It’s one of the most controversial and costly aspects of a divorce outside of children: property division. Though not everyone has kids to fight about, almost everyone has money or property. Even in cases where there isn’t the much of either (money or property), some couples can still find a way to argue, unhappy with their small share of the marital assets or angry that their soon-to-be-former spouse is walking away with more than they feel is deserved. So how does the process of equitable division work? To learn more about how property is divided in a Mooresville, NC divorce, keep reading.
First things first, in North Carolina the property division process is referred to formally as equitable division. Equitable division is a legal exercise that is clearly described by law, specifically, in Chapter 50 of the North Carolina General Statutes. Equitable division is a set of rules that must be followed by a couple that is divorcing to split the property they have acquired over the course of their marriage, known as the marital estate.
So what is the marital estate and what property is subject to equitable division? This can be a tricky question, because it is not always clear. Some people think that any property owned jointly or separately by the couple at the time of the divorce qualifies, but that is not the case. The rule is that only marital property is subject to equitable division. So what does this mean in practice? It means that only property acquired during the marriage is accounted for during the division process.
What about property that wasn’t acquired during the marriage? This is known as separate property, and it includes all of those things that were owned prior to marriage. The good news is that these items don’t automatically morph into joint property once the marriage occurs. They instead remain separate property during the marriage, provided they are treated as separate, though this can get confusing. A good example of the confusion is something like a car bought just before marriage. The fact that the car was bought prior to getting hitched would indicate it is separate property. However, this presumption can be overcome if it is shown that after the wedding, marital money was directed to paying for or maintaining the asset. In this case, the marital money can transform an item of separate property into a piece of the marital estate.
Are there other examples of separate property? Sure, in fact, a spouse can acquire property during the course of a marriage and still have it be deemed separate rather than marital property. For instance, gifts received during the marriage are usually deemed separate rather than marital property. If your parents decide to buy you a fancy ring or an expensive piece of art, that doesn’t automatically become property of your marriage, but remains yours. The same thing happens with inheritance. If you receive an inheritance from a loved one, provided you keep that money separate from joint money, it will remain your separate property even after divorce. Though complicated, an experienced Mooresville, NC family law attorney can help you categorize your assets and understand what to expect in the event of a divorce.
What about debts, are they split as well? So far we have spent a lot of time talking about assets, and while that is a lot more fun than liabilities, division of debt is also required. When equitable division occurs, the entire marital estate, assets and liabilities, get totaled up and divided. That mean debts that were incurred during the marriage, for houses, cars and credit cards, also need to be split up. Pre-marital debt remains separate property, just like pre-marital assets. Unless you refinance a debt and put your name on it, that debt will stay with the person who brought it into the marriage.
Is the split even? Though we might like a straightforward rule requiring simple 50/50 division, right down the line, that just isn’t the way things work. Judges want the ability to make decisions based on a variety of circumstances and have the discretion to deviate from a strictly even split of the marital estate. The goal is to be fair, not necessarily equal. That may mean in some cases one person gets a little more and another a little less. Again, the aim is fairness, not strict equality.
The experienced Mooresville, NC attorneys at Arnold & Smith, PLLC are familiar with many different kinds of family law matters and are eager to assist with any of your questions or concerns. If you are preparing for a divorce and want to ensure your assets are protected, please give one of our family law attorneys a call today to schedule an appointment.