Divorce brings its fair share of difficulties. That’s no secret. Certainly, it’s an emotionally difficult process – coming to the end of a journey and a relationship that you might once have thought would last a lifetime is painful. There’s no question about it. Beyond the emotional difficulties, however, there are also practical difficulties involved in the divorce process. Many of those practical difficulties involve working through the details of moving from one household to two – which means, among other things, dividing all of the property that a couple has accumulated during their marriage. Sometimes, dividing property can be as simple as deciding which spouse will take which car, or choosing who gets which piece of furniture. In other cases, however, particularly where intangible assets are concerned, property division can become more complicated. This can especially be true when it comes to dividing retirement assets. 

Many people have retirement plans – pensions, or 401K plans, or other such accounts. There are often clear and designated legal procedures for dividing those types of accounts. Sometimes, however, you have other assets – assets that you have worked to grow and set aside for retirement – although they aren’t specifically designated as such from a legal perspective. These types of assets could be investment accounts, bank accounts, real estate that you’ve invested in with the hope of making a profit, or perhaps using as a retirement home – and the list goes on. What happens to these types of assets? Typically, the division of such property will follow the standard laws for property division in whatever state that you live in. Often, there are two options for resolving those issues – choosing to go to court or to try an alternative option. 

Considering Taking the Issue to Court?

If you choose to have your property divided by a court, it’s important to understand that North Carolina is what’s known as an “equitable distribution” state. This means that rather than necessarily simply valuing the assets and making an even 50-50 split down the middle, a court will take a variety of factors into account, as it seeks to make a division of property that is “fair” or “equitable” to both parties. A variety of factors will be considered, including not only the value of the property itself, but also the education and earning ability of the parties, the financial needs of each party, the causes of the divorce, and numerous other factors, in the court’s discretion. 

As the court reviews your assets and debts and attempts to divide them, it will do so by dividing the property into three different categories: 

  • Separate: North Carolina courts include separate property as property that was owned by either spouse before the marriage. It also usually includes property that was acquired during the marriage either through an inheritance or a gift from a third party. Sometimes, it also includes property acquired after the couple has separated and purchased with post-separation earnings.
  • Marital: Marital property typically includes property – assets and debts included – that was acquired by the couple during the marriage. It includes tangible property – like household items, the marital home, cars, boats, and pets – as well as intangible property like investments, pensions, and the like. 
  • Divisible: Divisible property typically includes any increases and decreases in the value of the marital property after the date of separation, as well as property that was received after the date of separation as the result of marital efforts by either spouse before the time that the separation occurred. It also usually includes any passive income that is generated by marital property but which is received after the separation. It also typically includes any post-separation increases in marital debt.

After the court determines what type of property a particular asset is, it will value that property and attempt to divide it as “equitably” or “fairly” as possible based upon the category that it falls into. This is true of all types of property, including your retirement assets that are not designated to be divided in any other way specific to a certain retirement plan. After reviewing the assets and debts that a couple has accumulated during the marriage, the court will issue a binding legal order directing the parties as to how the property is to be divided.

Taking an Alternative Route

While the foregoing is the law and typical procedure if a court divides your property, it’s important to realize that in North Carolina, and the majority of other jurisdictions, this is not your only option. In fact, now more than ever, those who are going through the divorce process are turning to other methods of resolving their issues – and in many cases, avoiding the courtroom almost entirely. There are a variety of alternative dispute resolution options available. Two of the most popular include: 

  • Mediation: Mediation is a very popular method for resolving disputed issues outside of court, and it involves the parties and their attorneys working with a neutral third party, called a mediator, to work through their issues. The parties agree to confidentiality, and a spirit of cooperation, and the mediator helps to guide them through their issues and toward solutions that work for everyone. 
  • Collaborative Law: Collaborative law is a newer, but increasingly popular method of resolving divorce disputes outside of a courtroom.  This process involves each spouse and his or her attorney sitting down and working toward resolution of the issues in the divorce outside of the courtroom. As part of the process, all parties agree that if the issues can’t be resolved through the process, both attorneys will be disqualified from further involvement in the case. The parties also often sign a contract setting forth various rules they will abide by as they attempt to negotiate their issues. The goal is cooperation and collaboration, and it’s often a very effective method of resolving issues to everyone’s satisfaction. 

When you decide to work together outside of the courtroom to address the issues in your divorce, you truly have far more freedom and flexibility to decide your issues in a way that works best for your family and your life, rather than leaving matters in the hands of a judge. After all, no judge, regardless of how well-intentioned he or she might be, will ever know your family or your life circumstances as well as you do. 

Resolving your issues out of court means that you really have few limits on determining the arrangements that work best for your family. For any number of reasons, maybe an even 50-50 split from a financial perspective isn’t exactly the best fit for your family. After all, certain assets have emotional value far beyond a price tag. Maybe one spouse is particularly attached to the family home. Perhaps one spouse has always been looking forward to moving into the retirement property you have been investing in for years. Maybe those things are so valuable to one spouse that he or she would be willing to exchange more assets than a judge might award in exchange for what they truly value. 

These are the types of things that only you and your spouse will truly understand – so working together to come to a resolution that works for everyone is often the better option if it is manageable. Moreover, choosing to address your issues outside of court often saves time and money, and is far less stressful for everyone involved.  For all of these reasons, if at all possible, it’s often the best decision to work cooperatively with your spouse toward resolving your issues together in an agreement. Deciding to do so also means that as your life circumstances change, you can go back together and modify the agreement if necessary, without having to seek the intervention of a court. 

Regardless of where you find yourselves, in court or out, one thing is certain – you’ll need an attorney who knows and understands the law to help you navigate the process.

The Law Office of Dustin McCrary – Here for You

If you find yourself contemplating divorce and wondering how that decision might impact your retirement assets, we’re here for you – not only to address that issue but also every other issue that you encounter on this journey. We’ll walk with you every step of the way. Divorce is difficult, yes – but it can also be the beginning of a new journey and a better chapter ahead. We’re here to help you turn that page, and we would be honored to have the opportunity to do so. Get in touch with us any time. We look forward to speaking with you soon and learning how we can help. 


Divorce Lawyer

102 W Broad St
Statesville, NC  28677

(704) 380-0456

Divorce Lawyer

106 Langtree Village Dr
Suite 301
Mooresville, NC. 28117
(704) 593-6688

Hickory, NC
Divorce Lawyer

520 8th St NE
Suite #108
Hickory, NC 28601
(828) 459-6464

Lenoir, NC
Divorce Lawyer

118 Main St NW
Lenoir, NC, 28645
(828) 221-2999

© 2019 The Law Office of Dustin S. McCrary, PLLC | Legal Disclaimer & Privacy Policy | The material in this website may be considered advertising under applicable rules.