Marital Property in North Carolina
In North Carolina, both spouses have a right to the couple's marital property. North Carolina defines marital property as property obtained by either or both spouses after their marriage date and before the date of their separation. Separate property is property that a spouse acquired before the marriage or during the marriage by inheritance or gift. If the spouses cannot agree on whether a house qualifies as marital or separate property, they can ask the court to decide the matter as part of their divorce filing. However, to avoid contested proceedings in court, the spouses can choose to sign a written agreement that establishes each person's marital property rights.
When spouses can't agree on how to divide their property, North Carolina requires an equitable -- or fair -- distribution of assets and debts based on a list of factors established by state law, all of which the court must consider. These factors include the duration of the marriage, each spouse's income, tax consequences and a number of others. Based on these factors, the court may allow one spouse to continue living in the house or order the spouses to sell the property. In addition, if one spouse will live in the family residence, the court may need to decide each spouse's responsibility for financial obligations such as mortgage payments, taxes and upkeep.
North Carolina specifically considers the needs of parents who will have custody of their children after divorce. The court must look at whether the custodial parent needs to live in or own the family home while raising children from the marriage. Accordingly, the spouses' custody arrangement may affect the court's decision regarding an equitable distribution of a house.
House as Separate Property
If the family residence does not qualify as marital property, one spouse may be able to keep the house as separate property. The court generally does not divide the separate property of a spouse during divorce. In general, North Carolina marital property laws establish separate property as property gained before marriage or received during the marriage by gift or inheritance. In addition, if one spouse used separate property to buy the house, the house may remain separate property, even if it was purchased during the marriage.