Separate vs. Marital Property in North Carolina
One of the most important concepts for spouses to learn as they approach divorce in North Carolina is the distinction between separate and marital property. This simple concept will come to define not only the course of the divorce but also the manner of your life after your marriage officially ends. While there are some concrete rules regarding separate and marital property, there is also room for discussion and flexibility. It is within these gray areas that a qualified divorce lawyer in North Carolina can help you walk away from your marriage with the financial security that you deserve. So, what exactly is the difference between separate and marital property?What are Separate Assets?
Separate assets include everything that you owned prior to the marriage. This might be a home, an apartment, a farm, stocks, cryptocurrencies, collectibles, retirement assets, cars, pets, and so on. As long you owned the property before you signed the marital contract, that property is defined as a separate asset under North Carolina law.
Separate assets also include everything you acquired after the date of separation. Note that the date of your separation is not the same as the official date of your divorce. In North Carolina, separation typically occurs when both spouses begin living apart. This date might also occur when they close joint bank accounts or cease “presenting themselves” as a couple in public. Whatever the case may be, the date of separation is important – and it might affect your financial security going forward.
Finally, separate property might include inheritance or gifts from third parties (not your spouse). If you receive inheritance, it is always considered a separate asset – even if you received it during your marriage. Your spouse should never get access to it. This also extends to any gifts that you received during your marriage.What are Marital Assets?
Marital assets include everything you and your spouse acquired during the marriage. This might be a family home, a pet, retirement assets, stocks, fine art, cars, and so on. You might also start a family business with your spouse during the marriage. Perhaps most crucially, it does not matter where the underlying funds came from to acquire these assets. Regardless of who had the greater income or who supplied the most funds to purchase a specific asset, the property is considered marital if it was acquired during the marriage.
In addition, any increases in the value of separate property may be considered marital property. As long as these increases in value occurred during the marriage, they could be marital property.What are Commingled Assets?
Commingled assets are an interesting third category in this discussion. If a spouse uses their separate property to acquire other property during the marriage, the result might be a theoretical “mixture” of assets that contain both separate and marital property.
For example, a spouse might receive an inheritance during a marriage (a separate asset). They may then use it to put a down payment on a family home (a marital asset). The home’s value may then consist of both marital and separate property. Why is this important? Because in the event of a divorce, these two different types of property may need to be “unraveled” in order to ensure a fair outcome for both spouses.Why is it Important to Understand Separate and Marital Property?
Equitable distribution makes it important to understand separation and marital property. This is the process in which spouses divide property in the event of a divorce. While marital property should be divided among spouses in an approximately equal manner, separate property cannot be divided. This means that there is an incentive among spouses to carefully identify and claim all separate property that they might have. In addition, it is within their best interests to lay claim to their share of marital property. To learn more about this process, contact a divorce lawyer in North Carolina.Find an Experienced Divorce Lawyer in North Carolina
If you have been searching for an experienced divorce lawyer in North Carolina, look no further than Arnold & Smith, PLLC. Over the years, we have helped numerous divorcing spouses throughout the Tar Heel State – and we can guide you toward the financial security you deserve. Understanding the distinction between separate and marital property is important, but it represents just one step in approaching your divorce with confidence. To learn more about how to approach property division, alimony, child custody, and child support, contact us today and book a consultation.