In North Carolina, the division of marital assets isn’t a straightforward 50/50 split. Instead, assets are distributed equitably, as outlined in North Carolina Law. This means removing property before divorce is okay for necessities, but frivolous spending to harm your spouse could backfire in court. Keep reading to find out how it all works.
What Constitutes Marital Assets in North Carolina?
According to North Carolina General Statutes § 50-20(b)(1), marital property includes any asset acquired by either spouse during the marriage. This encompasses income, savings, real estate, vehicles, furniture, and other valuable items.
The law presumes that all property acquired during the marriage is marital property, regardless of how it’s titled. Even if an asset is solely in one spouse’s name, it may still be subject to equitable distribution during divorce proceedings.
Separate Property: What’s Yours Alone?
Separate property is defined under North Carolina General Statutes § 50-20(b)(2) as any asset:
- Owned by either spouse before the marriage
- Gifted to only one spouse during the marriage
- Inherited by only one spouse during the marriage
For instance, if your spouse received a set of antique collectibles from a family member, those would be her separate property. Separate property is not subject to equitable distribution and remains yours after the divorce.
Equitable Distribution: More Than Just a 50/50 Split
In North Carolina, you and your spouse can agree on how to divide assets. If you reach an agreement, the court will generally honor it. However, if you can’t agree, the court will decide based on equitable distribution principles as per North Carolina General Statutes § 50-20(c).
Equitable distribution doesn’t always mean a 50/50 split. The court considers various factors, such as each spouse’s income, the length of the marriage, and contributions to marital assets.
What Does “Equitable” Really Mean?
The court considers multiple factors to determine what constitutes an equitable distribution of assets during a divorce process. Property division factors, as outlined in North Carolina General Statutes § 50-20(c), include:
- Income and property of both spouses
- Length of the marriage
- Debts and liabilities
- Child or spousal support obligations from previous marriages
- Contributions to the marital home and assets
Fault in causing the divorce generally doesn’t affect asset distribution unless one spouse’s actions resulted in a significant loss to the marital estate.
It’s crucial to consult with an experienced family law attorney to protect your interests and ensure a fair division of marital assets. Legal guidance can help you navigate the complexities of North Carolina’s equitable distribution laws.
3 Examples of When Fault Affects Asset Distribution
While North Carolina’s equitable distribution laws generally don’t consider marital misconduct when dividing assets, there are exceptions. Here are three scenarios where one spouse’s actions could significantly impact the division of marital assets:
1- Gambling Away Marital Assets
Imagine one spouse develops a gambling addiction and uses marital funds to fuel this habit. Over time, a substantial portion of the couple’s savings gets depleted. In this case, the court may consider this behavior as causing a significant loss to the marital estate. As a result, the non-gambling spouse may receive a larger share of the remaining assets to offset the loss.
2- Extravagant Spending on an Affair
Suppose one spouse engages in an extramarital affair and spends a considerable amount of marital funds on lavish gifts, vacations, or other expenses for their paramour. This spending could be seen as a deliberate act to devalue the marital estate. The court might then award the innocent spouse a more significant portion of the remaining marital assets to compensate for this loss.
3- Deliberate Devaluation of Business Assets
Let’s say one spouse owns a business that is considered a marital asset. If that spouse intentionally drives the business into the ground out of spite or to reduce its value before asset division, this could be seen as causing a significant loss to the marital estate. The court may adjust the division of other assets to make up for this deliberate devaluation.
In each of these examples, the spouse’s actions led to a significant loss of marital assets, which could influence how the court divides property during the divorce proceedings. Always consult with a qualified attorney to discuss the specifics of your situation.
Caution When Removing Assets Before Divorce
While it may be tempting to remove assets before filing for divorce, doing so without proper consideration can have legal repercussions.
For example, emptying a joint bank account could be seen as an attempt to financially harm your spouse.
Instead, consider drafting a temporary separation agreement that outlines responsibilities and living arrangements. A temporary separation agreement can serve as a crucial roadmap for couples navigating the complexities of divorce. This legally binding document outlines various aspects of your separation, providing clarity and structure during a challenging time.
You can specify financial responsibilities, such as who will pay for
- Household bills
- Mortgages
- Car payments
You can also cover child custody arrangements, spousal support, and even guidelines for marital conduct during the separation period.
Drafting a comprehensive temporary separation agreement can help avoid misunderstandings and conflicts, making the eventual process of asset division smoother.
An experienced family law attorney can guide you through this process to ensure your agreement aligns with North Carolina law and adequately protects your interests.
We’re Here to Help
At Cape Fear Law, we understand that the complexities of marital asset division in North Carolina can be overwhelming. That’s why our dedicated legal team of family law and divorce attorneys is committed to guiding you through every step of the process.
From drafting temporary separation agreements to advice on equitable distribution, we aim to protect your financial interests and secure a fair resolution for your case. If you’re contemplating divorce and concerned about how to handle marital property, don’t hesitate to reach out.
Contact us today for a consultation, and let us help you make informed decisions that safeguard your future.