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How Is Property Acquired After a Separation—but Before Division—Divided?

Marriage is the most complex relationship humans can enter. While it might be nice to think love is all that really matters, there are many factors at play when two lives intertwine. And when the time comes that a married couple decides to separate—and, eventually divorce—untangling all the various elements can be a challenge.

One area where that is especially true is for the marital estate, and determination of which property now goes to which spouse—including property acquired after separation but before the property is divided. Sometimes this period of time can cover many months or years.

In North Carolina, the determination of what constitutes marital property to be divided is based on the date of separation. However, a long period of time can pass between the date of separation and the date when the spouses agree to divide the property or a judge hears the case. The date when the property is actually distributed is called the date of distribution.

Between the date of separation and the date of distribution, property may change value, be sold, or be acquired. This property is called divisible property, and determining what happens with this property can be complicated.

Let’s review what happens to property acquired in that period between the date of separation and the date of distribution, starting with a quick overview of property division in North Carolina.

RELATED: 5 Common Questions About Property Division During a Divorce

How Does Property Division Work in North Carolina?

Close up of wedding rings and divorce contract with divorcing couple in background

As discussed in our Is Everything Split 50/50 in a Divorce in North Carolina? blog post, North Carolina is an equitable distribution state. While a community property state splits all marital assets and debts evenly, an equitable division state like ours divides marital property “equitably”, which may or may not be equal, as determined “in the eyes of the court.”

While it would seem as though equal (a 50/50 split) and equitable are the same thing, the key distinction is that equal is exactly even and equitable implies a sense of fairness in the division. Along with that, “in the eyes of the court” is an important caveat.

For example, consider a situation in which one spouse has a disability that requires costly treatment and prevents them from working. In an equitable distribution state, the judge could take this into consideration when dividing the marital property and may grant them extra resources due to greater need. But if the same divorce were to happen in a community property state, the value of all marital assets would be totaled, and each spouse would receive exactly as much as the other spouse.

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What Is Considered Marital Property?

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Things of value like the marital home, bank accounts, retirement accounts, and stock options that were acquired during the marriage can be considered marital property. Other valuable assets can fail into this category—as long as they were obtained prior to the date of separation—even though they are held in the name of one spouse only.

That means when “his” platinum necklace or “her” new boat are bought prior to separation, they are technically part of the marital estate (for distribution purposes). The appropriate valuation will be assessed, and the judge will factor it into their considerations when determining a final distribution.

RELATED: What Does Marital Property Mean in Property Division Cases?

What Is Considered Separate Property?

Daughters help father unload boxes out of a moving truck

The general rule here is that property acquired in the following ways would potentially be considered one spouse’s separate property, rather than marital property, and not divided in the divorce.

  • Property already owned by one spouse before the marriage began
  • Property acquired by one spouse after legal separation
  • Gifts or inheritance explicitly designated to one spouse only, even if it occurred during the marriage.

However, there are some important caveats.

One is that North Carolina law presumes that all property owned by either spouse on the date of separation is marital property. So, if you believe a certain asset should be considered separate property instead, you will need to prove it to the court.

Another is that there are many circumstances in which separate property can become marital property.

A court may also consider what funds were used to purchase the property. To go back to the necklace- and boat-owning couple:

  • If he bought the necklace with money that was marital property, the necklace would be marital property even if purchased after the date of separation. Cash accumulated during a marriage counts as marital assets, no matter when (or by whom) it is spent.
  • If she bought the boat with money she earned after the start of the separation, then she will likely be able to keep the boat without having it count against her share of the final distribution.

While that might seem fairly straightforward, we also need to address a few key definitions and requirements involved in the North Carolina divorce process.

Divorce and Legal Separation in North Carolina

The North Carolina divorce law has a specific definition of legal separation that must be met for an “absolute divorce” to be granted—and this plays a role in property distribution.

To meet the legal requirements for the official, one-year separation, the following factors must hold true:

1) Spouses must be living in separate homes.

2) At least one spouse intends the separation to be permanent.

These requirements for an “absolute divorce” to ultimately be granted in our state can also affect what kind of assets are considered which kind of property.

RELATED: What’s the Difference Between Separation and Divorce in North Carolina?

How Separation Status Can Affect Property Distribution

If a couple doesn’t meet the above circumstances, they will not be considered separated and any property they acquire will typically be considered marital property.

It should be noted that North Carolina does not require any paperwork or legal documentation of a separation. Once a spouse moves out of the marital residence (with the intention of doing so permanently), the couple is considered separated. However, it is important to keep your own records in case the date of separation is later challenged.

Of course, you and your spouse could also choose to draft and sign an official separation and property settlement agreement (commonly known as a separation agreement), which will formalize the date of separation and can even settle property distribution, child custody, child support, spousal support, and other disputes that would otherwise fall to a court to decide. But this is completely optional.

Property Acquisitions During Brief Reconciliation Periods Between Separations

The fact that couples can (and do) separate, decide to “give it another chance,” and then separate again provides ample opportunity to create complicated situations when one or both spouses acquire property. In this instance, anything that one or the other spouse decides to acquire during the initial, less-than-one-year separation should considered marital property, even though the couple wasn’t together (and even intending to divorce) at the time of purchase.

The spouse who bought the asset during the “trial” separation, though, might be inclined to think it should be designated as separate property. Since the couple was retroactively considered to be not legally separated at the time, however, this argument may not stand up in court.

What Is Divisible Property?

Attorney helps woman understand and complete paperwork

North Carolina recognizes a third category beyond marital and separate property: divisible property. Divisible property is the term given to property that is acquired or changes in value between the date of separation and the date the property is actually divided. This category of property can be distributed between the spouses, just like marital property.

Determining what constitutes divisible property can be complicated. Divisible property accounts for assets that change value between the separation and date of distribution. These changes could be appreciation or diminution in value. It also includes any property received after the date of separation that was earned during the marriage.

Examples of divisible property include bonuses and sales commission that were earned during the marriage but not received by a spouse until after the date of separation. Also, the passive appreciation of an asset, such as a house, is divisible property.

Determining what is passive versus active appreciation or diminution is often complicated. For example, if one spouse lives in the former marital house, does not make any improvements, and the house increases in value, the increase will be passive and is therefore divisible property. If the spouse makes improvements to the house, though, a determination needs to be made about what was passive versus active appreciation. Another example could be stocks. If the stocks were owned on the date of separation and increase in value due to the market, the increase is passive and therefore divisible property. If one spouse is actively trading the stocks, the increase could be active and not divisible.

Myers Law Firm Provides the Help You Need in Divorce Law

Myers Law Firm is experienced in helping clients navigate the challenging aspects of divorce law. Our attorneys always listen to you and use our experience in the North Carolina legal system to fight for your fair share of marital assets. If you’d like, you can learn about our divorce lawyers on this page.

If you are interested in scheduling a consultation with our firm, please either fill out the brief form below or call our Charlotte office toll-free at 1-888-376-ATTY (2889).

References

Howell, C. (2017, September 8). Equitable Distribution: The Marital Property Presumption. On the Civil Side: A UNC School of Government Blog. Retrieved from https://civil.sog.unc.edu/equitable-distribution-the-marital-property-presumption/

The content provided here is for informational purposes only and should not be construed as legal advice on any subject.

Contact Myers Law Firm

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We are able to meet with clients and hold consultations with prospective clients via telephone or video conference. If you need to contact us, please do not hesitate; we are happy to speak with you about your situation, your needs, and how we can help.

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Is Everything Split 50/50 in a Divorce in North Carolina?

Even when a divorce is relatively amicable, property division can still be contentious. There are complex rules governing what counts as marital property, what counts as separate property, and how it all gets divided. While the division of property is supposed to be “equitable,” you and your spouse may disagree on what is equitable or fair.

On top of that, the rules can be drastically different depending on where you live. Each state has its own rules about how marital assets should be divided. While some states strictly split assets 50/50 in all cases, others (including North Carolina) do not.

In this blog post, we’ll briefly discuss the two main systems of property division used in the United States—and discuss what is used in North Carolina.

Community Property States vs. Equitable Division States

a divorcing couple discussing the division of assets

Although each state has its own specific set of rules about dividing property, they generally fall into one of two broad categories:

Nine states, located primarily in the western and southwestern United States, observe community property laws. In a community property state, all marital assets and debts are split 50/50 in the divorce. This group of states includes California, Texas, Washington, Idaho, Nevada, Arizona, New Mexico, Louisiana, and Wisconsin.

The remaining states, including North Carolina, follow the law of equitable division, also known as equitable distribution. In an equitable distribution state, marital assets are to be divided “equitably” or fairly. What is equitable or fair is generally in the discretion of the judge.

One state, Alaska, generally follows equitable distribution but also allows couples to “opt in” to a community property arrangement before or during the marriage (but not once the divorce process has begun).

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Separate Property vs. Marital Property

a spouse going over paperwork to determine property division

Before we go further, it’s important to clarify what we mean by “everything” when we ask if everything is split 50/50 after a divorce. “Everything” in this case refers to marital property.

But what exactly is “marital property”? In general, marital property refers to any assets acquired during the course of your marriage—income, property, debts, investment accounts, pension and retirement benefits, etc. It does not matter whose name the asset is in, and they are not required to be in joint names. These are the assets that are to be divided during the divorce process—50/50 in community property states, or “fairly” in equitable distribution states.

By contrast, separate property refers to assets that one spouse owned before the marriage, or gifts or inheritances given specifically to one spouse and not the other during the marriage. These do not get divided.

RELATED: What Does Marital Property Mean in Property Division Cases?

However, in practice the line isn’t always quite so clear. For example, in North Carolina, all assets owned by a party on the date of separation are considered marital property by default (the “presumption” of marital property). If one spouse contends that certain assets should be considered separate property, that spouse must have evidence to overcome the presumption. Furthermore, assets that begin as separate property can become joint property if they are mixed with marital assets during the marriage.

This aspect of the law is extremely complicated, so it’s always wise to consult with an experienced property division attorney. If you’d like more information on how separate assets can become marital property, we cover this in much greater detail in a recent blog post.

RELATED: How Does Separate Property Become Marital Property?

Equal and Equitable Are Not (Necessarily) the Same Thing

a spouse determining whether everything is split 50/50 in a divorce

In the context of property division, “equal” and “equitable” have very different meanings. Equal simply means both sides get the same amount. Equitable means that the division is fair for both sides.

Of course, sometimes a 50/50 split really is the fairest approach, and that’s exactly what a judge will decide. In fact, North Carolina state law instructs that marital property and divisible property should be divided equally according to their net value, “unless the court determines that an equal division is not equitable.”

But as you can imagine, there are many relevant factors that could shift the balance from strict 50/50 when it comes time to divide property equitably. Here are a few examples of what a court might consider:

  • Duration of the marriage. Couples that have been married a long time, naturally, tend to accumulate a lot of joint property, and division typically becomes more complicated. By contrast, relatively short marriages typically have much less property acquired during the marriage.
  • Child custody. If one spouse will be the primary caregiver for the couple’s children, they might receive the family home and a proportionally greater share of the assets to provide for their care.
  • Future financial needs and earning potential. For example, say that one spouse is a high wage earner, while the other is unable to work due to chronic health issues or disability. A court may divide the property in favor of the spouse with fewer resources and greater needs.
  • Contribution to career advancement. Say one spouse paid to help the other get an advanced degree—or, alternatively, quit working and stayed home to allow their spouse more time to devote to their own professional opportunities. These scenarios might lead to a more unequal distribution being considered “fair.”
  • Tax considerations. If a certain division of property would pose unequal tax burdens on the parties, they may also be given a greater share of assets as compensation.

These are not the only examples. North Carolina law allows for a judge to consider several factors that the court shall take into consideration if one party requests an unequal division, but also allows for “any other factor which the court finds to be just and proper” to be considered as well. This gives the judge a wide degree of subjective authority when it comes distributing assets “equitably.”

How a Divorce Attorney Can Help

a divorce attorney can help with figuring out what is equitable in a divorce

If this all seems complicated, that’s because it is. Every marriage is unique, and determining what’s “fair” is much more difficult than simply figuring out what’s “equal.”

Because what is equitable can be subjective, and there are often few easy answers, it’s normal for divorcing couples to strongly disagree about how to divide their assets—even when both sides act in good faith and aren’t actively trying to take advantage of one another. When spouses can’t agree between themselves, the matter must be resolved in court.

A divorce attorney can be a huge benefit as you and your spouse go separate ways—even if your divorce is (or at least begins as) an amicable one. An experienced lawyer will know the law, know the local courts, know how to distinguish between marital and separate property (and obtain the evidence needed to document and prove that certain assets should be considered separate), and how to accurately calculate the value the property to be divided.

Further, divorce is almost always stressful and painful even when both parties agree it’s for the best. Having an attorney handle this delicate, complicated legal work often means a faster resolution and less drama between separating spouses. You can focus on building your future life and, ideally, maintain a better relationship with your ex-spouse (especially if children are involved) while your attorney handles the legal work.

And the unfortunate reality is arguments over how the property will be divided can, and often do, lead to bitterness even in divorces that start out amicably. If your ex-spouse starts acting in bad faith or trying to get more than their fair share, a divorce attorney can help you protect your legal rights and work toward the quick, fair resolution that’s ultimately in the best interests of everyone concerned.

Myers Law Firm: Honest, Ethical, and Effective Representation

If you’re looking for an honest, compassionate, and dedicated legal team to help you resolve your property division issues after a divorce in Charlotte or Mecklenburg County, contact Myers Law Firm today for a free consultation.

Our attorneys have extensive experience handling every aspect of the property distribution process, as well as all family law matters related to divorce, separation, child custody, and child and spousal support. We are here to help you understand your options and protect your rights during stressful circumstances like this. 

To request your free consultation with Myers Law Firm, simply call 1-888-376-ATTY (2889) or complete our online contact form.

References

N.C.G.S. § 50-20

The content provided here is for informational purposes only and should not be construed as legal advice on any subject.

Contact Myers Law Firm

We are committed to continuing to serve our clients’ legal needs

Single Divider

We are able to meet with clients and hold consultations with prospective clients via telephone or video conference. If you need to contact us, please do not hesitate; we are happy to speak with you about your situation, your needs, and how we can help.

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Who Gets the House in a Divorce in North Carolina?

Deciding to separate and proceed with a divorce isn’t easy, but it’s only the first step in a sometimes-long process. When the emotional weight of splitting up with your spouse is still heavy in the air, maybe the last thing you want to do is think about what will happen to your family home.

An experienced divorce attorney can help you understand what options you have in moving forward. You’ll have to think hard about keeping the house, selling it, or contesting your spouse’s plans. It’s usually not an easy decision, but it can be even more difficult when there’s an emotional attachment to where you live.

There’s more than one possible answer, and the best one for you could require a greater understanding about the process.

Who Decides Who Gets the House in a Divorce?

Couples have the option of reaching an agreement when it comes to dividing assets. While this is the simplest and least costly option, sometimes the case has to proceed to court for a judge to make the final decision. At the conclusion of a trial, the judge will have to decide what they think is an equitable division of the property.

The judge will have to look carefully at all assets the couple owns before making any decisions on dividing property.

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What Does Property Division Look Like in Divorce?

Who Gets the House in a Divorce in North Carolina

The court has a lot of discretion when it comes to dividing assets. The process starts with the court categorizing assets into three categories:

  • Marital property
  • Separate property
  • Divisible property

Marital Property

Marital property is all the real and personal property acquired from the date of the marriage up to the date of the separation. Houses and mortgages often fall into the marital property classification if the couple purchased the home after getting married, even if the property is only listed in one person’s name.

Divisible Property

Divisible property is the change in value of marital property from the date of separation until the date of distribution of the property. House valuations, ongoing upkeep, and tenant payments could all affect this amount.

Separate Property

Separate property is real or personal property that a spouse owned before the marriage or that came to them as an inheritance or gift in their name alone during the marriage. If one party’s parents gave the couple the house as a gift, it likely doesn’t count as separate property.

Sometimes, a house can be converted from separate property to marital property during a marriage. If a couple modifies a deed to include both names, it could convert the property to marital property. If the non-named spouse helped with finances or upkeep of the house during the marriage, the spouse acquires a marital interest in the property.

Marital and divisible property can both be divided by the court, while separate property is just that – separate. If the house is considered separate property, it will remain with the appropriate owner. If the house counts as marital or divisible property, the court will handle the division with equitable distribution.

RELATED: 5 Common Questions About Property Division During a Divorce

North Carolina and Equitable Distribution

The division of property after separation in North Carolina follows equitable distribution. This term means that the law presumes that an equal division is equitable. However, there are grounds for a judge to make an unequal division and the division still be equitable. A judge will decide whether to allow for an unequal division by looking at several factors, including:

  • Incomes, debts, and separate property
  • Contributions to the household beyond finances
  • Help during the other spouse’s education and professional development

When it comes time to consider how the house will be divided, a judge could also take custody matters into consideration. The parent that receives primary physical custody could get to stay in the marital home to keep the children secure. This decision still leaves the question of covering the mortgage, paying property taxes, and compensating the other spouse for such a large asset.

Fault Affecting the House

Fault can affect alimony and spousal support if a spouse cheated or had an affair, but North Carolina doesn’t consider fault when considering equitable distribution. This means that the offending spouse can still get their fair share of the property, including the house.

Do You Have to Sell the House?

Who Gets the House in a Divorce in North Carolina

Selling the house and splitting the proceeds might be the simplest option, but it’s not the only one. There are ways to keep the house in the family, but it’s important to remember that some choices can come with complications, ranging from emotional effects to tax implications.

  • Balancing assets: One spouse can choose to keep the house while trading an equal value of other assets in exchange. When paying outright isn’t possible, a spouse can offer other assets with a high enough value to balance the scales.
  • Payments over time: If one spouse keeps the house but does not have enough other assets to make the division of property equal, that spouse can pay the other over time. These payments are called a distributive award.

Figuring out how these plans play out might only be the beginning of a complex solution. Property disagreements, a spouse passing, and bankruptcy could all have major impacts on what happens to a house.

How Can a Homeowner Find the Right Divorce Lawyer?

Who Gets the House in a Divorce in North Carolina

Experienced help can be vital for a spouse considering divorce, especially when an asset as big as a house is included in the discussion. Often the largest asset a person will own, the outcome of division can have a lasting impact on a person’s life.

But before you hire a divorce lawyer to help you with your case, it’s important to think about a few details:

  • Do my final expectations align with my attorney’s?
  • Do I agree with my attorney’s approach?
  • Does my attorney have experience in this area?

Answering these questions starts with research, but it’s important to get to know the law firm you’re working with before you sign a contract.

Why Might Myers Law Firm Be the Right Choice for Homeowners in Divorce?

Planning for the future of a house can be an enormous task to do alone, especially with the included challenge of the divorce process. Myers Law Firm has over 60 years of combined experience helping clients approach divorce and property division, and is ready to work with you to get your fair and equitable share.

Reach out by calling 1-888-376–2889 or complete our brief online contact form to schedule a free consultation. We’ll discuss your case and your options, so you can create a plan for handling your house through a divorce.

References

N.C. Gen. Stat. § 50-6

N.C. Gen. Stat. § 50-20

N.C. Gen. Stat. § 50-21

R., Branan. Land Title: Understanding Rights in Real and Personal Property. NC State Extension. Retrieved from URL https://farmlaw.ces.ncsu.edu/land-use-and-zoning/land-ownership-and-liability/land-title-understanding-rights-in-real-and-personal-property/

Separation and Divorce. North Carolina Judicial Branch. Retrieved from https://www.nccourts.gov/help-topics/divorce/separation-and-divorce

The content provided here is for informational purposes only and should not be construed as legal advice on any subject.

Contact Myers Law Firm

We are committed to continuing to serve our clients’ legal needs

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We are able to meet with clients and hold consultations with prospective clients via telephone or video conference. If you need to contact us, please do not hesitate; we are happy to speak with you about your situation, your needs, and how we can help.

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What’s the Difference Between Separation and Divorce in North Carolina?

The misconception that separation and divorce are the same is all too common. In fact, separation and divorce are two different things, and they serve different purposes.

In this post, we’ll go over the differences between divorce and separation in North Carolina, and we’ll provide insight about how the two events affect you, your relationship, and your family.

Separation Is Part of the North Carolina Divorce Process

Every marriage is different, and so there’s no one right way to address differences, take time away, or end a marriage. While divorce is the way to end the legal bond between two people, separation is the first step that can lead to many possible results, including divorce, indefinite separation, or reconciliation.

Defining Separation

Some states have legal separation, which is a legal filing in which a married couple formalizes a separation without dissolving their marriage. In North Carolina, there’s no official document or any other formal process for a married couple to become “legally separated”. You and your ex are only separated if you’re living apart and at least one of you intends to leave the marriage permanently. If one of you moves out of the marital home with the intent of leaving the marriage, you can mark the date of separation on your calendar, and that’s enough.

North Carolina couples must remain separated continuously for one year before they can file for divorce. If you get back together and resume the marital relationship but then realize it was a mistake, you have to start the one-year clock over again. However, isolated “hook-ups” do not automatically restart the clock, even if you and your ex engaged in sexual intercourse.

Initiating a separation is simple, but it also opens the door for couples to begin dealing with the issues of custody, child support, spousal support, and property division. This is where the real conflict comes into play.

Defining Divorce

Separation in North Carolina requires couples to live separate and apart for one year. However, separation does not affect your marital status. Unless your marriage was not legally valid and you can get an annulment (which is rare in North Carolina), divorce is the only way to permanently dissolve your marriage and go back to being a single person for legal purposes.

Technically, filing for divorce is a simple process. All you need to do is file a lawsuit with the court and go through the process, which takes about 50–60 days after the other party is served with the lawsuit. In the end, you get a judgment of divorce, and your marriage is over.

Issues Related to Separation

Although obtaining the judgment of divorce is simple, all the issues that will come up as a result of the separation can get very complicated. These are the major legal issues that go along with dissolving a marriage: property division (equitable distribution), child custody, child support, and spousal support (alimony). The legal process of resolving these divorce-related claims is where all the conflict actually happens. In contentious cases, these issues may not be finalized until after the divorce is final.

Remember this, because it’s important: You do not have to be separated for one year in order to resolve claims for child custody, child support, spousal support, or property division. You can resolve them at any time during the one-year separation period, and you can even use a separation agreement to resolve them before you actually separate (so long as you separate within 30 days of creating the agreement). We’ll talk more about separation agreements in the following section.

To learn more about the process of filing for and finalizing an absolute divorce in North Carolina, read our blog article about this subject.

RELATED: How to Obtain an Absolute Divorce in Mecklenburg County

What is a Separation Agreement in North Carolina?

A separation agreement is a legal contract between you and your spouse that resolves the legal issues we discussed earlier (child custody, child support, property division, spousal support). There’s no law in North Carolina that requires you to get a separation agreement, and a court will not issue one for you. Only you and your spouse can create the agreement, and both of you need to be on board.

If you and your spouse can agree on the terms, your separation agreement can resolve any or all of the major legal issues surrounding your divorce. Your agreement won’t be valid unless both parties sign the document in front of a notary, who will notarize the signatures.

You can also put your agreement into a document called a consent order. This is an agreement that is signed by you and your ex and then by a judge. There are different reasons for doing a separation agreement versus a consent order, and we’ll talk about these differences in a future blog article.

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Do I Need a Divorce Attorney If I’m Separated?

If you’re separated or planning to leave the marriage, it’s never too early to start getting legal advice from an experienced family law attorney. Divorce can be a complicated, confusing, and stressful process, especially if you try to go through it without a lawyer.

Not only can a divorce lawyer take all the paperwork and legal preparation off your plate and make sure your rights are protected, but they will also attend to important details you may miss. As an example, some couples forget about various insurance accounts or retirement funds, which often name beneficiaries. If these accounts don’t get included in property division, it can be a mess to figure out what to do with them after a divorce finalizes.

Certain situations also demand the help of an attorney for the health and safety of the family. If you have a partner who is abusive or unstable, a lawyer can get the authorities involved and get court orders that protect you and your children.

No matter what your situation looks like, hiring a lawyer will most likely save you money in the long run unless you have a very simple, uncontested divorce. Make sure to choose an attorney who has experience handling divorce cases, and feel free to meet with multiple lawyers and search for someone who gives you confidence and makes you feel at ease. Your divorce may be a long process, and having the right advocate by your side can make all the difference.

Contact Myers Law Firm If You Need Help with a Divorce or Family Law Matter in Charlotte, North Carolina

At Myers Law Firm, we understand that the end of a marriage is never an easy time for either spouse, so we approach every case with compassion and understanding to search for solutions. While we excel at respectful negotiation and will work to find common ground with the other side, we are ready to stand up in court and fight for your rights with an aggressive approach if that’s what it takes.

The attorneys at Myers Law Firm have experience handling all of the major family law issues that surround the end of a marriage, including alimony, child custody, child support, and property division. We’re here if you need help. To get in touch with us, call our offices at 888-376-2889 or fill out our online contact form today.

The content provided here is for informational purposes only and should not be construed as legal advice on any subject.

Contact Myers Law Firm

We are committed to continuing to serve our clients’ legal needs

Single Divider

We are able to meet with clients and hold consultations with prospective clients via telephone or video conference. If you need to contact us, please do not hesitate; we are happy to speak with you about your situation, your needs, and how we can help.

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Five Frequently Asked Questions About North Carolina Property Division

For many couples, dividing their assets and debts is one of the most difficult, confusing, and stressful parts of a divorce. Before you panic about losing your home, car, and family heirlooms, keep reading. In this article, we’ll answer five frequently asked questions about North Carolina property division that will help you understand the process and what’s involved.

1. What Does Equitable Distribution Mean in a Divorce Case?

Equitable distribution is the process of dividing marital and divisible property in court. In a perfect world, you and your spouse would negotiate the division of your marital property without a judge’s involvement. Of course, most spouses don’t divorce if they’re finding it easy to cooperate. If you can’t come to an agreement (which is not out of the ordinary), the court will schedule a hearing and divide your marital property using a theory of equitable distribution. Marital property includes both assets and debts.

Based on this theory, a judge will split your property 50-50 unless such a split would be inequitable or unfair. When a judge assesses the fairness of a split, they consider a series of factors, some of which are:

  • Each spouse’s income, debts, and property
  • How long the marriage lasted and each spouse’s age
  • Ways in which a spouse directly or indirectly contributed to the other’s educational and professional opportunities
  • A custodial parent’s need to occupy or own the marital home or other household items
  • Both spouses’ physical and mental health
  • Tax consequences related to the property division
  • Any other factors that are “just and proper”

Note that the court will not consider child support and alimony payments when dividing marital property.




2. What Is Marital Property and How Much Is It Worth?

For the purposes of property division, courts classify property into three categories:

Marital Property
This category includes any income, assets, property, and debts that you accumulated during the marriage. Marital property can include wages, pension and retirement funds, investment accounts, real estate, personal property, mortgages, car loans, and credit card bills.

Separate Property
Your spouse typically does not get a share of your separate property, which includes your pre-marriage assets and debts as well as gifts or inheritances that someone specifically gave to one spouse and not the other.

It’s important to note that separate property can transform into marital property if you commingle it, meaning mix it with marital assets. For example, if you use an inheritance to buy a jointly-titled asset, it might become marital property. If your spouse is trying to claim a share of your separate property, you should contact a lawyer immediately.

RELATED ARTICLE: How to Protect Gifts and Inheritances in a Divorce

Divisible Property
There’s always some time that passes between when spouses separate and when the court gets around to handling property distribution, and this category exists to deal with assets that the spouses receive during that period as well as assets that change in value during that period. Note that an asset that was earned before the date of separation will still count as divisible property if it’s received after separation.

Once you identify your marital and divisible property, you need to determine its value. Early on in your divorce, both spouses will need to complete an affidavit of equitable distribution that outlines their assets and the fair-market value of those assets as well as any debts. While some values are easy to set, valuing complicated assets like small businesses may require help from an expert.

To decide the value of items in an equitable distribution case, the judge will refer to the fair market value. The law defines fair market value as the price that a willing buyer would pay a willing seller for the item in question when neither is under a compulsion to buy or sell the property. The fair market value doesn’t mean what was paid for a specific item when it was initially bought five years ago (purchase price), nor does it mean the price someone would pay if they went out and bought the item new (replacement value).

3. Can a Prenuptial Agreement Protect My Assets?

Nuptial agreements can occur either before (prenuptial) or during a marriage (postnuptial). In a nuptial agreement, you and your spouse define which property is marital and which is separate. This can streamline your property division process if you divorce.

However, not every nuptial agreement is valid. You can dispute the validity of a nuptial agreement if you didn’t enter it voluntarily, if it was based on fraud or misrepresentations, or if it wasn’t properly signed.

RELATED ARTICLE: How Do Prenuptial and Postnuptial Agreements Affect Divorce?

Even if you don’t have a nuptial agreement, you can still negotiate a separation agreement, which is an out-of-court property settlement that divides marital and divisible property and identifies separate property. A separation agreement can also resolve child custody and support issues. However, keep in mind that once you enter a separation agreement, it will become legally binding and won’t be easy to change. You should always get advice from a lawyer before you enter a separation agreement.

4. Who Gets to Stay in Our House?

If you have minor or dependent children, the parent who has primary physical custody may get to stay in the marital home. However, that spouse will need to consider whether they can afford to pay the remaining mortgage and other costs before trying to stay in the house. Sometimes, the best option for both parties is to sell the marital home and divide the proceeds.

5. My Spouse’s Behavior Caused Our Divorce — Does That Impact Their Property Share?

Typically, North Carolina courts don’t consider fault when they divide your marital property. You won’t get a bigger share of property or get to keep the house because your spouse cheated on you, as an example.

However, your spouse’s misconduct might affect alimony and spousal support. For instance, North Carolina courts typically won’t grant alimony to a spouse who engaged in illicit sexual behavior (meaning they cheated or had an affair) during the marriage.

RELATED ARTICLE: How Does Alimony Work in North Carolina?

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Myers Law Firm: Experienced Divorce Lawyers for Clients in Charlotte and Mecklenburg County

If you’re considering a separation or your spouse recently filed for divorce, you need to understand your legal options. At Myers Law Firm, our respected divorce lawyers can help guide you through difficult family law issues with compassion and make sure your rights are protected. To schedule your initial consultation, fill out our quick and easy online contact form or call us at 888-376-2889. We’re here if you need help.

The content provided here is for informational purposes only and should not be construed as legal advice on any subject.

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North Carolina General Assembly

This is Part 1 of a recent article that I wrote regarding recent laws passed by the North Carolina General Assembly which affect family law and divorce issues.  Part 2 will be coming soon.

The recent legislative session of the North Carolina General Assembly was notable for many reasons and brought a lot of attention to the State of North Carolina.  While one high profile bill that was passed in the area of family law garnered a good bit of national attention, there were several others that could significantly impact family law practitioners.  The following is a summary of new laws that were enacted during the long session of the 2013 General Assembly that may impact you in your representation of domestic clients.

Uniform Deployed Parents Custody and Visitation Act

One comprehensive piece of legislation was the adoption of the Uniform Deployed Parents Custody and Visitation Act .  This law amends N.C.G.S. §§ 50-13.2 and 50-13.7A, and creates a new Article 3 in Chapter 50A.  This law became effective October 1, 2013.

The first section of the new law amends N.C.G.S. § 50-13.2 by adding a new subsection (f).  This new subsection prohibits a court that is making a custody determination from considering past military deployment or possible future deployment as the only basis in determining what is in the child’s best interest (emphasis added).  The new subsection does allow the court to consider past or possible future deployment that has any significant impact on the best interest of the child.  In practical terms, the result is that the court cannot use past or future deployments as the only basis for a custody decision, but may use it as one of several factors.  Furthermore, if the past or future deployments have a significant impact on the child’s best interest the factor may be weighed more heavily.

The second section of the new law repeals § 50-13.7A.  These were the previous provisions regarding custody and visitation for military members.  These provisions are replaced by the much more comprehensive provisions in section three of the law.

Section 3 of the law creates a new Article 3 in Chapter 50A, titled the Uniform Deployed Parents Custody and Visitation Act.  The Uniform Act is broken down into four parts.  Part 1 of the Act are the “General Provisions” and begins with an outline of 18 various definitions used throughout the Uniform Act.  While most of the definitions are standard and should be reviewed by the family law practitioner, there are a few worth mentioning.  “Caretaking authority” is defined as “the right to live with and care for a child on a day-to-day basis, including physical custody, parenting time, right to access, and visitation.”   “Custodial responsibility” is defined as “a comprehensive term that includes any and all powers and duties relating to caretaking authority and decision-making authority for a child.  The term includes custody, physical custody, legal custody, parenting time, right to access, visitation, and the authority to designate limited contact with a child.”   Another definition to note is that “record” is specifically defined as “information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.”

Part 1 of the Act includes a provision for attorney fees “and other appropriate relief” to be assessed if a party acts in bad faith or intentionally fails to comply with the requirements of the Act.   Part 1 also requires that an issuing court have jurisdiction pursuant to the UCCJEA, but provides that deployment does not change the residence of deploying parent.

Furthermore, Part 1 requires a deploying parent to provide notice to the other parent of a pending deployment not later than seven days after the deploying parent receives notice of deployment unless the parent is prevented from providing notice due to “circumstances of service”, and then notice must be provided as soon as reasonably possible.   The notice required under this provision must be provided in a “record”.  The deploying parent also must provide other parent with a plan for fulfilling that parent’s share of custodial responsibility.  If a person to whom custodial responsibility has been assigned during a parent’s deployment moves, then notice must be provided to the deployed parent and any other person with custodial responsibility, and notice must be provided to the court if there is a court proceeding.

Part 2 of the Act allows parents to enter into a temporary agreement granting custodial responsibility during one parent’s deployment.  The agreement must be in writing and signed by both parents and any nonparent who is given custodial responsibility.   The statute outlines a non-exclusive list of items that may be included in an agreement.   If there is an existing court order for custody or child support, the agreement must be filed with the court.

Part 3 of the Act outlines the judicial procedures after a parent receives notice of deployment.  Either parent can seek a judicial order after notice of deployment and the court may only enter a temporary order, unless the deploying parent agrees to a permanent order.   The hearing is to be expedited  and testimony by electronic means is allowed, unless the court finds good cause to require personal appearance.   A prior judicial order which contains provisions for deployment must be enforced unless the circumstances require modification and the court must enforce prior written agreement between parents unless agreement found to be contrary to best interests of child.

The statute allows for the court to grant caretaking authority to a nonparent who is an adult family member of the child or an adult with whom the child has a close and substantial relationship.   This grant of authority is limited by the language “in accordance with the laws of this State….”  In this author’s opinion, this limitation makes most of the provisions in Section 3 either invalid or extremely limited.  The current North Carolina law in the area of third party custody is limited to situations where parents are alleged and proven to be unfit, neglectful or have acted inconsistent with their parental rights.

If the other parent will not agree to this third party, the court is limited to allowing the third party only the time allowed the deploying parent by a current order or “the amount of time the deploying parent habitually care for the child.”   The statute also allows the court to grant decision-making authority to this third party to an adult family member or person with whom the child has a close and substantial relationship and the court must be specific about the powers being granted.  Any nonparent is made a party to the action until the grant of authority is terminated.

The statute allows an order to outline contact for the child with the nonparent  and outlines certain factors each order must contain, in addition to being only a temporary order.

Part 4 of the new statute contains the termination provisions.  An agreement under the new law terminates upon further agreement by the parents or 60 days after the deploying parent provides notice that he or she has returned from deployment.   If an order was entered by a court, the order terminates by agreement of the parties  or 60 days after the deployed parent provides notice of return.

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No Social Security Number of Absolute Divorce

One piece of legislation that was passed was overdue.  With Session Law 2013-93, the General Assembly removed the provisions N.C.G.S. § 50-8 which required that the plaintiff in a divorce proceeding provide his/her social security number and the social security number of the defendant, if known, in a complaint for absolute divorce and a judgment of divorce.

This law was effective when it became law on June 12, 2013.

Entireties Property Presumed to be Marital Property

With Session Law 2013-103 , N.C.G.S. § 50-20 was amended to include the presumption that real property acquired after marriage and before separation as a tenancy by the entireties is marital property, no matter what source of funds was used to acquire the property.  The “marital gift presumption” has been a part of North Carolina equitable distribution law since at least 1985.

McLeod v. McLeod, 74 N.C.App. 144, 327 S.E.2d 910, review denied, 314 N.C. 331, 333 S.E.2d 488 (1985).  This same bill also amended the definition of divisible property to clarify that passive increase and decreases in marital debt and financing charges and interest related to marital debt are divisible  (emphasis added).  This change makes it clear that active increases and decreases are not divisible (emphasis added).

The content provided here is for informational purposes only and should not be construed as legal advice on any subject.

Contact Myers Law Firm

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Barker v Barker

Barker v Barker – Civil Contempt

Defendant/Father appealed from an order finding him in contempt for failure to comply with a consent order directing him to pay a portion of his child’s college tuition and expenses. The order was affirmed by the North Carolina Court of Appeals. The parties signed a consent order on August 20, 2003, which resolved all of the issues between them regarding child custody, child support, equitable distribution and spousal support. The issue pertinent to the appeal was the parties’ agreement regarding payment of tuition costs and expenses for college. Father agreed to pay 90% and Mother agreed to pay 10% of the tuition, room and board costs of the children’s college education, as long as the “diligently applied themselves to the pursuit of education.”

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