What does equitable distribution mean in a divorce? You and your spouse have likely accumulated property and other assets during your marriage. Now that the marriage is coming to an end, you’ll have to divide the property as part of the divorce settlement.
North Carolina uses the law of equitable distribution when dividing property. What this means is, instead of simply splitting property down the middle, it considers factors such as income, debt, length of the marriage, and financial actions that have impacted the value of the assets.
Our equitable distribution attorneys can help you divide your property. Once you retain an attorney, you can negotiate with the other party (via mediation or attorney assisted mediation) to choose how to distribute the property, or you can choose litigate the matter in court.
Here are some factors considered with equitable distribution
- Income and Debt
- Child support payments from previous relationships or marriages
- Duration of the marriage
- Health and age of both spouses and ability to work
- Actions taken to waste or preserve asset
3 Types Of Property considered in divorce proceedings
When dividing assets during divorce proceedings, the court considers three types of property. First, there is separate property. This refers to the property you owned when you entered the marriage, as well as inheritances and gifts from third parties you received during the marriage. Also, separate property includes anything you acquired with your personal funds after separating.
Marital property refers to the property you acquired while married, as long as it isn’t a gift or inheritance. Gifts from one spouse to another count as marital property, though. The only exception is if the gift giver states that it’s separate property.
Divisible property refers to the increases and decreases in the marital property after the separation. In addition, any passive income earned from the marital property after you separate is counted as divisible property. The court will value your divisible property during your divorce trial.
Appraising The Property
Whether you negotiate a settlement with your spouse or have the court split your property based on equitable distribution, you need to have it appraised. In both cases, we use the fair market value to determine the cost of the property. Then, it is divided accordingly.
We can work directly with professional appraisers to establish the value of the property. We can then provide evidence to prove the value in court, if needed.
Avoid Litigation With A Separation Agreement
If you and your spouse don’t want to be bound by the equitable distribution laws or simply wish to avoid court, your attorney can draft a separation agreement for you. You can divide the property and determine alimony, child support, child custody, and more with the agreement.
Many people prefer to go this route because it allows them to avoid a courtroom battle that can lead to unpredictable and sometimes frustrating results. Also, both sides are more likely to be pleased with the outcome when they negotiate.
Motion For Equitable Distribution And Injunctive Relief
Are you concerned that your spouse is converting or destroying marital property to prevent you from receiving an equitable share? If so, you can file a motion for equitable distribution. You can use that to seek injunctive relief to prevent the other party from misusing or destroying assets. It’s important to file this motion quickly before the spouse burns through the assets.
In closing, equitable distribution aims for fairness, not equality. What makes it tricky sometimes, is that the divorcing couple, along with their attorneys might have a different take on what looks “fair.” That said, mediation is often effective in getting everyone on the same page. That could mean mediating with the attorneys, or hiring a third party mediator to help craft a solution that works for the parties. If the parties cannot agree on what seems equitable, litigation is necessary. But beware, if you decide to go that route, a judge will be deciding what he/she feels is equitable, and you are then forced to abide by that decision. We are here to help talk you through your options if you’d like to consult with us.
