When considering divorce, it is important for individuals in North Carolina to think not only about asset division, but also about how the division will affect their finances after the settlement is finalized.
Immediate needs, such as making sure that they have adequate liquid assets to pay for essentials like food, clothing and shelter, may be obvious. However, some people overlook their long-term needs for financial security.
Whether you are considering divorce or have decided to file, you need to be confident that the outcome of your dissolution covers your needs now and in the future. This begins with a full accounting — and understanding — of all your assets and debts.
It’s important because North Carolina follows the tenet of equitable distribution. Anything that is classified as marital property is subject to division, while separate property is not.
Disputes over the nature of property happen
As with so many elements of the law, the definition of marital property is one that is couched in qualified terms. Simply put, marital property is said to refer to any material or financial interest that has been acquired during the period of the couple’s marriage. There are exceptions, however.
For example, let’s say that one party to the marriage receives an inheritance during their time together. That money stands as separate property and is not subject to division in divorce. Even if some of the proceeds from that bequest were used to make a joint purchase – such as a vacation home – that property may remain the separate property of the person who provided the funds.
The same could be said about debts. Those obligations incurred by the individuals before marriage would remain theirs after the divorce. Those incurred jointly during the marriage may be subject to division.
Money in retirement accounts or deferred compensation that is in one spouse’s name and paid after the divorce might feel like separate property to many people. However, because of the discretion allowed to the courts, judges can order those assets divided for fairness sake.
Remember: a division that is fair and equitable in your eyes might be different in the eyes of the court. So, skilled representation in preparation, negotiations and through litigation – if required – becomes essential.