Property Matters and Divorce
for Traditional and LGBT Families
Call: (919) 883-4900
DEBTS & ASSETS: One of the daunting issues in divorce surrounds the division of marital assets and debt. Emotionally, it is not uncommon for the process to leave couples feeling financially vulnerable. The attorneys at NicholsonPham have found that understanding the property division process from a legal perspective can help to alleviate the stress and anxiety over this area of your divorce. Our family lawyers will help you explore the various options your family might have for property settlement and create a strategy which aligns with your goals for a happier future.
The process of dividing up the marital assets and debts is called “equitable distribution” (ED) in North Carolina. Division can occur through negotiation, mediation or litigation. Understanding the process of negotiation regarding the division of marital assets and debts can reduce the anxiety you may be feeling about property settlement in your divorce.
With the guidance of an experienced family law attorney, many divorcing couples are able to agree on how their property is divided. But, even in the friendliest of divorces, repercussions from agreements that do not consider each element of the family’s financial picture can have an impact which lasts far into the future. Adequate investigation into a family’s holdings, benefits and debt load will ensure property settlement negotiations are approached efficiently, fairly and from an educated perspective.
The attorneys at NicholsonPham will attempt to help the parties reach an agreement regarding division of their property and debts either through mediation or attorney negotiation. It is helpful to think about this process as a three-step journey in which the couple must decide:
- What is our marital property?
- What is the value of our marital property?
- What is an equitable distribution of our marital property?
When an agreement can’t be reached through negotiation and mediation, the court will divide the marital property and distribute debts after a trial based upon the evidence presented. Not surprisingly, the courts will take a very business-like approach to equitable distribution and the outcomes are rarely as beneficial as an agreement created by the parties. In the event you and your spouse are unable to come to a fair and healthy agreement on property settlement, NicholsonPham can ensure that the court understands your family’s complete financial portfolio.
At NicholsonPham, we work with our clients to gather the documents and make the calculations to determine what is reasonable, what a court could decide and what our client could agree to.
The first step is to calculate marital property. A general rule is that all property (assets and debts) that were acquired during the marriage for the benefit of the marriage is considered marital property. Property acquired prior to the marriage or after the date of separation is generally considered separate property.
Sometimes an asset will be both marital and separate, for example a retirement plan that is started by one spouse before the marriage and to which the spouse continues to contribute during the marriage.
The valuation of marital property generally is taken as of the date of separation. Distribution can be equal (50/50) but doesn’t have to be. Parties can decide to consider the different education levels, and physical and mental health of the couple, whether there are minor children, and various acts taken by the parties during the marriage. If a court decides the issue, then a court can either make a 50/50 division or consider all the statutory factors.
Property Division: Frequent Questions
Remember that the usual date of valuation is the date of separation. We recommend that parties who are preparing to separate begin to gather all financial documents relating to the marital property and debt. Credit card statements, mortgage balances, copies of deeds or titles and a breakdown of the couple’s finances can all be helpful for us to review. If there is a premarital agreement, the attorneys at NicholsonPham will want to review that, too.
It is possible to request an interim distribution of assets from the court. Or, the parties can agree to a partial distribution while they are still negotiating the final ED.
If you contributed to the retirement plan during the marriage, then the retirement is, at least partially, marital. However, parties can agree to “swap” assets, for example a party may want to keep her retirement if her spouse keeps the house.
Equitable distribution is supposed to be equal unless there are other factors that might lead a court to decide that an equal distribution is more equitable. Those factors are listed in NCGS 50-20. While marital misconduct (i.e. cheating) is not specifically listed the court is able to consider any factor it considers to be just and proper but only if the factor is relevant to the economic condition of the parties
Give us a call to talk through this issue. It’s an important consideration that is dependent on the facts of your case.
You can, but it’s not a good idea.
Yes. Many couples decide to enter a separation and property settlement agreement. If a court order is needed later (for example, to divide an ERISA retirement account), the attorneys at NicholsonPham can draft the necessary documents and both parties can sign them, without ever stepping foot into a courtroom.