When people consider divorce in North Carolina, they may focus on things like alimony, child support, and who gets the kids. That’s understandable. It makes sense to center on your immediate needs and daily life.
And yet, it’s imperative not to concentrate solely on the small numbers and miss the big picture and the truly big financial considerations. Some of the most contentious litigation in Family Court involves property distribution through a process called Equitable Distribution in North Carolina or “ED.”
Equitable Distribution Orders in North Carolina
“That may expose a fundamental misunderstanding of the North Carolina divorce laws. Equity and what is ‘equitable’ does not necessarily mean 1/2. Part of legal representation for divorce includes explaining differences between a marital asset, separate property, and divisible property.”
– Bill Powers
In considering whether an Equitable Distribution Order or “ED Order” is consistent with North Carolina divorce laws, the NC Court of Appeals upholds the Family Court ruling if it is supported by competent evidence. Except for instances of a “clear abuse of discretion,” Equitable Distribution is deemed to be in the discretion of the Family Court Judge.
As such, rulings on Equitable Distribution supported by reason and competent inquiry will be upheld, as are those family court rulings that comply with the NC divorce statute. Absent that, a family law attorney likely be unable to challenge the Court’s ruling.
The family court Judge must comply with N.C.G.S. 50-20(c) and the twelve factors (and subsections) pertaining to Equitable Distribution. Those factors include things like:
- Income of the parties at the time of division of property
- Property and financial liabilities
- Support obligations from a prior marriage
- Length (duration) of the marriage
- Age of the parties, their mental health, and physical health
- Need of the custodial parent to occupy (or own) the marital household/residence
- Retirement Accounts, 401(k), Pensions, and Deferred Compensation
- Marital Waste, Neglect of Marital Property, or Devaluation of Marital Property
- Efforts by the parties to Preserve, Develop, Maintain, or Expand Marital Property
- Any other factor or consideration the Family Court deems just and proper
ED is considered to be a 3 step process:
- Classification of the Property as Separate Property, Marital Property, or Divisible Property; and,
- Determine the Net Value of the Property; and,
- Distribution of Property in Equitable Manner
In determining #2 as to Net Value, the family court Judge calculates the “net fair market value” of any property through evidence presented by the parties.Is Expert Testimony Required for Equitable Distribution?
While common, there are instances when expert testimony is not required in determining the net value of marital property or assets. An individual owner of the property is deemed competent to testify about the value of his or her own property, even if they would not necessarily qualify as an “expert” under N.C. Rule of Evidence 702.
“An owner is entitled to provide testimony regarding the value of his own property, unless it is clear they do not know the value. One cannot give an unsubstantiated opinion and therefore requires supporting facts.”
– Bill Powers, Charlotte Divorce Attorney
One of the more intricate aspects of separation and an eventual divorce involves the classification and distribution of assets. Indeed, determining what is a marital asset vs personal property can be the subject of contentious litigation, as was evidenced in the Beasley vs. Beasley ruling.
“If you have questions about separation and divorce, we’re here to help. It’s easy to confuse alimony, support, and ED in North Carolina. Given the potential long-term consequences of an ED ruling in family court, it’s imperative to begin determining assets of the marital estate almost immediately.”
Call Bill Powers NOW: 704-342-4357