marriage could influence the division.
It’s crucial to consult with legal professionals to understand how these factors apply to your specific situation, as laws vary and interpretations can differ.
Finally, we have to recommend that anyone who may have to divide their assets during a separation or divorce speak with a skilled divorce lawyer. This article’s material is solely intended for North Carolina residents and is broad in nature. Property classification, valuation, and division can be influenced by a multitude of circumstances that are outside the scope of time and space. The counsel and assistance of an experienced family law attorney is simply invaluable.
Frequently Asked Questions About Marital Property
1. What is marital property?
Marital property refers to assets and debts acquired during a marriage, typically subject to division in the event of divorce.
2. How is marital property divided?
Division varies by jurisdiction. It can be equal, equitable, or based on various factors like contributions, duration of marriage, and future earning capacity.
3. What is separate property?
Separate property includes assets owned before marriage, gifts, and inheritances. Usually, it remains with the original owner in divorce.
4. Does a prenuptial agreement affect property division?
Yes, a prenuptial agreement outlines how assets and debts will be divided, potentially influencing the court’s decision.
5. Are retirement accounts considered marital property?
Yes, retirement accounts accumulated during marriage are often subject to division.
6. How does debt division work in divorce?
Debts acquired during marriage are typically divided along with assets, considering various factors like who incurred the debt and for what purpose.
7. Can one spouse be entitled to alimony?
Alimony, or spousal support, may be awarded based on factors like income disparities, duration of marriage, and financial need.
8. What happens to the family home?
The fate of the family home varies; it may be sold, one spouse may buy out the other, or it may be awarded to the custodial parent.
9. Does fault in the divorce impact property division?
In some jurisdictions, fault (like adultery or abuse) may be considered, but many jurisdictions follow a no-fault approach.
10. How can I protect my assets during marriage?
Consider a prenuptial agreement, maintain clear records of separate property, and communicate openly about finances with your spouse.