Winston-Salem & Greensboro Equitable Distribution Lawyers
Help with property division disputes in the divorce process in the Piedmont Triad
Division of marital property can be a contentious issue in any divorce, even when the split is mutual and otherwise amicable. Often, a couple is unable to come to agreement on their own, and it may fall to a judge or arbitrator to make the decisions on who gets what. The formal process of property division in NC is called “equitable property distribution,” which is how the court assesses and divides marital assets between spouses.
Couples should remember that “equitable” division does not necessarily mean “equal” division. Equitable means fair in the eyes of the court, which can be quite different than just splitting up assets and property 50/50 between the spouses. This is why it is important to have knowledgeable counsel on your side to protect your interests. The experienced divorce attorneys at Hartsoe & Associates, P.C. can help.
What are the types of property classifications in divorce?
During the property distribution process, the court must first classify all of your and your spouse’s property into one of three categories – marital, divisible, and separate.
This is all the property and assets acquired by either spouse during the course of the marriage, all the way up to the date of separation. This excludes separate property, but typically includes the following:
- Cars, boats, or other vehicles
- Debts or back taxes
- Family business
- Home furnishings
- Income earned by either or both spouses during the marriage
- Marital home or vacation homes
- Retirement and investment accounts
- Any other property or assets jointly owned before separation
State law presumes that any property acquired after marriage but before separation is marital property, which means that the court does not care if the assets/debts are in the name of just one spouse. However, this presumption can be challenged in court – our family law attorneys can help.
Separate property, on the other hand, is any property or assets that you or your spouse owned prior to your marriage. This includes property acquired during the marriage via gift or inheritance given to you (or your spouse) specifically. If you or your spouse have any business or professional licenses, those also count as separate property.
Finally, divisible property is any assets earned before separation but that changed in value after the date of separation. The courts need this category because often there is a significant period between separation and the actual date of property division by the court, and the asset may have increased or decreased in value during that time. This can happen with investment accounts or small businesses, for example.
The general rule of thumb in equitable distribution of property in North Carolina is that marital property is divisible, and separate property is not.
How does the equitable division of property work?
Division of property in Winston-Salem and Greensboro consists of four steps:
- Identification. In this first step, the court identifies all of the assets and debts held by the couple. At this point, it doesn’t matter when the spouses acquired the property or who owns it – this step is simply collecting and identifying all property.
- Classification. Step Two classifies all assets and debts into separate, marital, or divisible. As discussed earlier, separate property is anything acquired before the marriage, as well as any inheritances and gifts received during the marriage. Marital property is assets and debts collected during the marriage up until the date of separation. Finally, divisible property deals with any changes in value to marital assets after separation.
- Valuation. Next, all assets and debts are assigned a value. This is one of the most important parts of the property division process. The attorneys at Hartsoe & Associates can help ensure your assets are valued properly – we work with financial experts to determine the true value of your marital property.
- Equitable distribution. The last step is the actual distribution of assets and property. The court takes a number of factors into consideration when determining how to divide marital assets and debt between spouses, including:
- Current income and property of each spouse
- Current support obligations of each spouse
- Length of marriage
- Age and health of each spouse
- Each spouse’s contribution to the acquisition of marital property
- Each spouse’s contribution to the other’s career or educational advancement
- Tax consequences of property distribution on each spouse
It is important to note that marital misconduct does not come into play when determining equitable distribution of property. However, if one spouse has engaged in fraudulent or improper activity regarding the couple’s finances, it may affect how the court distributes the property.
The divorce attorneys at Hartsoe & Associates can work with you to protect the things you hold valuable.
Does the court always decide on property distribution?
No. If you and your spouse are able to settle these matters on your own, you may – and this is the ideal situation in any divorce. With the help of mediation or collaborative law, you and your spouse can divide your property in a way that feels fair to both of you and add it to your divorce agreement. If you are unable to come to mutual agreement, then the court may have to decide for you, which may not always work out in the way you or your spouse may be happy with. Our Piedmont Triad divorce lawyers can help you meet your goals.
Will property division affect my taxes?
Division of marital property is usually a non-taxable event. When property and assets are divided and transferred between spouses as part of a divorce order, it is neither taxable as income or allowed as a deduction. However, there may be tax ramifications when spouses transfer funds between IRAs or retirement accounts, or if they sell off assets to a third party and split the proceeds. Before signing any settlement agreement, ensure you understand all the financial consequences.
Experienced property division and equitable distribution attorneys
At Hartsoe & Associates, P.C., our legal team has over 25 years of experience helping clients through the divorce process. We work with you to keep the things you hold important, and ensure the property distribution process remains fair and equitable. Our office serves families and clients in Winston-Salem and Greensboro, as well as the Piedmont Triad. To schedule a consultation with an experienced lawyer, please call 336-725-1985 or fill out our contact form.