It is in North Carolina, the process of dividing your property is called Equitable Distribution. North Carolina General Statute SS 50-20 regulates this procedure. There are two prerequisites to file the claim for equitable distribution.
1.) You must have a marriage contract with the individual who you are making the claim against; and,
2.) You must be divorced by your partner.
If any of these requirements is not satisfied If either of these two requirements is not met, the court will not have the authority to consider your case.
It is important to remember that you must submit an equitable share claim prior to the time the divorce decree is approved. If you do not file your claim, then you’ll be denied the option of going to the court to seek the division of your property.
It is typical for divorced couples to settle any issues related to equitable distribution within the form of a settlement agreement (aka an agreement for separation and property settlement or SAPS in short).
Impact from Marital Fault
North Carolina does not consider marital misconduct or fault in the division of marital assets, as long as it does not have an economic impact on spouse’s financial health. That is having your spouse was involved in an affair will not be able impact the way your property is divided in the same way, however, if your spouse made significant use of marital assets to cover the affair, it might have an impact.
What happens when the Courts conduct an analysis in accordance with the Equitable Distribution Statute
When deciding on the best way to divide your marital estate, courts use a simple analysis. The first step is to categorize all your assets. There are three categories in property, which the judge may pick from.
- Marital Property. It is property purchased by one spouse or the other during the marriage, but prior to any separation and is owned by the present owner. There are many variations and complications within this definition that are in reality, beyond that of the scope and content in this guide.
- Separate Property. Property acquired prior to the marriage, property acquired through inheritance or gift during the marriage, as well as licenses for professional and business that will expire on the transfer.
- divisible property. This is property acquired from the couple after separation and up to the time of distribution. In general, divisible property refers to passive decreases or increases that are derived from marital properties, debts, or income derived by marital properties.
When the judge is able to classify the property then the court must assign an amount of value on the divisible property and the marital property. The marital property will be valued at the time of separation, whereas divisible property is valued at the time when the court allocates the property.
In addition, the judge must allocate assets “equitably”. Equitably generally refers to equally, however there are some instances where an equal distribution may not necessarily be equitable. The judge will take into consideration 12 factors in dividing the divisible and marital property including, but not restricted to, the amount of income earned by the couple, the duration of marriage, the liquid or non-liquid nature of the property, as well as any other element that the court might wish to look at.
Source of the Funds Rule
North Carolina follows what is called”the “source of money” rule in determining the issue of whether an item is marital. This means it is that courts consider the source of the money that are used to purchase the property in order to determine if it is separate or marital property.
If, for instance, you buy a automobile when you divorced with your partner, under what is considered marital property the car will not be considered as marital property. If, however, the car was bought with cash taken from an account of the marital since the source of funds that were used to purchase the car was marital, the car itself is marital property as well. The consequence of this law is that you could own property that is marital and distinct in its nature (if you, for instance that you utilized inherited funds in order to buy the car).