Without question, divorce is a life-changing decision. It is also a decision that requires couples to confront many complex issues, including the division of their property. Depending on how long a couple has been married, they may have accumulated many assets, not to mention personal property, homes, cars, and even debts that need to be divided. One question commonly asked during a divorce is– can we divorce without splitting assets?
This is an understandable question, and the answer can sometimes be complicated. Let’s examine the rules for property division in North Carolina, the types of property a couple might accumulate, and how assets may be protected during a divorce.
Types of Property in North Carolina
In North Carolina, property can generally be divided into three primary categories:
- Marital Property: Marital property consists of the assets and debts acquired by a couple during the marriage. It can include real estate, personal property, income, investment accounts, and more. This rule has some exceptions, such as when one party receives an inheritance in their name alone.
- Separate Property: Separate property was owned outright by one spouse or the other before the marriage. It can also be a property gifted to one spouse during the marriage, such as by inheritance. Separate property can become complicated, however. For instance, if one spouse owns a house before marriage, that Home would generally be considered separate property. However, if the other spouse spends significant time and effort maintaining or improving the house, it may be characterized as a marital property in some form. The same can be true of inheritance. One spouse may receive an inheritance but then deposit the inheritance in a joint account or commingle the funds in another way. Although the inheritance may have been separate, it can become marital property.
- Divisible Property: Divisible property is accumulated between the date of separation and the date of divorce. It may include property accumulated by either spouse during that time, or it may consist of passive income – for example, an increase in the value of real estate owned by the parties or an increase in the value of investment accounts based on the market. Typically, this property is valued at the time of the divorce itself, and it may be divided by a judge in any number of ways depending upon the judge’s assessment of the overall financial situation of the parties.
Generally, in North Carolina, separate property will remain separate during a divorce, while marital and divisible property will be divided somehow. Indeed, consulting with an attorney who knows and understands the law and can help you determine the characterization of a particular item of property will be necessary. An attorney can help explain the division rules for property in North Carolina. Let’s take a closer look at how property is typically divided during a divorce.
Methods of Property Distribution
In the United States, courts follow two essential views regarding property division: community property states and equitable division states.
In community property states, property is typically divided equally between the spouses. This means all the assets and debts acquired during a marriage are split evenly between the parties. However, some assets and debts, such as those acquired before marriage or through an inheritance, are considered separate property.
Other states, including North Carolina, are equitable distribution states. Although this may sound like a complex legal term, it essentially means that when a court divides the assets and debts accumulated during the marriage, it will typically try to do so in the most “fair” manner possible. In making this determination, a court will consider a variety of factors.
Equitable distribution does not always mean that assets and debts will be split equally. Instead, it means that the court will look at the entire picture of a divorce and attempt to decide what the court, at its discretion, believes is fair. The majority of states, including North Carolina, are equitable distribution states.
How Can You Protect Your Assets?
Although obtaining a divorce without splitting assets may be impossible, there are ways to protect and preserve your interest and minimize financial conflict and damages.
Two popular ways to do this include:
- Prenuptial Agreements: Many couples enter into prenuptial agreements before getting married. The parties may decide that each asset will remain theirs in those agreements. They may decide that in the event of a divorce, property will be divided in a particular manner. If the parties have entered into such an agreement and it is valid, that agreement will typically be controlling in the event of a divorce. As a result, those interested in protecting specific assets are wise to do so in such an agreement before ever getting married.
- Out-of-Court Settlement Agreements: Now, more than ever, parties choose to resolve the issues in their divorce almost entirely outside of a courtroom. Gone are the days when parties litigated every issue in front of a judge who ultimately decided their fate. Instead, more and more couples choose to take matters into their own hands. Alternative dispute resolution methods, like mediation, arbitration, and collaborative law, have become increasingly popular. By using these out-of-court methods of resolving their issues, couples have the freedom and flexibility to address all of the problems, including property division, in a manner that works best for their family and their future. This may mean that certain assets are assigned entirely to one spouse or the other. If that is the case, and both parties willingly enter into the agreement, the court will generally approve that agreement and will be controlling in the event of a divorce. Indeed, if one spouse is interested in receiving certain assets, he can negotiate for that during the out-of-court settlement process.
Regardless of how you choose to handle these issues, the most important thing is communicating openly and cooperating willingly to find resolutions that work best for your family and your future. These matters can become complicated, so consulting with an attorney who knows and understands the law is essential.
The Law Office of Dustin McCrary – Here for You
At The Law Office of Dustin McCrary, we know that deciding to divorce is likely one of the biggest and most important decisions you’ve ever made. We know it’s not a decision you take lightly – and neither do we. We understand that this process can feel overwhelming at times. We know that the law can seem confusing. That’s why we’re here to help. We’re passionate about helping every client we serve reach the right outcome for their situation. We will be with you on each step of this journey, providing the guidance and excellent representation you need. If you’re ready to get started, give us a call today.
We look forward to talking with you soon and learning how we can help.