In any divorce, decisions must be made about the division of marital assets and debt. This is true in North Carolina, where we divide these on an “equitable” (not necessarily equal) basis.
First, a determination needs to be made as to whether the asset or debt is part of the marital estate. The marital estate is made up of most types of property and debts accrued during the marriage. It can also include the increase in value of an asset that you had before the marriage, such as a house or stock portfolio.
It is important to understand that the person who holds the title to a certain asset may not always be the owner for the purposes of asset division. Simply because a car was titled in the name of one spouse does not necessarily mean that car belongs to that spouse alone. If the car was purchased during the marriage using marital assets, it would likely be found to be part of the marital estate.
Personal gifts to one spouse and inheritances are generally considered separate property, even if they were obtained during the marriage. Likewise, any property purchased during the marriage using separate property remains separate property of the purchaser spouse.
A third category of assets in the marital estate is known as divisible property. Divisible property is a form of marital property that includes any passive increase in value of this property since the date of separation. A common example of this is the interest increase on a marital bank account or the market increase on marital retirement account.
Once all the assets and debts are categorized as separate or marital in nature, the marital estate gets divided on an equitable basis. If you were to go to trial, the court would consider a variety of factors when dividing the assets and debts equitably. Some of those factors include:
- Each party’s income, property and liabilities
- Any support obligations from a prior marriage
- The duration of the marriage
- The physical and mental health of the parties
- If one parent has primary custody of the children, the need of that parent to occupy or own the marital residence and its household effects
- Either party’s expectation of a pension, retirement or deferred compensation plan that is not considered marital property
- Whether each party contributed directly or indirectly to the acquisition of the marital property, such as by being a spouse, parent, wage earner or homemaker
- Whether one party contributed to the education or career development of the other
- Any direct contribution to an increase in value of one party’s separate property during the marriage
- Whether the marital property is liquid or illiquid
- How difficult it would be to evaluate a component asset or an interest in a business, corporation or profession, along with the economic desirability of retaining that asset or interest intact and free from the other party’s interference
In some cases you or your spouse may be entitled to a greater than 50% share of the marital estate depending on the specific factors in your case. Working with your North Carolina divorce attorney, you can appropriately designate property as separate or marital and then negotiate the division of the marital estate or decide to take your case to trial.