During the divorce process, North Carolina couples can make their own property settlement agreement, either on their own or with the help of mediation. If the spouses cannot agree, they can request that the court divide their assets. They do this by filing a separate complaint for the court to divide assets before the final divorce judgment is entered. Generally, North Carolina courts make decisions about property division in a separate hearing after the divorce is granted.
North Carolina is an “equitable distribution” state, so courts distribute marital property equitably between spouses, but not necessarily equally. Courts presume the fairest split is an equal split, but the court can split a couple’s property in a way that isn’t exactly equal by considering several factors listed in North Carolina law. These factors include the spouses’ income, duration of the marriage, preexisting support obligations and the likelihood that each spouse will receive retirement income. The judge also considers the contributions each spouse made to the marriage, including contributions one spouse made as homemaker. Thus, even if one spouse did not work outside the home during the marriage, the court can consider her contributions when it decides how property should be divided.
Separate Property Vs. Marital Property
North Carolina judges can divide a couple’s marital property only, not the individual, separate property belonging to each spouse. Property acquired during marriage is generally considered marital property, subject to the court’s division. But property acquired by one spouse during the marriage as a gift or inheritance, as well any property acquired before marriage, is considered the separate property of the spouse who acquired it. However, separate property can become marital property if the owning spouse gives it to the other spouse during the marriage or if it becomes mixed with marital assets so that it cannot be separated anymore.
North Carolina permits divorce on one of two grounds, living separate and apart for at least a year or incurable insanity, so fault is not legally relevant as a reason for the divorce. Fault is also not legally relevant when it comes to property division. While dividing property, the court will not consider who caused the marriage to break up, even if one spouse committed adultery or abandoned the other spouse. However, if one spouse’s misconduct directly affected marital property, the court may consider the impact to the estate. For example, if one spouse spent marital funds on his adulterous affair, the court may consider that misconduct when distributing property.