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Property Division · Equitable Distribution

In North Carolina, the division and distribution of marital property is called Equitable Distribution (ED). Marital propertyis all property that was acquired during the marriage, by either spouse, regardless of title, other than property that received as a gift or by inheritance. Property that was owned by a spouse before marriage, or property that was acquired during the marriage by gift or inheritance, is called separate property, and is not subject to equitable distribution by a court. Divisible property is property that was earned during the marriage but received after date of separation or passive growth on marital property.

The parties must be separated from one another in order to file a claim for equitable distribution. However, parties may settle the issue of equitable distribution prior to separation so long as the settlement documents are signed close to the date of separation.

The property being divided and distributed in equitable distribution is the marital property that was owned as of the date of separation, valued as of the date of separation, taking into account passive and active increases and decreases.

In making an equitable distribution of marital property, the court presumes that equal (50/50) is “equitable.” While a court is not required to make a 50/50 distribution, the concept that “equal is equitable” is a strong presumption under the law. Parties need not settle at 50/50, but often do. The economic misconduct of a party may be considered as a factor justifying an unequal distribution; however, marital misconduct not considered unless substantial money went into funding an affair.

Equitable distribution is often one of the more complex issues in family law. Closely held and family run businesses add additional layers of complexity. Issues often arise in equitable distribution related to how property is acquired, the infusion of gifts or inheritance into the marriage finances, debt used to fund a lifestyle that isn’t supported by income, valuation and division of pensions and retirement accounts, misuse of marital funds in anticipation of separation, etc. Talk to a lawyer and know your rights on this issue as soon as you realize you’re separating, so you make good decisions to protect yourself well into the future.

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