Going through a separation and divorce can be overwhelming, especially when dividing assets. One term you’ll likely encounter is “non-marital property,” which plays a crucial role in how spouses divide property between each other.
In North Carolina, understanding the distinction between your non-marital and marital estate property can significantly impact the outcome of your divorce case. So read on as we define non-marital assets and what you can do to protect them during this challenging time.
What are Marital Assets?
Marital assets are the things you and your spouse own together. Assets can include money, houses, cars, and even retirement accounts.
In North Carolina, the law says that marital assets are all the real and personal property that either spouse or both spouses obtain during their marriage, up until the date you decide to separate.
Assets include pensions and retirement accounts, whether they’re ready to be used now or in the future.
Source: “Marital property means all real and personal property acquired by either spouse or both spouses during the course of the marriage and before the date of the separation of the parties, and presently owned, except property determined to be separate property or divisible property…” (Ch 50 Article 1, pg 33)
What is Considered Marital Property in North Carolina?
In North Carolina, the law assumes all assets you get after marriage but before separation are marital assets. This can include real estate that both spouses own.
But, the law also says that you can show evidence to prove that some real estate should not be considered marital property.
Source: “It is presumed that all property acquired after the date of marriage and before the date of separation is marital property except property which is separate property under subdivision (2) of this subsection. It is presumed that all real property creating a tenancy by the entirety acquired after the date of marriage and before the date of separation is marital property.” (Ch 50 Article 1, pp 33-34)
What is Considered NonMarital Property in North Carolina?
Non-marital property, or “separate property,” is what you owned before or during the marriage as a gift or inheritance. These assets can also include what you received in exchange for these assets.
For example, if you sold a car you owned before marriage and used the funds to buy another car, that new car is also a separately owned asset. The law says that any monetary value increase in separately owned assets and any income from it also counts as a separately owned asset.
Source: “Separate property means all real and personal property acquired by a spouse before marriage or acquired by a spouse by devise, descent, or gift during the course of the marriage. However, property acquired by gift from the other spouse during the course of the marriage shall be considered separate property only if such an intention is stated in the conveyance. Property acquired in exchange for separate property shall remain separate property…” (Ch 50 Article 1, pp 33-34)
Understanding these terms can help you know what to expect when dividing property during a divorce. It’s always a good idea to consult with a legal advisor to get advice tailored to your specific situation.
How is Property Divided in a North Carolina Divorce?
When you get a divorce in North Carolina, the court will look at everything you and your spouse own and decide how to split it up. This is called “equitable distribution,” which means the court tries to divide everything fairly but not necessarily equally.
The Basics of Equitable Distribution
In North Carolina, the law says that the court should usually divide marital and divisible property equally between spouses. But sometimes, equal isn’t fair. The court can divide things differently based on several factors in those cases.
Source: “There shall be an equal division by using net value of marital property and net value of divisible property unless the court determines that an equal division is not equitable. If the court determines that an equal division is not equitable, the court shall divide the marital property and divisible property equitably.” (Ch 50 Article 1, pg 34)
Factors the Court Considers
The court looks at different things to decide what’s fair. This can include how much money each person makes, any debts they have, how long they’ve been married, and even their health. If one spouse has custody of the kids, the court might also consider whether they should keep living in the family home.
Source: “The court shall consider all of the following factors under this subsection: The income, property, and liabilities of each party at the time the division of property is to become effective. Any obligation for support arising out of a prior marriage. The duration of the marriage and the age and physical and mental health of both parties. The need of a parent with custody of a child or children of the marriage to occupy or own the marital residence and to use or own its household effects.” (Ch 50 Article 1, pg 34)
What About Agreements Between Spouses?
Sometimes, couples make their agreements about how to split things up. If you and your spouse have a written contract that you both signed, the court will usually go along with it.
Source: “Before, during or after marriage the parties may by written agreement, duly executed and acknowledged in accordance with the provisions of GS 52-10 and 52-10.1, or by a written agreement valid in the jurisdiction where executed, provide for distribution of the marital property or divisible property, or both, in a manner deemed by the parties to be equitable and the agreement shall be binding on the parties.” (Ch 50 Article 1, pp 34-35)
Understanding how property gets divided in a North Carolina divorce can help you prepare for what’s ahead. It’s always a good idea to talk to someone who knows the law to get advice that fits your situation.
Protecting Your Non-Marital Property
When going through a divorce, you might be worried about keeping the stuff that belongs only to you, like things you had before you got married or gifts you received. There are ways to ensure your non-marital property stays yours in North Carolina.
Written Agreements Between Spouses
One way to protect your non-marital property is by having a written agreement with your spouse. This agreement should clearly state what belongs to whom. If you both sign it, the court will usually respect it when dividing your nonmarital assets property.
Source: “Before, during or after marriage the parties may by written agreement, duly executed and acknowledged in accordance with the provisions of GS 52-10 and 52-10.1, or by a written agreement valid in the jurisdiction where executed, provide for distribution of the marital property or divisible property, or both, in a manner deemed by the parties to be equitable and the agreement shall be binding on the parties.” (Ch 50 Article 1, pp 35-36)
Keep Records
Another way to protect your non-marital property is by keeping good records. Ensure you have documents showing when you got the property and how you paid for it. This can help prove that it’s yours.
Source: “Within 90 days after service of a claim for equitable distribution, the party who first asserts the claim shall prepare and serve upon the opposing party an equitable distribution inventory affidavit listing all property claimed by the party to be marital property and all property claimed by the party to be separate property, and the estimated date-of-separation fair market value of each item of marital and separate property.” (Ch 50 Article 1, pg 40)
Don’t Mix It Up
Be careful not to mix your non-marital property with marital property. For example, if you had a bank account before marriage, don’t start using it for family expenses. This could make it harder to prove that the money is yours alone.
Source: “Any direct contribution to an increase in value of separate property which occurs during the course of the marriage.” (Ch 50 Article 1, pp 34-35)
By taking these steps, you can better protect your non-marital property during a divorce in North Carolina. It’s always good to be prepared and know your rights.
Common Mistakes to Avoid
It’s easy to make mistakes when you’re going through a divorce, especially when protecting your non-marital property. Here are some common pitfalls to watch out for, along with tips on how to avoid them.
Mixing Marital and Non-Marital Property
One of the biggest mistakes people make is mixing their separate property with marital property. For example, if you use money from an account you had before marriage to pay for family expenses, it could become marital property.
Source: “Any direct contribution to an increase in value of separate property which occurs during the course of the marriage.” (Ch 50 Article 1, pp 34-35)
Not Keeping Good Records
Another mistake is not keeping good records of your nonmarital assets and marital property. You should have documents that show when you acquired the property and how you paid for it. This can help you prove that it’s separate property.
Source: “Within 90 days after service of a claim for equitable distribution, the party who first asserts the claim shall prepare and serve upon the opposing party an equitable distribution inventory affidavit listing all property claimed by the party to be marital property and all property claimed by the party to be separate property, and the estimated date-of-separation fair market value of each item of marital and separate property.” (Ch 50 Article 1, pg 40)
Ignoring Tax Consequences
Sometimes, people forget to think about the tax consequences of dividing property. The court can consider this when deciding how to divide things, so you should be aware of it, too.
Source: “The tax consequences to each party, including those federal and State tax consequences that would have been incurred if the marital and divisible property had been sold or liquidated on the date of valuation. The trial court may, however, in its discretion, consider whether or when such tax consequences are reasonably likely to occur in determining the equitable value deemed appropriate for this factor.” (Ch 50 Article 1, pg 35)
Not Consulting Experienced Family Law Attorneys
Every divorce case is unique, and the laws can be complicated. It’s a mistake not to consult someone who understands North Carolina law to get advice tailored to your specific situation.
Source: “Upon application of a party, the court shall determine what is the marital property and divisible property and shall provide for an equitable distribution of the marital property and divisible property between the parties in accordance with the provisions of this section.” (Ch 50 Article 1, pg 33)
By being aware of these common mistakes and knowing how to avoid them, you can better protect your non-marital property during a divorce in North Carolina. Always remember, it’s better to be safe than sorry.
Examples of Married Couples and Equitable Distribution in NC
While the PDF doesn’t provide specific real-life examples or case studies related to non-marital property in North Carolina divorce, it does offer valuable legal guidelines that can be applied to various scenarios. Here are some hypothetical case studies based on the legal principles outlined in the document.
Case Study 1: The Pre-Marriage Home
Scenario: Sarah owned a home before she married Tom. They lived in the home together during their marriage.
Legal Insight: According to North Carolina law, the home remains Sarah’s separate property because she acquired it before the marriage. However, any increase in the house or its value during the marriage could be considered marital property.
Source: “Separate property means all real and personal property acquired by a spouse before marriage…” (Ch 50 Article 1, pp 33-34)
Case Study 2: The Family Business
Scenario: John and Emily started a business together after getting married.
Legal Insight: The business would be considered marital property, as it was acquired after the date of marriage and before the date of separation.
Source: “It is presumed that all property acquired after the date of marriage and before the date of separation is marital property…” (Ch 50 Article 1, pp 33-34)
Case Study 3: The Inherited Money
Scenario: During their marriage, Emily received a large sum of money as an inheritance from her grandmother.
Legal Insight: The inherited money would be considered Emily’s separate property, as it was a gift received during the marriage.
Source: “Separate property means all real and personal property acquired by a spouse… by devise, descent, or gift during the course of the marriage.” (Ch 50 Article 1, pp 33-34)
Case Study 4: The Retirement Account
Scenario: Sarah had a retirement account before marrying Tom, but both contributed to it during the marriage.
Legal Insight: The portion of the retirement account that existed before the marriage remains Sarah’s separate property. Contributions made during the marriage would be considered marital property.
Source: “Separate property means all real and personal property acquired by a spouse before marriage…” (Ch 50 Article 1, pp 33-34)
Understanding these hypothetical scenarios can help you grasp how North Carolina law treats non-marital property in divorce cases. Always consult with a legal advisor for advice tailored to your specific situation.
A Knowledgeable NC Separation and Divorce Attorney Can Help
At Plekan Law in Asheville, NC, we understand that navigating the complexities of the divorce process and property division can be overwhelming.
North Carolina law has specific guidelines for what counts as marital and non-marital property, as well as how to divide assets more fairly. While the statutes provide a framework, every case is unique, and the court considers various factors when making its decision.
Our team of experienced attorneys can help you understand your rights and options. We’ll guide you through the legal process, ensuring you have the information you need to make informed decisions.
Whether you’re concerned about protecting your non-marital property or need advice on equitable distribution, we’re here to provide the support and expertise you need.
Don’t go through this challenging time alone. Reach out to an experienced divorce attorney at Plekan Law for personalized, knowledgeable guidance tailored to your specific situation. We’re committed to helping you achieve the best possible outcome in your North Carolina separation or divorce case.