Divorce and separation are fraught with traumatic and emotional issues, without the added burden of financial conflict. Property division is the justice system’s response to financial issues in divorce, and it is an objective process that distributes marital assets and debt fairly between a husband and wife. Many divorcing spouses are able to work out the financial and property issues through negotiation and settlement arrangements. However, there may be personal and valid reasons why couples are unable to amicably resolve the division of their marital property. In these situations, spouses may require intervention through North Carolina’s “Equitable Distribution of Assets”. This process and statute empowers the court to divide all marital property (including real and personal property) and debts in a three step process.
Marital property is defined as all assets acquired during the marriage and prior to the date of separation. All marital property is subject to fair distribution between the marital partners. However, rights to equitable distribution are not automatic, so one or both spouses must specifically claim it prior to a divorce judgment. The steps in the equitable distribution process involve:
- Identification of property as either marital or separate. Separate property is owned prior to marriage, or is inherited property or a gift. There are circumstances where an item of property may receive a dual classification.
- Valuation of property assigns a fair market value to each asset.
- Distribution is the act of fairly dividing marital property between the parties (unless there are facts to demonstrate that equitable distribution would be unjust).
The court considers several factors in making their determination of equitable distribution of assets. These factors include income, debt, property of each spouse; prior marital support obligations; duration of the marriage, age and health of each partner, needs of the custodial parent to maintain the martial residence, contributions of one spouse to the education of another, and retirement and pensions. To protect assets until the equitable distribution is made, the court may enter an injunction to prohibit the transfer, depletion or hiding of assets. This tool may be helpful if you are involved in a situation where the other party is depleting bank or stock accounts.
It is important to have full disclosure of each spouse’s assets in resolving the issue of property division. Couples in the throes of divorce or separation are often unprepared to objectively consider settlement offers, counter offers and other complexities associated with different types of investments. Traumatized or confused spouses may agree to divide their property and are divorced without ever understanding what they’ve sacrificed. Other partners accept financial terms to hasten the divorce and then find themselves in financial crisis at a later date. Therefore, it is important to have the help of an attorney who understands the importance of a comprehensive financial picture to their client’s future. An experienced lawyer will search for any hidden assets, as well as determine the “real” value of the marital estate and business investments. A skilled Family Law attorney can help you protect yourself and your future by investigating information such as bank accounts, stock options, deferred compensation plans, real estate, brokerage accounts, foreign accounts, offshore trusts and deferred tax planning devices that can be difficult to sort out and assess. If you and your spouse are in litigation over equitable distribution of your marital property, your attorney has the ability to “discover” your spouse’s assets by filing the appropriate motion. Perhaps you believe that your spouse may be transferring joint assets out of your name, or hiding assets. Or your spouse may have hired their own attorney. In these situations, it is especially important to seek legal counsel.
Williams Law Group, PC recognizes that having a comprehensive picture of your marital finances is not only crucial to negotiating your best possible financial terms and standard of living – it is critical to your future. Let us help you with our legal advice and commitment to protecting your rights first. Please contact us today at (919)773-1440 or via email.