Blog Top Five Property Division Factors in North Carolina

Top Five Property Division Factors in North Carolina

The Tarheel State, like most other jurisdictions, is an equitable division state. NCGS 50-20 basically means two things. First, upon divorce, marital property, including debts and assets, must be divided equitably (fairly). So, “equitable” is usually, but not necessarily, the same as “equal.” This principle becomes clearer in light of the second one. A divorce cannot be an unfair financial burden on either spouse.

There’s a presumption that a 50-50 division is equitable and evenly distributes the financial burden. If sufficient evidence is available, either party may obtain a disproportionate division, based on the factors discussed below. In some cases, this division could be greatly disproportionate, even something like 80-20. Significantly, only marital property is subject to equitable division law. Nonmarital property is in a separate category. 

Because of North Carolina’s complex law, and also because of this classification issue, both spouses have important legal and financial rights during divorce property divisions. A Beaufort divorce attorney effectively stands up for those rights, not only in a courtroom but also around a negotiating table.

Current and Future Economic Circumstances

As mentioned, marital property is subject to the equitable division law and nonmarital property is exempt from it. While that’s generally true, there’s also a back door.

Judges may consider nonmarital property awards when they determine if a marital property division is equitable. For example, if the Wife has substantial student loans (nonmarital debt), she might need some additional property, especially income-producing property, to meet that obligation. That’s especially true if the Wife gave up career advancement opportunities to be a full-time caregiver. More on that is below.

As for future economic circumstances, younger, well-educated people who are generally healthy can usually earn more money than people who are in poor health, older, or less well-educated. If the differences between the spouses are significant, a disproportionate division might be in order. That’s especially true if the spouse with a lower future earning capacity is female. Statistically, divorced men have more assets and higher incomes than divorced women.

Length of the Marriage

The longer the marriage lasts, the more each spouse has invested in the relationship. So, the spouse is entitled to a higher return. Conversely, if the marriage only lasted a few years, each spouse had little invested in it.

The standard of living during the marriage is very important as well. As mentioned, a divorce cannot be an unfair financial burden on either spouse. Marriage dissolution almost inevitably lowers the standard of living for both spouses. If this reduction disproportionately affects one spouse or the other, an unequal property division could even out that discrepancy.

Generally, fault in the breakup of the marriage isn’t relevant to property division matters in most states, including North Carolina. However, there’s a back door in the Tarheel State. Dissipation (waste) of marital assets could be relevant. If the Wife spent thousands of dollars on gifts for a boyfriend, she might have to reimburse the marital estate for these expenses.

Agreements Between the Spouses

This factor might be the most important one. North Carolina law strongly encourages spousal agreements, especially if the couple has children. Judges usually uphold these agreements, even if they don’t result in a 50-50 division, as long as each spouse had an independent Beaufort divorce attorney throughout the process. These principles apply to both premarital agreements and divorce agreements. 

Noneconomic Contributions to the Marriage

The so-called homemaker factor is usually very significant or practically a non-issue. There’s normally no in-between.

The factor looms large if, as mentioned, one spouse surrendered money-making opportunities to become a full-time caregiver. The law doesn’t financially punish these individuals for these choices, especially if the decision was mutual.

About a third of marriages feature a “caregiver” spouse and a “breadwinner” spouse. However, in most marriages, the spouses divide caretaker and breadwinner responsibilities, at least to an extent. Granted, one spouse may work overtime, and/or one spouse might not wash many dishes. But these inequities aren’t significant enough to justify a disproportionate marital property division.

Custody of Minor Children

This factor sometimes relates back to the future income factor. Parents who have custody of minor children usually cannot spend as much time at work, or they must pay significant childcare costs. That’s especially true if a child has a serious disability and requires special care.

Child custody has immediate effects as well. Generally, staying in the marital residence is in the best interests of the children. Therefore, the residential custodian often gets the title to the house. Additionally, the residential custodian might need some additional financial assistance.

Contact an Experienced Carteret County Lawyer

Marital property divisions are quite complicated in North Carolina. For a confidential consultation with an experienced family law attorney, contact Schulz Stephenson Law. Convenient payment plans are available.

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