Equitable Distribution, the division of all marital assets and debts, is a complicated three-step process that involves: (1) the identification and classification of all property as marital, separate, or divisible; (2) a valuation of all identified property; and (3) a distribution of all property in a manner determined by the court to be “equitable”. Suffice to say, this three-step process has many nuances and variables under North Carolina law.
Those seeking to understand Equitable Distribution can begin with the classification of marital property. In North Carolina, our courts apply the Marital Property Presumption in all Equitable Distribution cases which provides that “all property acquired during the marriage by either or both parties and owned by either or both parties on the date of separation is presumed to be marital property.” Therefore, any property (debts included) acquired between the parties’ date of marriage and their date of separation is presumed to be “marital” subject to division, regardless of how that property or debt is titled. Most property and debts acquired by a husband and wife during the marriage will fall under this Presumption and be deemed “marital property”.
Although the Marital Property Presumption tends to automatically classify all property and debts acquired during the marriage as marital, the Presumption can be rebutted. The spouse seeking to prove that property or debt acquired during the marriage is not marital has the burden to rebut the Presumption. For example, if a spouse wishes to have a vehicle acquired during the marriage deemed his or her “separate” property and therefore not subject to Equitable Distribution, he or she has the burden to show why that vehicle is not “marital” through one of several factors, such as a source of funds.
If you would like to speak with an attorney about the distribution of your marital estate, please contact us today to at (704) 810-1400 to schedule a consultation.