By Jim DeMay
The initial segments of this series about property division upon divorce explored the first two parts of the equitable distribution process – identification and valuation. After all the marital property is identified and valued by the court, the final step is for the court to divide the property between the parties.
Pursuant to N.C. Gen. Stat. §50-20, the division of marital property shall be equal. However, the court can deviate from an equal division if the court determines that an equal division is not equitable. The factors that the court can consider in determining whether an equal division is not equitable are as follows:
- 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;
- The expectation of pension, retirement, or other deferred compensation rights that are not marital property;
- Any equitable claim to, interest in, or direct or indirect contribution made to the acquisition of such marital property by the party not having title, including joint efforts or expenditures and contributions and services, or lack thereof, as a spouse, parent, wage earner or homemaker;
- Any direct or indirect contribution made by one spouse to help educate or develop the career potential of the other spouse;
- Any direct contribution to an increase in value of separate property which occurs during the course of the marriage;
- The liquid or non-liquid character of all marital property and divisible property
- The difficulty of evaluating any component asset or any interest in a business, corporation or profession, and the economic desirability of retaining such asset or interest, intact and free from any claim or interference by the other party;
- 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;
- Acts of either party to maintain, preserve, develop, or expand; or to waste, neglect, devalue or convert the marital property or divisible property, or both, during the period after separation of the parties and before the time of distribution;
- In the event of the death of either party prior to the entry of any order for the distribution of property made pursuant to this subsection:
- Property passing to the surviving spouse by will or through intestacy due to the death of a spouse;
- Property held as tenants by the entirety or as joint tenants with rights of survivorship passing to the surviving spouse due to the death of a spouse;
- Property passing to the surviving spouse from life insurance, individual retirement accounts, pension or profit-sharing plans, any private or governmental retirement plan or annuity of which the decedent controlled the designation of beneficiary (excluding any benefits under the federal social security system), or any other retirement accounts or contracts, due to the death of a spouse; or
- The surviving spouse’s right to claim an “elective share” pursuant to G.S. 30-3.1 through G.S. 30-33, unless otherwise waived; and
- Any other factor which the court finds to be just and proper
If, upon a finding that one or more of the above factors exists, the court may, in its discretion, order an unequal distribution of the marital property.
It is often impractical for the parties to simply “divide” the property equally. For example, if the total value of the marital estate is $300,000, and $200,000 of that total value is the value of the marital residence, then the spouse who is awarded the marital residence will receive more than 50% of the marital estate through that asset alone. In such cases, that party who receives less than 50% of the assets will receive a “distributive award” from the other party to offset this disparity. In the above example, if one spouse received the $200,000 home and the other spouse received the remaining $100,000 in marital assets, then the spouse who received the home would make a $50,000 distributive payment to the other spouse. Call 704-788-3211 to learn more from a Concord divorce attorney.