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Yours, Mine or Ours?

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Amanda M. Wright | Charlotte Family Law Attorney

 

To some, the term “equitable distribution” may sound self-explanatory. To others, it may sound daunting. When spouses decide to go their separate ways, it is important to know how the property acquired before, during and after marriage will be divided.

The court starts with a presumption that equal is equitable. Why? North Carolina views marriage as a partnership where both spouses contribute to the economic circumstances of a marriage either directly or indirectly. The goal of equitable distribution is to allocate a fair share of the assets acquired by the marital partnership. However, the court’s presumption that equal is equitable can be rebutted. To rebut this presumption the court will consider factors listed in N.C. Gen. Stat. § 50-20 (c) to determine if one party should receive more than their “equal half.”

Prior to determining what an “equal half” would be, the property acquired before, during and after marriage must be classified, valued and then distributed.

In North Carolina, there are three major classifications of property: separate, marital and divisible.

  • Separate property is property acquired before the date of marriage. This includes property that is acquired in anticipation of marriage.
  • Marital property is property acquired from the date of marriage to the date of separation. There are exceptions that would cause property acquired during the marriage to be classified as separate property. For example, receiving an inheritance will be classified as separate property to the receiving spouse. Additionally, a gift from a third party to one spouse during the marriage is separate property. If property is classified as marital property, then it is subject to division between the parties, despite how the property is titled.
  • Divisible property describes the increase or decrease in value of marital property that occurs after date of separation. An important nuance that is associated with divisible property is that if any active actions/contributions are taken by one spouse that increases the value of marital property, the increase in value of the property will be considered separate property of the spouse who made the active contribution. For example, the active contributions to one’s 401(k) after separation will be classified as separate property and the party who actively contributes to the 401(k) after the date of separation is entitled to the amount he or she contributed. However, if due to market conditions, one’s 401(k) increases or decreases after the date of separation, the spouses will share in the increase or decrease in value that occurred after the date of separation.

The division of assets can become challenging when there is commingling of marital and separate property, large estates are involved or when a business is part of the marital estate. As such, it is important for anyone going through a divorce to consult an attorney who is well-versed in equitable distribution. At Hatcher Law Group, we strive to provide excellent legal services regardless of your financial circumstances. Please contact us to schedule a consultation with a family law attorney.

 

Amanda Wright is a family law attorney in Charlotte, NC. In addition to property distribution matters, she assists clients with divorce, child custody, child support and various other domestic related issues.

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