When spouses separate, there is often a good deal of property and debt to distribute between the parties. If the spouses can’t agree on the distribution of this property, one spouse will seek for a court to distribute the property through a motion for Equitable Distribution.
Property must be classified one of three ways: marital property, divisible property, or separate property. Marital property is any property that was acquired by either spouse during the marriage (with the exception of inheritance and gifts specifically directed to one spouse). Divisible property is the increase in value of property that was owned by one spouse prior to the marriage but increased in value through the actions of one or both spouses during the marriage, or the passive increase in the value of marital property after the date of separation. Separate property is all property owned prior to the marriage, inheritances, or gifts specifically directed to one spouse or the other.
It is important to note that property in the Equitable Distribution context refers to all assets and debts. This includes real property, personal property, retirement accounts, investments, credit card debts, loans, etc. Both parties will be required to complete an Equitable Distribution Affidavit, and list all assets and debts they currently have. This is used at trial to help the judge determine an equitable split of the property, and whose possession each piece of property is in.
In North Carolina, an equal distribution is presumed to be equitable. However, there are factors the court must consider when making a distribution, and in some cases these factors may justify an unequal distribution. Equitable Distribution cases can be complicated, and the valuation of certain assets can be very difficult. It is important to speak with an attorney who can help you to make sure that you understand the Equitable Distribution process.