Equitable Distribution of Property in Huntersville, Cornelius and Mooresville, NC
Equitable Distribution is the term used for the process of dividing up your property, money and debts. In all divorce cases in North Carolina including throughout the greater Charlotte area where you and your spouse own anything together and/or where you owe anyone or any entity money, then Equitable Distribution needs to be addressed. As we explain below, it doesn’t matter whether the asset or debt is in both names or yours alone, if it was acquired or incurred during the marriage it is presumed to be part of the marital estate and has to be dealt with.
An Equitable Distribution case has 4 steps:
- Identify the Property and/or Debts:
During this step the goal is to create a comprehensive list of what goes in the marital estate. The general rule is that all assets or debts acquired after the date of marriage and before the date of separation are included. Things get a bit more complicated when there are separate assets that either spouse had prior to the marriage or when there has been a long time period between the date of separation and the date of distribution.
- Classify the Property and/or Debts:
Classification really ties into step number 1, and many people treat them as one process. At the most basic level, the goal here is to classify all property or debts as either 1) marital; 2) separate or 3) divisible. These classifications are very specifically defined in N.C. Gen. Stat. Sec. 50-20. Getting things into categories 1 and 2 is not nearly as difficult as dealing with category 3. If there’s been a gap in time (more than 60 days or so) or any big change in assets between the date of separation and the date things are divided up in a Judgment or Separation Agreement, it really is important for you to sit with an attorney and be sure you have everything in the right columns.
- Value the Property and/or Debts:
Some property is easy to value; for example, you can look at your bank statement and know exactly what an account is worth on any given day. You can generally do the same for investment accounts and retirement accounts. However, some property is much more difficult to value. Assets like stock options, restricted stock units and pensions can be difficult to value and at times we need to bring in a professional, like an accountant or financial advisor, to help us with those values. Other property may seem simple to value but is often overvalued; your prized gnome collection is a good example. It’s not uncommon for people to overvalue personal items they have an emotional attachment to. In general, tangible personal property items are valued based on what a reasonable person would pay you for the item on the open market — garage sale prices. However, if you have pieces that you believe are collectible and therefore more valuable, we can certainly find an appraiser to help set the prices accurately.
- Distribute the Property and/or Debts:
If possible, we try to keep assets intact. For example, if you have a bank account with a $100 balance and your spouse has an account with a $50 balance, the easiest distribution is to give your spouse $25 from your account so you each have the same amount. Sometimes it simply isn’t possible and an individual asset needs to be divided. In the end, the goal is the same – for each spouse to have one-half of the net value of the marital estate.
Seems simple right? Not always. You and your spouse may have real disagreements about what property is actually in the marital pot to be divided and what the real value is. We use an Equitable Distribution Inventory as the starting point for determining what you have and what it is worth. The form can be a bit intimidating, but we’re here to walk you through it and be sure that it’s as accurate as possible.
For help with equitable distribution in Huntersville, Cornelius and Mooresville, NC, speak with one of our family law attorneys today.