How Property Division Works

How Property Division Works
in North Carolina

How equitable distribution and property division works

Classification and Identification of Property

All of the parties’ assets and debts must be classified based on their nature. However, first the court must identify if either spouse has any claim to the property in question. As a preliminary step, the court must determine the extent of the parties’ interests in the property in question. Afterward, the court may classify all of the property at stake.

In order to classify the parties’ assets and debts, the court applies the legal definitions of what constitutes marital and separate property to each and every property. The court must look at all of the available evidence and its own findings to draw a conclusion.

Not all property can be classified as either marital or separate and thus requires a third category. Assets or debts acquired after separation do not fall under the purview of either marital or separate property. Instead, the court will treat this property as a distributional factor.

Time and Manner of Acquisition

The time and manner in which a party has acquired a property are important to think about when classifying it. Past cases have created the view that acquisition is a dynamic process. A property is considered to have been “acquired” as soon as it is paid for. Any increase in the value of a separate property is distributable.

The court must first find out how much of the increase in a property’s value is attributable to either party, before it can equitably distribute it.

Cases of Dual Classification

In a few cases, the dual classification of property is also possible. One such case is where the spouse (who is not the owner) invests their income and efforts in a separate property during the marriage.

Another instance is where the efforts of a spouse to manage a separate property add to the value of that property to the extent that it would only be fair to view it as marital property.

Valuation of property

The court must set the net value of the parties’ marital property. The net value, in this case, is the market value of the property in question minus any encumbrances.

Distribution

Once the court has identified, classified and decided upon the net value of the parties’ marital property, its job is to now equitably (fairly) distribute that property. The Equitable Distribution Act asks for an equal division of the parties’ marital property. However, if the court finds such a division to be inequitable, it may decide against it.

In most cases, it is not possible to reverse or appeal an equitable distribution of marital property. That is, unless the court is found to have abused its discretion in that case.

Want to learn more? Learn the basics of Property Division in North Carolina.

Learn Property Division Basics

Getting Started

If you are wondering how long the divorce process is going to take or how much the trial will cost you, please do not hesitate to schedule a consultation at our Wilmington Office. Our office is located at 1015 Ashes Drive, Suite 104. We can help you map out the details of your divorce, giving you a powerful defense. Please call to schedule a consultation.

Take Action