Understanding North Carolina property division is one of the most important parts of the divorce process. During a divorce, couples must determine how marital property, debts, financial accounts, and other assets will be divided. North Carolina follows equitable distribution laws, meaning courts aim to divide property fairly based on the circumstances of the marriage. Whether you resolve these issues through negotiation or litigation, understanding your rights and options can help you make informed decisions about your future. Let’s take a closer look at each of those options.
Understanding Out-of-Court Agreements
Increasingly, couples across the country are using “alternative dispute resolution” to resolve issues in their divorces. There are a variety of methods that parties may use to do so, including:
- Mediation: Mediation is one of the most popular options for out-of-court settlement. Typically, it consists of both parties (and often their attorneys) meeting with a mediator at an agreed-upon location. The mediator will discuss each party’s goals for the negotiation and will lead the parties through a communication that ideally allows each spouse to speak freely and to be willing to compromise and work together towards solutions that work best for everyone. If the parties can do so, the mediator will assist them in documenting their agreement in a way that reflects the solutions they have reached.
- Collaborative law: Collaborative law is a newer method of out-of-court negotiation, but it is becoming increasingly popular. It consists of the parties meeting together with their attorneys who have been professionally trained in collaborative law processes. Although collaborative law has a variety of rules, one of the most important and essential is that both parties and their attorneys agree that if the parties cannot resolve their issues out of court, the attorneys will not represent the parties in court – and they will need to find new counsel. This incentivizes the attorneys and the parties to work together to find solutions that work well for everyone involved. As with mediation, collaborative law negotiations typically take place in a neutral location agreed upon by the parties.
- Arbitration: Arbitration is slightly more formal than either mediation or collaborative law, but less formal than courtroom litigation, and still takes place outside the courtroom. Arbitration has a set of rules that the parties agree to follow in advance and is typically overseen by an arbitrator. The parties will present their issues to the arbitrator, who will communicate with them and then issue a binding decision. It is less formal than courtroom litigation, but still far more formal than either of the other two options.
These are only a few of the potential options, and regardless of the method that a couple ultimately chooses to use, the goal is the same. If a couple can resolve their issues, the parties will document those solutions in an agreement that they both sign, which will then be submitted to the court for approval. At that point, the agreement will become binding on the parties until and unless they later agree to modify it.
While out-of-court agreements are ideal, they don’t always work for everyone. In some situations, for various reasons, a couple may not be able to communicate effectively or cooperate to reach an agreement. Whatever the circumstances, sometimes having a court resolve the issues is the best option.
Litigating Your Issues in Court
Different states have different laws regarding divorce, and as a result, may approach property division differently. In North Carolina, courts divide property according to a philosophy called “equitable distribution.” It may sound like a complicated and confusing legal term, but what it essentially means is simple. Courts will try to divide a couple’s assets and debts as fairly as possible during a divorce.
This may lead to the understandable question, “What is ‘fair’?” It’s important to understand that “fair” doesn’t necessarily mean an even 50-50 split right down the middle. Instead, courts will take a couple’s overall circumstances into account and consider them when making fair decisions.
What Factors Does a Court Consider for Equitable Distribution?
Some of the factors that a court may consider as they attempt to divide property equitably include:
- Length of the marriage: As a general rule, the longer a couple is married, the more property they will have accumulated, and the more factors there are to consider in its division.
- Contributions of each party to the marriage: Often, the court will consider the “contributions” of each party to the marriage when dividing property. One example of this might be a wife who worked to put her husband through medical school, and then became a stay-at-home mom. At the end of the marriage, the husband might make significantly more money than the wife, who may make none. As a result, in dividing the property, the court may give the wife a greater share because of her contributions to helping the husband reach his career goals and her efforts in caring for the children.
- Age and health of each party: A court will also consider the age and health of each party in dividing property. If one party is significantly older or in ill health and unable to earn an income, that party may receive a greater share of property than the younger, healthier spouse who can work.
- Custody of children: Although child support is also obviously intended to assist financially with raising children, if one spouse has full-time custody of the children, or significantly more custodial time than the other parent, a court may consider giving that parent a greater share of the property to compensate for the time and expense associated with raising children.
- Financial situation of each party: In dividing property fairly, a court will consider each party’s overall financial situation. In making this determination, the court will consider not only the actual salary of each party but also their employable skills, earning abilities, and any separate assets and debts they may have, if any.
- Whether either party intentionally wasted assets: Sometimes, one spouse may intentionally waste assets, either through voluntary underemployment, or a spending or gambling addiction, as only two of many examples. In these situations, a court may consider awarding more property to the spouse who did not engage in the financial waste to balance the scales and make the overall division more equitable.
- Whether either spouse owns separate property: Sometimes, one spouse may have separate property – either property they owned before the marriage and never commingled with other assets, or property they received as an inheritance and kept separate from marital property. If the separate assets of one party are significant, a court may take that into consideration during a property division.
- Any other factors the court decides are relevant.
When the parties litigate their issues in court, the process essentially consists of presenting the issues to the judge, along with each side’s arguments (and supporting evidence), and asking the judge to make a decision that is binding on both parties. The type of evidence presented will depend upon the particular circumstances of each case. It will typically include a mixture of documentation, witness statements, photographs, video evidence, and many other types of evidence, depending on what the attorneys feel is best for the particular situation.
In cases where property division is an issue, evidence considered may include:
- Bank statements
- Credit card, statements
- Statements from investment accounts
- Lists and photos of personal property owned by the parties
- Information pertaining to businesses owned by the parties
- Insurance policy information
- And a wide variety of other information, depending upon the circumstances.
The court will ultimately review all of the evidence presented and will issue a decision dividing the property in accordance with the philosophy of equitable distribution. It is important to understand that when a court issues a decision, it is binding upon both parties.
The Law Office of Dustin McCrary – Here For You
The decision to get divorced is one of the most significant decisions you will make in your life. It’s understandable to worry and wonder about the path ahead. The good news, though, is that you don’t have to walk this road alone. At the Law Office of Dustin McCrary, we are here to walk with you. We’ve traveled this path before with many clients, and we can promise you that even though taking the first step is intimidating, it can be a journey that leads to a better and brighter chapter ahead. If you’re ready to get started, we will meet you where you are at with you each step of the way. Contact us today.