Property Division and Unequal Distribution
During a marriage, a husband and wife will more than likely accumulate property of various types ranging in liquidity and scope from cash in a checking account to property and retirement accounts. The property subject to division following the end of a marriage includes both assets and debts. However, only certain property is subject to division. The “marital property” is that property which was acquired from the date of marriage until the date of separation. Separate property is the property which one of the parties had acquired before the date of marriage. Separate property could be anything from furniture, to cars, and even stocks and bonds.
In what is often a fairly universal constant, the process of dividing the marital property following the dissolution of a marriage typical allocation is about 50/50 for each of the parties. This means that if the spouses have $100,000 in assets and $20,000 in debts, a 50/50 split would result in each spouse being awarded $40,000 (100,000 – 20,000 = 80,000/2 = 40,000).
However, there are certain situations in which a court would determine that an equal distribution is not entirely equitable. In these circumstances, a court may deviate and award one of the spouses more than 50% of the marital property. There are a number of factors that a judge will look at in determining the ratio of property to be allocated to each of the spouses. Some of these factors include obligations arising out of a prior marriage, the duration of the marriage, the age and health of the spouses, any contribution from one spouse to assist the education or career development of the other spouse. For example, if one spouse stayed at home to care for the children while the other spouse went to business school for four years and went on to acquire a well-compensated position. A court could look at this situation as potentially being an unequitable distribution to split the assets and debts 50/50 given the time and effort invested would unfairly favor one party over the other.
When spouses separate, they may prefer to not have their private lives put on display in a public court. This is why a private settlement agreement is often favored by parties who can come to an agreement as to the distribution of their property. Parties can be creative in crafting settlement agreements which can have equal or unequal property distributions as long as both parties are amenable to the compromise. Following an agreement on the method of distribution, the parties will sign a separation and property settlement agreement much like they would a normal contract.
The attorneys at Arnold & Smith, PLLC have years of experience dealing with property distribution both in court and in the form of out of court settlement agreements. Our experienced Divorce attorneys including two North Carolina Board Certified Specialists in Family Law are here to help with these and other divorce related matters. Contact us today to schedule a consultation at 704-370-2828 or view additional family law related articles and frequently asked question videos here.