Dividing property during divorce can be very complicated. In North Carolina, each spouse has an equitable interest in all marital property acquired during the course of the marriage. An equitable (or “fair”) division of marital property, however, does not necessarily mean that both parties will receive the same amount. Sometimes one spouse is awarded more than the other spouse.
The court’s first task in a property division case is to determine what constitutes marital property. As a general rule, marital property is all property acquired by either spouse during the marriage. Separate (or “non-marital”) property is generally categorized as all property acquired before the marriage, including inherited gifts.
Here are some examples of marital property:
- Wages or salary earned during the marriage
- Money held in a retirement account funded during the marriage
- Money held in a joint or separate bank account funded during the marriage
- Houses purchased during the marriage
- Cars purchased during the marriage
- Pets purchased during the marriage
- Gifts between spouses during the marriage
- Gifts to the marital couple during the marriage
- Credit card debts accumulated during the marriage
If divorcing spouses cannot agree on how marital property should be divided, they can file an action in court and ask the judge to make an equitable distribution based on evidence presented by each party.
When deciding equitable distribution cases, the court follows a three step process:
- First, the judge will determine which property is marital and which is separate.
- Second, the judge will assign a fair market value to each piece of marital property.
- Third, the judge will equitably distribute the marital property between the parties. Remember, this does not necessarily mean “equally.” The judge may distribute the marital property unequally if the facts warrant it.