Difference between revisions of "Equitable Distribution"
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==When Can a Lawsuit be Filed== | ==When Can a Lawsuit be Filed== | ||
You can [[file a lawsuit]] for equitable distribution anytime after you and your spouse begin living in separate homes<Ref>[https://www.ncleg.net/enactedlegislation/statutes/html/bysection/chapter_50/gs_50-21.html#:~:text=(a)%20At%20any%20time%20after,in%20the%20cause%20as%20provided §50-21(a)]. "At any time after a husband and wife begin to live separate and apart from each other"</ref> but before the court signs a divorce decree.<ref name="fiftyeleven">[https://www.ncleg.net/enactedlegislation/statutes/html/bychapter/chapter_50.html § 50-11(e)]. "An absolute divorce obtained within this State shall destroy the right of a spouse to equitable distribution under G.S. 50-20 unless the right is asserted prior to judgment of absolute divorce..."</ref> Since the spouses have to live in separate homes for at least one year before filing for a divorce decree,<ref>[https://www.ncleg.net/enactedlegislation/statutes/html/bychapter/chapter_50.html § 50-6]. "...if and when the husband and wife have lived separate and apart for one year..."</ref> there is always at least a one-year window to pursue equitable distribution. | You can [[file a lawsuit]] for equitable distribution anytime after you and your spouse begin living in separate homes<Ref>[https://www.ncleg.net/enactedlegislation/statutes/html/bysection/chapter_50/gs_50-21.html#:~:text=(a)%20At%20any%20time%20after,in%20the%20cause%20as%20provided §50-21(a)]. "At any time after a husband and wife begin to live separate and apart from each other"</ref> but before the court signs a divorce decree.<ref name="fiftyeleven">[https://www.ncleg.net/enactedlegislation/statutes/html/bychapter/chapter_50.html § 50-11(e)]. "An absolute divorce obtained within this State shall destroy the right of a spouse to equitable distribution under G.S. 50-20 unless the right is asserted prior to judgment of absolute divorce..."</ref> Since the spouses have to live in separate homes for at least one year before filing for a divorce decree,<ref>[https://www.ncleg.net/enactedlegislation/statutes/html/bychapter/chapter_50.html § 50-6]. "...if and when the husband and wife have lived separate and apart for one year..."</ref> there is always at least a one-year window to pursue equitable distribution. However, you can sign and notarize a post-nuptial agreement during the marriage or a separation agreement in anticipation of separation, if both spouses reach an agreement prior to moving into separate homes.<ref>[https://www.ncleg.net/enactedlegislation/statutes/html/bysection/chapter_52/gs_52-10.html § 52-10(e)]. "Contracts between husband and wife not inconsistent with public policy are valid..."</ref> | ||
If | If a court already signed a divorce decree secured after proper, normal service of process,<ref>[https://www.ncleg.net/enactedlegislation/statutes/html/bychapter/chapter_50.html § 50-11(e) and (f)]. Describing exceptions for lawsuits for divorce secured through improper service or through service by publication.</ref> both spouses will own whatever property is in their name. If both spouses are still living together, either one spouse can move out or one spouse can try to evict the other through a "[[Divorce from Bed and Board]]" lawsuit. | ||
==Financial Disclosures== | ==Financial Disclosures== | ||
Revision as of 11:14, 12 October 2022
| Equitable Distribution | |
| Statutes: | N.C.G.S. § 50-20 N.C.G.S. § 50-21 |
| Description | How property and debt are distributed between the spouses |
| Takeaway | Most of the time, most property/debt is divided 50/50, regardless of which spouse's name is on the property or debt. |
Equitable Distribution means the fair distribution of property and debt between the spouses in a divorce. The courts generally presume a 50/50 distribution is fair,[1] regardless of which spouse is on a title or account. However, there are many rules and exceptions.[2] There are three steps to determining a 50/50 distribution: (1) list and categorize property/debt, (2) value each item on the list, (3) distribute the property/debt between the spouses.
When Can a Lawsuit be Filed
You can file a lawsuit for equitable distribution anytime after you and your spouse begin living in separate homes[3] but before the court signs a divorce decree.[4] Since the spouses have to live in separate homes for at least one year before filing for a divorce decree,[5] there is always at least a one-year window to pursue equitable distribution. However, you can sign and notarize a post-nuptial agreement during the marriage or a separation agreement in anticipation of separation, if both spouses reach an agreement prior to moving into separate homes.[6]
If a court already signed a divorce decree secured after proper, normal service of process,[7] both spouses will own whatever property is in their name. If both spouses are still living together, either one spouse can move out or one spouse can try to evict the other through a "Divorce from Bed and Board" lawsuit.
Financial Disclosures
Once a lawsuit is started, each spouse is required to prepare and share an "Inventory Affidavit" disclosing all of their assets and debts. Additionally, the spouses have to sign a "Certification of Initial Disclosures" promising all of the relevant evidence has been shared with the other spouse. The spouse that initially files an equitable distribution claim with the court has 90 days after serving their claim on the other spouse to provide an inventory affidavit. The other spouse has 30 days later to provide their own inventory affidavit.[8]
The initial affidavit is not binding at trial.[8] Each courthouse uses different forms for the disclosures and for providing legally binding affidavits prior to trial. If one spouse refuses to provide disclosures, the other spouse can file a "Motion to Compel" asking the court to order the spouse to provide financial disclosures.
Categorization
Whether you negotiate, go to trial, or provide mandatory financial disclosures for court, you'll need to know how to categorize each item of property/debt as "marital," "divisible," or "separate."
Marital
"Marital Property" includes any property or debt acquired during the marriage and before the separation date,[9] except for property acquired by inheritance or gift[10] or debts that did not benefit the marriage.[11] Most of the time, most of the property and debt of either spouse is "marital". Marital property includes things like pensions, retirements, or partially-earned future payments.[9]
Divisible
"Divisible property" is any value or loss resulting from marital property after the separation date.[12] For example, rent from a home both spouses own, changes in value in a mutual fund, or payments received for work performed during the marriage.[12] It does not include gains or losses in value to marital property that are caused by one spouse's labor, rather than passive market conditions.[12]
Separate
Separate property includes property acquired (a) before the marriage, (b) after the separation date, (c) by inheritance or gift, (d) from other separate property, and/or (e) professional or business licenses.[13] However, a gift from one spouse to the other is usually considered marital, unless the spouse's indicated otherwise when the gift was made.[13]
Value
Once property is categorized, the value of each item as of the separation date must be determined.[14] Except with divisible property, this is not the item's current value, but the value as of the separation date.[14] If you and your spouse are cooperating, any dispute over value can usually be resolved by agreeing on an appraiser. If you and your spouse are not cooperating, you may need to pay an appraiser to appear in court as an expert witness. However, you can also use other (less expensive) evidence as to something's value.
Distribution
At the end of the process, a judge or agreement distributes the property and debt between the spouses. Although the court can distribute property any way the judge feels is fair, there is a strong presumption in favor of a 50/50 distribution.[15] That doesn't mean a couch needs to be cut in half so that each spouse can have their share, but each spouse walks away with 50% of the total net value of everything that is considered "marital".[16] Small adjustments from 50/50 are common, when one spouse paid for expenses that both spouses were responsible for.
Contact an Attorney
This wiki is provided by North Carolina divorce lawyer David King and his firm King @ Law. You can learn more about King @ Law at www.kinglawnc.com. If you are looking to hire an attorney, have questions, or would like to contribute to this wiki, you can contact attorney King using any of the following methods:
- Schedule a Consultation
- Start a Facebook Chat
- Email: david@kinglawnc.com
- Voicemail: 919 706 5322
References
- ↑ §50-20(c). "There shall be an equal division by using net value of marital property and net value of divisible property unless the court determines that an equal division is not equitable. "
- ↑ See §50-20(b)(2) regarding "separate property" such as inheritance, gifts, and pre-marital property that are not divided 50/50.
- ↑ §50-21(a). "At any time after a husband and wife begin to live separate and apart from each other"
- ↑ § 50-11(e). "An absolute divorce obtained within this State shall destroy the right of a spouse to equitable distribution under G.S. 50-20 unless the right is asserted prior to judgment of absolute divorce..."
- ↑ § 50-6. "...if and when the husband and wife have lived separate and apart for one year..."
- ↑ § 52-10(e). "Contracts between husband and wife not inconsistent with public policy are valid..."
- ↑ § 50-11(e) and (f). Describing exceptions for lawsuits for divorce secured through improper service or through service by publication.
- ↑ 8.0 8.1 §50-21(a)
- ↑ 9.0 9.1 §50-20(b)(1). "Marital property" means all real and personal property acquired by either spouse or both spouses during the course of the marriage and before the date of the separation of the parties, and presently owned"
- ↑ §50-20(b)(2). "Marital Property...except property which is separate property under subdivision (2) of this subsection... (2)...acquired by a spouse by devise, descent, or gift during the course of the marriage"
- ↑ Warren v. Warren, (NC App, June 16, 2015). Finding that student loan debt was not marital, when it only benefited the one spouse's future prospects.
- ↑ 12.0 12.1 12.2 §50-20(b)(4)(a). "...appreciation and diminution in value of marital property... except that appreciation or diminution in value which is the result of postseparation actions or activities of a spouse"
- ↑ 13.0 13.1 §50-20(b)(2).
- ↑ 14.0 14.1 §50-21(b). "For purposes of equitable distribution, marital property shall be valued as of the date of the separation of the parties..."
- ↑ §50-20(c). "There shall be an equal division by using net value of marital property and net value of divisible property unless the court determines that an equal division is not equitable."
- ↑ §50-20(e). "...it shall be presumed in every action that an in-kind distribution of marital or divisible property is equitable."