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Equitable Distribution

Contact the Firm for a Consultation Regarding Distributing Property


Equitable distribution is North Carolina’s process for dividing property in a divorce. It is used by the court when spouses are unable to divide their property themselves. North Carolina views the marriage as a partnership where both contribute equally to the marriage. Therefore, the presumption is that each spouse should receive half of the marital assets and debts.

Oftentimes, distribution of the parties’ property is handled in a separation agreement. Otherwise, a lawsuit for equitable distribution must be filed with the court prior to divorce. North Carolina categorizes property as either marital, divisible or separate property. Marital property is property acquired during marriage by either spouse that is also owned on the date of separation. Gifts and inheritances are generally not considered marital property unless given to the other spouse during the marriage. Separate property is owned before the marriage. The trial court must specifically distinguish and classify the marital and separate property. It must be specific enough to allow the North Carolina Court of Appeals to determine the accuracy of the valuation.

After determining the type of property, the court must determine the value of the marital property on the date of the parties’ separation. The property is valued using the fair market value minus the amount of any encumbrance.  The fair market value is the price which a willing buyer would pay to purchase the asset on the open market from a willing seller, with neither party being under any compulsion to complete the transaction.

Under North Carolina law, an equal division of the marital property is mandatory unless it would be unfair. The court must determine if an unequal split is fair by using an explicit list of factors. There are many statutory factors in favor of unequal distribution, including the: earnings of both parties; health and age of both parties; time of marriage; liabilities of the parties; efforts of either party to maintain and preserve the marital property; debt of both parties; existence or lack thereof of pension, retirement, or similar compensation packages; support of education ventures; and tax consequences of the distribution of retirement accounts.

Equitable distribution can be complex for even the most seasoned attorney, especially with long-term marriages or if a business is involved. To discuss the process of dividing your property after a divorce or separation, contact our family law attorneys.


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