With regard to asset division, states may adhere to one of two methods. In a community property state, the law considers all money and valuables acquired during marriage shared wealth owned equally by both spouses. This entitles each to a 50% share of said belongings and funds. Each one receives half. In an equitable distribution state, courts divide the marital estate based on fairness. The split does not have to be equal.
North Carolina falls into the latter category. For division purposes during a contested divorce, the state breaks property up into three classifications.
1. Separate property
Anything possessed before the marriage and brought into it is separate property. So are any inheritances or gifts bestowed solely upon one half of the couple by a third party during it. Individuals maintain complete ownership of their separate property in the case of divorce.
2. Divisible property
This consists of any property gained in the time between separation and the actual divorce. Essentially, it covers any change in marital asset value that may happen during this period. Applicable examples include bonuses or investments made before separation but not paid out until afterward.
3. Marital property
Any property obtained by a couple during marriage (before separation) and owned at the time of the legal proceedings falls under this umbrella. This includes retirement accounts and pensions.
For the actual splitting of divisible and marital property, courts consider several factors to determine what is fair. Note that the marital property allocation also includes debt incurred throughout the union. Responsibility for bills from after separation is not divided. It falls on the one who accrued them. Please contact our law firm for more information.