Note and Disclaimer: This post is not intended to give legal advice. It is a general overview of the NC process for dividing assets for couples who are divorcing. If you have specific questions about your situation, and whether an asset or debt would be considered to be marital and subject to division, you should speak to a lawyer.
North Carolina uses a process called Equitable Distribution when couples divorce to divide their marital assets. As a simple explanation, when a couple divorces their marital assets are divided equitably (which most often means equally, but not always). Marital assets are assets that were acquired during the marriage except for things that were inherited or received as gifts. They include everything: houses, other real property, retirement accounts, personal property, privately owned businesses, etc. Sometimes, there is a mixed asset. For example, maybe you had $10,000 in your retirement account when you got married and now there is $50,000 in there. Part of that account is a marital asset and you also have a separate interest in the $10,000 you had in there on date of marriage (and if it can be ascertained, the earnings on that $10,000). Debts are also considered. Marital debts are apportioned between the parties. Marital debts are debts incurred during the marriage for the benefit of the marriage. Credit card debt where gas, food, clothing, family vacations, etc are charged are very often considered marital debt. Generally, medical debt is also marital. Sometimes educational debt can be considered marital. Mortgages, car loans, etc are all considered.
Essentially, the law in North Carolina requires that we add up all marital assets and subtract the marital debt. That leaves us the net marital estate. That estate should be divided equitably (again, that usually means equally, but not always). Put another way, you each end up with roughly the same amount of assets and debt.
North Carolina does not consider fault for the divorce in dividing the assets. Fault may (not necessarily will, but may) be considered in other issues but it won’t be considered in dividing your marital assets.
The marital assets will be divided by the courts equitably if people can’t decide for themselves how to divide their marital assets. The court requires a lengthy and expensive process of inventorying all assets and then requires the parties to go through a mediation process with their attorneys and a mediator to try to settle their property division claims. Often one party tries to hide assets which slows the process but is not successful. Parties to lawsuits (which is what you are if you have to file a court action to divide your property) engage in discovery (sworn questions you have to answer, documents you have to produce, depositions where you are questioned under oath), and they have subpoena power to obtain documents pertaining to the other party. That means the truth will be found out. But it can be a long, painful and expensive process to get there.
In our divorce mediation process, we send you a questionnaire to help you compile all information so that we can identify the marital assets and debts that need to be divided. As long as both parties participate honestly, we can short circuit that long and expensive process of inventorying your marital estate. We then help you divide those assets and debts. We do pay attention to see if the proposed division is generally consistent with the principles of Equitable Distribution described above. The great thing about mediation is that you have flexibility and don’t necessarily have to do what the courts would do. But we also want to make sure that you both end up with a fair result. Our mission is to provide value in helping you to divide your assets fairly, expeditiously, and with a minimum of conflict. If we see a proposed agreement that is extremely different from NC law, we may ask questions regarding why you want to do it that way just to ensure that we don’t end up with a situation where we draft a summary of an agreement, one of you has an attorney review it and the attorney tells you not to sign it! Then you will have wasted time and money and that is not good for you or for us. Sometimes, if what you are considering is drastically different from NC law, we may even recommend that you consult an attorney before we finalize our mediation.
Mediation can help you get a fair and wise resolution that will save you tens of thousands of dollars, years of your life, and a lot of frustration. If you think this process could be right for you, talk to your spouse. Not about dividing things… let us help with that in the mediation. All you need to do is agree to mediate and to agree to honestly exchange the information we ask you each to fill out on the questionnaire. That’s it. If you agree to that, we can help you agree on the rest.